They may also charge you for property tax, utilities, and your portion of the insurance premium they pay for the space. IMPORTANT NOTE: Most commercial landlords will also charge you for “common area maintenance” (CAM), which is your portion of the cost for maintenance of the building, parking lot, etc. Be sure to ask about additional charges, insurance, and taxes over and above your commercial rent You’ll need to examine your revenue and determine that for yourself (see below).
The additional revenue generated by a prime retail location could make the extra cost of rent worth it, but it might not. x square feet ÷ 12 months = monthly rent) So for 2,000 square foot of retail space, you’re looking at a potential rent cost difference of $30,000 per year ($2,500/month) in this example, based solely on location. The “good spot” in a popular shopping area might be $25 per square foot, while a less swanky location could be $10 or $11. If you want a prime storefront with lots of exposure and traffic in a typical suburban area, you can expect to pay quite a bit more, even more than double, what it might cost you a few blocks away. For our purposes we are going to assume that the price per square foot is the yearly price unless stated otherwise. It’s common to use the yearly figure but some industries or realtors might standardize on a monthly figure. Be sure to clarify whether they’re quoting you the price per square foot PER YEAR, or per month. You should also consult with your local real estate brokers (as well as local business owners) to get a better idea of how much you might expect to pay. Of course, since the three most important things in real estate are (you guessed it) location, location, location, you will likely find widely varying rent figures depending on how good the location has been determined to be (and on your industry). Start by asking around your proposed area to get some idea of what it MIGHT cost you to do this. When you’re trying to estimate how much business rent might be in your area, it’s helpful to try to research the average rent for a small business in your area. Click here to learn more, or sign up for Womply Free! The average cost of rent or office space for a small business varies widely, even within cities Get smarter about your customers and their impact on your business with business intelligence software.
#SPACE FOR RENT FOR BUSINESS HOW TO#
You’ll also learn how to use unit economics calculations to determine if your business is profitable enough to start paying rent for commercial space. We’ll discuss the “average cost of rent for small business” in several metro areas, and we’ll show you why this isn’t the most helpful way of determining what you might expect to pay for rent.
If you’re a current business owner wondering if your rent is too high, please read our article: Local business owners: Are you paying too much in rent? If you’re considering renting business or office space for the first time, or perhaps the owner of a growing business wanting to move to a larger commercial space, this article is for you.