The Landlord You Know....
The term Landlord (land and lord) is an interesting concept, particularly for small businesses. It has always been an adversarial arrangement between tenants and landlords of any size. But, lease payments are one of the biggest expenses for small companies and a leading reason for their failure / bankruptcy. By their very nature and desires, these two are at odds. Small businesses need flexibility as they grow their business. Landlords want less effort – smallest number of tenants possible for large footprints and longer terms, and $$$ – inflexible. Many small businesses creating jobs is good for the economy – but too much work for most landlords. I’ve seen it time and again with different owners – most money / least work. Small businesses start out with most work / least money. Landlords only intended beneficiary is themselves. The best option here for a small business is having a landlord whose success is determined by the tenants’ success. Small businesses and owners must be sustainability focused with their products and brands to succeed and preferably be located in a similarly focused building that portrays their brand values.
What small businesses want:
Flexibility in lease terms that tie to their actual financial condition – with further flexibility to adapt to a fast changing small business world that differs from a large real estate world in ability to pivot.
Small companies need to lease only what they need immediately, with options for growth in terms of more space in the future as revenues grow.
Access to as much physical building functionality as possible.
Consistent lease rates that can be budgeted vs. variable from month to month. It is just plain more work to process varying amounts.
Shared utilities costs including internet where possible.
Plenty of available parking during business hours.
Shared services with other tenants to avoid direct costs for items that are used infrequently like conference rooms.
Interaction with other tenant companies nearby to create shared expertise and collaboration.
Connections to local government representation.
Inclusion of building premises in local area development plans.
Connections to local education and government agency resources.
Use of building function as a catalyst to promote collaboration across companies.
Landlord that is active and willing to listen and address concerns as encountered.
Equal priority for all tenant companies.
Willingness to consider lease downsizing when needed.
Marketing is an important and necessary resource for businesses particularly at early stages. Their biggest challenge is with ‘how’… web sites, digital, video, e-commerce, social media, etc. At CI Works, we have focused on developing a network of available resources with specific areas of expertise in these disciplines that have a desire to work with other small businesses to achieve mutual success.
What small businesses don’t want:
Landlord that must be the center of attention and only decision maker.
History of tenant eviction when it facilitates self interests – because you could be next … and expensive to fight in court.
Environment where one superior tenant exists – that dominates all decisions and plans of landlord.
Potential tenant use of hazardous materials on premises that has been previously allowed that represents risk to both your health and your brand.
Antiseptic segregated tenant environments with single use utilities that are expensive.
No interaction with other proximate and similar businesses in the same building.
Landlord owner who is MIA – in terms of tenant interaction.
Located in an area that is somewhat run down.
An area that is not on a busy traffic path like a rail trail.
Owner that has little to no engagement in area development plans that can positively impact tenant businesses.
Landlord representatives that are only landlord centered with zero personality and engagement.
Location that is currently parking limited with no future plans to address. Limited parking means inconvenience and limited use and people won’t go there.
Building that has no environmental awareness in any plans and lease considerations.
CI Works has found a real estate environment that is not always conducive to the needs of small businesses, particularly as they are coming to market with products. After speaking with thousands of small businesses, we have compiled the lists above. We have developed a real estate environment that is conducive to small businesses’ success and collaboration – supporting businesses in expanding knowledge, reaching new markets, gaining experience, networking, and developing e-commerce capabilities. At the very least, we hope you will utilize the checklists above when meeting with landlords about leasing space for your business and consider what CI Works may be able to offer you.