Signing a commercial lease can be a huge commitment for a new business. In addition to paying the rent, your business will be responsible for utility bills, maintenance charges, and other fees for at least a year.
Thankfully, there are less expensive alternatives to leasing commercial real estate. Here are five options to consider.
Rent Space in Another Business
It is much less expensive to rent space in another, more well-established business than to rent, furnish and buy equipment for your own salon, office or store. A further advantage is that some customers of the existing business are likely to become your customers, especially if you offer complementary services such as manicures in a hair salon.
Open a Pop-Up Store
The landlords of many stores that have been empty for several months are likely to consider renting you a store for a short period of time at a reduced rate. This is ideal if you are considering starting a retail business and want to test the market, either product-wise and/or location-wise. Use the sales results from your pop-up store to decide which products to sell on a long-term basis and where to locate your permanent store.
Collaborate with an Existing Business
There are many different ways of collaborating with another local business so that both businesses benefit. For example, if you are thinking of offering craft classes, you could teach them in a corner of a coffee shop in return for a fee or a percentage of your revenue. Some people attending your classes will stay for coffee or lunch while some of the coffee shop’s customers will sign up for your classes, creating a win-win situation for both businesses. Think creatively and brainstorm all of the possibilities before approaching other businesses and discussing your ideas.
Hire Community Facilities
Some community centers or halls can be hired inexpensively on an hourly or daily basis. This is a particularly good idea if you are setting up a business where people attend your training courses, workshops, seminars or exercise classes for a few hours or on certain days. You won’t need to pay rent for the times when you are not teaching and you can do your marketing and administration from your home office.
If you are reluctant to commit yourself to a commercial lease during your business’s start-up phase, investigate all of the possible locations for your business that don’t require you to sign a lease. Decide which location offers the most pleasant environment for yourself and your clients. Once your business has outgrown its initial location, it will be time to lease a larger space or look for another cost-effective alternative.
Mobilize Your Business
Mobile businesses are a major trend right now – and that doesn’t just mean using iPad POS and smartphones. With a truly mobile operation, this means there is no need to worry about showrooms, stockrooms, months of upfront rent, or full-time staff. While there are still costs associated with starting a mobile business, you can typically start a mobile store with $20,000 or less, which is a great alternative for businesses struggling to come up with the costs associated with launching a traditional brick and mortar business. Choosing to go mobile can drastically drop the startup cost and accelerate the profitability of your company.