Business is booming for you and your company: you’ve got the manufacturing process locked-down, logistics are better than ever, and the client base keeps multiplying.
While that growth is amazing for your business, it also means that you may soon be in need of more warehouse space.
As demand increases for your product, so does your need for manufacturing to keep up. Having a larger warehouse area would give your production the scaling that it needs to do that.
However, there are several things to know before you go into a leasing agreement.
Here are the factors you should consider when you start to rent warehouse space.
1. What Are Your Needs?
Before you start looking around at local spaces and comparing the rates that they quote for your business, you need to take a hard look into what your needs are.
Don’t just look at what your needs are currently, but what they will look like as your business continues to expand.
Will there be a need for more machinery to keep up with demand?
How much space do you need in preparation for that machinery being added on down the line?
What amount of the warehouse space will be used for manufacturing and how much will be used for storage?
All valuable questions to have answered before you go out into the market and have real estate agents tell you what they think you’ll need. No one knows your business better than yourself, take pride in that and do your research.
Maybe you’re only looking for more warehouse space for one purpose. Perhaps the current warehouse space you have is perfect to continue manufacturing, you just need to rent space for storage as well as packaging and shipping.
If that’s the case, then you can focus more on whether or not the available rentals fit the bill for what you need. If not, it’s on to the next one; it’s as simple as that.
2. What Are You Looking for in a Lease?
Consider what you’re looking for in a lease negotiation prior to searching the marketplace for a space to rent.
Granted, most negotiations will take place verbally (and then be documented before signing), but it’s still advantageous to think about what your company needs.
There are several things to consider in the details of a lease such as the length of the lease, the rate they’ll give you, and what the increases are over the span of the rental agreement.
Also, you’ll want to ask about convenience features for you and your staff such as available parking, number of restrooms, and the tenant improvement (TI) they’re willing to make.
3. Visit Every Space In-Person
While this one may be a bit obvious, it’s important to visit the property for yourself in-person. Don’t sign the dotted line until you have.
The in-person visits and walkthroughs are an important time for negotiations and envisioning the TI that will need to take place. Plus, it never hurts to hear an agent’s pitch face-to-face.
Take this time to talk through other important factors such as zoning issues, manufacturing regulations, square footage, etc. Make sure you’ve seen every corner of the space before leaving the venue.
After your visit, be sure to keep notes on each location in one central hub, such as a word document or spreadsheet. These will be helpful in filtering out certain spots.
4. Consider the Common Leasing Terms in Your Area
It’s always nice to have something to compare to in business, and finding the right lease is no different.
During your search, you may find that there is a certain expectation with those companies that rent warehouse space similar to what you’re interested in.
Typically, the town and cities have a list of common leasing terms that come into play for most tenants. It’s helpful to know what that looks like and how you feel your company can take advantage of those expected leasing terms.
Whether it’s rental rates being determined by things such as the square footage, building restrictions, or even the age of the building itself.
Factoring all of that in can help you save even more on the warehouse space you’re most interested in.
5. Get the Terms in Writing
You already have enough to remember from the day-to-day operations of your business.
So while you have every intention of remembering the terms of your new warehouse rental space, the odds are that they’ll slip your mind.
Once you and your real estate agent have come to terms with negotiations, ask them to type up everything for you to review before signing the lease.
This serves 2 main purposes…
First off, documentation of the negotiations ensures that they will abide by everything they’ve listed out (as long as you hold up your end).
Secondly, it gives you a way to track important details (such as payment, rent increase, taxes, etc) in the future.
Rent Warehouse Space to Help Your Business Thrive
Now that you have a thorough understanding of the things you should consider when you go to rent warehouse space, it’s time to get things rolling.
Adding this space could be the difference your company’s manufacturing has been needing all along.
Looking to keep up with the times? Be sure to read this article for a guide on E-Warehousing and how your business can adjust its practices for the future.
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