5 Mistakes that Small Business Owners Make: Mistake #1

NorthStar Commercial Interiors specializes in helping small businesses build out and remodel their commercial spaces.  Through our years of experience, we have identified five common mistakes small business owners make when purchasing or leasing a new office space. This is the first in a 5 part series designed to help small business owners avoid these costly mistakes.

Mistake #1- Trying to DIY (Do It Yourself)

This is where you find and negotiate everything on your own, when buying or leasing a commercial space.  Before you go it alone, consider this recent DIY HORROR STORY and the LESSONS LEARNED:

A very successful business woman was looking to open a new location. Having been through the commercial leasing process previously, she felt confident that she was able to find and negotiate a lease on her own. 

She did her research, found a great location, contacted the landlord and negotiated the lease agreement all by herself.  The landlord had even agreed to provide a Tenant Improvement Allowance.  She felt good about the 'WIN' and signed the contract.

She had been through the tenant improvement processes before, SO, she felt she knew exactly how the build-out should go and didn’t consider the remodel until after the lease was signed.. 

The problems soon began:

After signing the lease, she began contacting General Contractors for quotes.  Blown away by the costs of two previous GC’s, she contacted NorthStar Commercial Interiors.  We discussed her requirements and shared several ideas that would lower her costs, speed her time to open, help with client/traffic flow, and reduce noise and heat.  Thrilled with our ideas, she was eager to get started.

Once the final Scope of Work was decided upon, the costs were still higher and the timelines still longer than either the tenant or landlord had anticipated.  After much back and forth between tenant and landlord, the landlord reneged on the part of the renovation he agreed to pay for and she was not able to open for business.  When the first rent payment came due the remodel hadn’t begun yet.  Since there was no revenue coming in to cover the rent, she defaulted on the lease.

The relationship quickly deteriorated and they were not able to come to an agreement on how to move forward. As a result, the property sat vacant for months, not generating revenue for either party, and they were headed towards litigation.

Lessons learned from this experience:

Hire a Commercial Realtor BEFORE making ANY decisions.  There are far too many variables at play that can have a direct impact on your success or failure.

Engage a General Contractor Right Away to define your scope of work, understand the costs and timeline. ALL of these can improve your negotiating strength.

Equipped with your Tenant Improvement costs AND construction timelines, your Realtor can negotiate the best possible terms and protect your interests.

Our goal at NorthStar Commercial Interiors is to ensure your project is completed on time and on budget.  Check back for more information on how to avoid the 5 Common Mistakes.