Leasing First Storefront! If You Have One, Advice Please?

Business By JCE62108 Updated 18 Dec 2009 , 7:32pm by tincanbaby

JCE62108 Posted 18 Dec 2009 , 12:33am
post #1 of 9

Well, my little hobby is getting a bit more than I can handle at home. My husband and I are thinking about going legit and leasing a storefront.

We've looked at a few places, and I had a few questions....

-When you were looking for a storefront, what did you feel was important to look for?

-What questions did you ask the realtor or owner?

-Did you specifically look for retail space that had previously been remodeled for food use? (previously a restaurant, bakery, etc)

-I know its a bad economy and a lot of businesses are going under, but do you think its bad news to be looking at a retail space in a shopping center where most of the spaces are empty?

-What about moving into a retail space where a cake bakery just moved out of?

-What about a stand alone building? Possibly less business?

-What size and price range did you look for when you first started?

-How many orders did you get monthly when you first started?

-How long did it take before you made a reasonable profit?

-Do you think starting out with a rent of $900/mo in a building that needs about $2000 in remodeling would be a bad move? The building is 900SF and I really love it. Its in a pretty good location, next to the interstate on a fairly busy road. It has a really small sign facing the main road though. Only thing I dont love. I think I could talk them down to $800 or maybe a little less. Thoughts?

-Can you tell me a little about what you did when you first started? Any tips for me? Im a little nervous and this is a huge step for our family. We are going to try to make a deal in the next 2-4 months, hopefully. Id love some advice. Anything you want to add would be wonderful. Thanks!

8 replies
indydebi Posted 18 Dec 2009 , 1:19am
post #2 of 9

My favorite subject! Simply because I knew nothing when I started the process and learned SO MUCH by the time it was over! dunce.gif

- The rent for my space is $1500 for 1150 sq ft. This figure includes the common use fees (outside lighting, snow removal, lot maintenance, etc).

-My build out cost over $25K. So your $2000 sounds wonderful! I started with "an empty box" and had to add all the plumbing (and trenching thru concrete is expensive!), wiring upgrade, walls, etc.

- Location is definitely key. If you plan to depend on walk-in traffic, then visibility and heavy foot traffic will be a top concern. Cheap in an empty strip mall means nothing if nobody shops at that mall. HOwever, it can work in your favor ... they would be VERY willing to negotiate to get someone in there. When someone was looking at the empty space next to mine, I pulled him aside and let him know the space had been empty for over a year and I knew for a fact that he was the first inquiry they'd had in the space, so he had some good negotiating power. (And it worked VERY well for him, too!)

- Getting a place that has or previously had a kitchen will save you a lot of money. As mentioned above, trenching thru concrete for the water drains, etc., is vey expensive. Also odds are good that the wiring has been upgraded to accomodate your equipment.

- You can negotiate anything in your offer. If they are asking $10/sq ft, then offer $8/sq ft. I also had the landlord pay for the floor treatment ("minimal treatment but must be HD approved") and for the wiring upgrade. They agreed up to $7500. Word this carefully. I screwed up and it turned out I had to pay the $7500 FIRST and then they'd reimburse me. Something that wasn't really in my budget! icon_cry.gif

- You usually get 3 months free rent for remodeling time. A business just opened in my strip mall and the guy got 6 months free rent and the clock didn't start until the building permits were issued. This can save you a fortune ..... there's a lot of prep work that needed done before we could get permits. We had to have architect approved drawings (which means no, I couldn't sketch it out on a piece of paper. The drawings had to be real specs, approved by an architect and then sent to the state for approval). This took 6 weeks of my 3 months! icon_eek.gif

- If you hire a contractor, be there every day and be a PITA! My 10-12 day job took over 8 weeks. icon_eek.gif Part of it was holidays and part was that it took 10 days to get permits issued (it was right after the election and the entire city bldg was busy cleaning out their desks!)

