When business formation includes budgeting for retail space

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When business formation includes budgeting for retail space

On Behalf of | Aug 8, 2018 | Business Formation & Planning

Money is often an important part of the planning process for any Illinois entrepreneur. This often makes budgeting a crucial part of any business formation efforts. When a new venture includes finding a retail space, it may help to make sure that everything is considered when creating a budget for it.

Before moving forward, it will more than likely be necessary to figure out how much of the monthly budget can be set aside for rental payments. This will require some research in order to determine the high and low ends of the spectrum in the general locale in which the business will operate. Once those two numbers are obtained, it may be possible to determine an average monthly base rent.

However, that is not the only number that requires consideration. Most property owners will require a commercial tenant to carry insurance, contribute to common area maintenance costs and pay a portion of the property taxes. If a new business owner fails to budget for these additional costs, which can easily add at least another $200 per month on top of the base rent, it could financially doom a venture before it even has a chance to succeed.

Determining what kind of money will be needed in order to afford a particular retail space can be challenging. Many Illinois entrepreneurs consider this part of the business formation process to be crucial since it is one area in which the actual costs are largely unknown in the beginning. Finding a space may end up being the easier part of the process. No prospective commercial tenant should simply sign the lease agreement provided by the property owner without first reviewing it carefully and negotiating any terms necessary in order to obtain the best deal possible.

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