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    7 Replies Latest reply on Sep 16, 2008 10:24 PM by Troikia

    Leasing salon/retail space

    genie_m_ross Wayfarer

      So I've found my dream space for the salon that I've wanted to open but I've never leased commercial real estate before. I have an appointment to view the property and I'm terrified because I'm going into this with NO knowledge. The space is 3000 sq ft and it's $21/sq ft with a 5 yr minimum lease. I have NO idea what this means to me per month. Is it $21/sq ft/mo? or /year or /term of lease? Needless to say these are DRAMATIC differences. Approximately $63,000/mo for the first option, $5,000 for the second option and $1000 for the third. Does anybody know anything about leasing commercial real estate? HELP!
        • Re: Leasing salon/retail space
          LUCKIEST Guide
          Leasing salon/retail space, Welcome

          I can NOT help you but have a GREAT Suggestion.

          Go to SCORE on line and look for Counselors with Real Estate experience.

          there are many. Pick 5 (or more) Ask them all the same question. They MUST answer you
          and you will get some great answers.

          Good luck, LUCKIEST
          1 of 1 people found this helpful
          • Re: Leasing salon/retail space
            Troikia Wayfarer
            Hey there. Its pretty simple. $21 per sq ft multiplied by the space which is 3000sq ft equals $63,000, which would be your rent for one year. Divided that by 12 months of the year which is $5250 a month. Thats you rent per month. I dont know about your area, but my boutique/salon is $27 per sq feet. So thats a good number for you, BUT, it depends on the location of your store and business. Have you considered getting a smaller space.
            I just turned 23 and have learn very much about running my own business, and cutting cost is very imp. So chose wisely. And I suggestget some help on calculating rent and sq feet and things like that, so that you dont get taken for a ride in the future.
            1 of 1 people found this helpful
            • Re: Leasing salon/retail space
              Troikia Wayfarer
              By the way from your post, I understand that at $5250 a month or $63,000 a year, you still "have" to a sign a minimum of a 5 year lease with the company. Which means if your business, for some reason, does not good or you find a better location and want to move, you are stuck for 5 years. I would suggest find out what is your fee incase you have to break your lease in the middle. And in addition, ask them if and how much the rent increases after 5 years. It can be anywhere between 3% to 5%.

              Good Luck.
              1 of 1 people found this helpful
                • Re: Leasing salon/retail space
                  genie_m_ross Wayfarer
                  Thanks for the information. I have a side question for you: You said that you're about to be 23 and we're 21 and 23 ourselves. Just curious what kind of road bumps you've hit due to your age. I'd really like to get as much info about you as possible, could you email us? genie_m_ross at yahoo
                    • Re: Leasing salon/retail space
                      DomainDiva Ranger
                      One more thing...you mention being 'terrified'. You need to loose that mindset really quickly. It's a business lease...not a world war. You can do this...you have come this far...just keep going.
                      • Re: Leasing salon/retail space
                        Troikia Wayfarer
                        Hey. Thank You for being interested in my experience. I am 23 now took over a family members boutique/salon last year when I was 22. I have always wanted to do something of my own and when this opportunity came along I took it. I had a little bit of money saved up and took some help from my dad and came up with a little bit of money and gave it to the family member as some payment upfront for the business. The deal was that i would run the place and pay her installments every month and eventually pay her off.

                        I love the place, BUT, i am not a stylist or a beautician, so it is important that if you and your partner are actually going to be the stylists or beautician only then will the business work. Because if one of my staff decides to leave an hr early I lose business. Its like opening a restaurant and you dont know how to cook.

                        The boutique is ok because thats my expertise, however, it does not represent who I am or what I wear. Which can pose a problem. Because u arent always as passionate. Plus for me because I am slowly paying off the business, and because of the lease situation the place still runs under my family members name which bothers me sometimes because I have the power to run it the way i want to, but then sometimes I dont. Its complicated when you get into business with family. The advantage however is that they cut you slack when needed.

                        At the moment I am most frustrated about running a place that already has a very confusing and unorganized infrastructure in place.

                        Hence, as of Jan 2009 I am venturing into two new business, which when I start I will write more about. The goal is to start on a blank slate, which luckily you guys are, and built it from base up. This way I am incharge and sell what I understand better and love to wear myself.

                        This is just an overview about my situation. But I must add that running the current business that I am running taught me things that I would have never learnt in a class room. For example, juggling employees, how to handle bills when money is short, who to pay first and determining which bills can wait, developing customer rapport, calculating and paying sales tax, store insurances, understanding what everything in the lease meant, licenses, banking, accounting, inventory and soo much more.

                        Because of these things today I am more confident as I hope to venture into two businesses next year. Again, with very little money, because I dint make any in the last yr, plus already lost what i paid before. The best felling is that I will be starting on a clean slate.

                        If you have further specific questions just shoot it my way and I will answer them. Again, I am also new and young but I have about 8 years of experience in gas station business, retail store, doctors office,dance studio, salon. Lets just say I kept involving my self in many many things and hung around family and assited them in all of the areas mentioned above.

                        Its finally time to do something for myself.

                        Thanks and Best of Luck,
                        Troikia
                    • Re: Leasing salon/retail space
                      Troikia Wayfarer
                      I meant to ask you earlier what happened with the place you mentioned about? Did the lease work out? Also if you dnt mind me asking who are you going into business with and what type of salon do you have in mind ?

                      Thanks,
                      Troikia