- Know ahead of time the city requirements for hoods and grease traps. As a caterer, I needed a hood that went over my 6-burner stove, my ovens and my deep fryer. 8 linear feet at $1000/ft = $8000. icon_eek.gif The grease trap was a "oops! we forgot to put that in the specs!" said the kitchen designer, so another $1000 I hadn't planned on spending.

- The little things. OMG the little things! Dumpsters, fire systems and extinguishers, trash cans, NSF food storage containers, larger baking trays to fit your new comm'l oven, paper products (trash bags, towels for the bathroom and the hand washing sink, wax paper, parchment, paper towels). All of the soaps and cleaners. I spent $700 on soaps. They lasted over 6 months ... some longer .... but laying out $700 sucked! And of course that stupid mop bucket that cost over fifty bucks! (yeah, that STILL pi$$es me off! icon_mad.gificon_lol.gif )

I'm sure I'll think of other things and if/when I do, I'll be back.

JCE62108 Posted 18 Dec 2009 , 1:59am
post #3 of 9

--------------------------------------------------------------------------------
My favorite subject! Simply because I knew nothing when I started the process and learned SO MUCH by the time it was over!
---->I figured! That's why I thought it would be valuable to ask. I dont want to go into this blind.

-My build out cost over $25K. So your $2000 sounds wonderful! I started with "an empty box" and had to add all the plumbing (and trenching thru concrete is expensive!), wiring upgrade, walls, etc.
----->Really that is just for some patching of the drywall, paint, and flooring. Im sure we will find a lot more we want to do. But to get started I think that will do us.

- Location is definitely key. If you plan to depend on walk-in traffic, then visibility and heavy foot traffic will be a top concern. Cheap in an empty strip mall means nothing if nobody shops at that mall. HOwever, it can work in your favor ... they would be VERY willing to negotiate to get someone in there. When someone was looking at the empty space next to mine, I pulled him aside and let him know the space had been empty for over a year and I knew for a fact that he was the first inquiry they'd had in the space, so he had some good negotiating power. (And it worked VERY well for him, too!)
------->the place I like has one bar directly next to the space Im interested in. Everything else is empty though. I think there is like, maybe 4-5 spaces total in the center. The one Im looking at hasnt been rented in 10 months. The realtor said the owner didnt really care, and wasnt in a hurry to rent it. However next week they are going to gut the building (it had really cruddy offices built in it.) and strip the floors down to the concrete. I guess, in hopes it will make it look better to sell. I dont know what to think when he says the owner doesnt really care if it rents or not. Selling tactic or could he be serious? Maybe he is just trying to get the idea across that she wont lower it because the owner doesnt really care about renting it. I dont know. :/

- Getting a place that has or previously had a kitchen will save you a lot of money. As mentioned above, trenching thru concrete for the water drains, etc., is vey expensive. Also odds are good that the wiring has been upgraded to accomodate your equipment.
---->We saw a place today in which a custom cake bakery JUST moved out. There was NOTHING that I could see in there that was remodeled for the purpose, unless there was wiring or plumbing I couldnt see. There was no drains, no mop sink...nothing I could see. Just a shell of a building. I thought that was weird, but I guess they had to pass their inspections, so whatever.

- You can negotiate anything in your offer. If they are asking $10/sq ft, then offer $8/sq ft. I also had the landlord pay for the floor treatment ("minimal treatment but must be HD approved") and for the wiring upgrade.
---------> What did you use for your flooring? Hubby and I have been debating. He wants tile, but I really dont. Too slippery. The retail bakery I worked in for awhile has some sort of painted or sprayed on flooring. Reminded me of my hubby's truck bed liner. He said maybe it was like garage flooring paint or something like that? I would love to have that kind of flooring. What is it, do you know?

- You usually get 3 months free rent for remodeling time. A business just opened in my strip mall and the guy got 6 months free rent and the clock didn't start until the building permits were issued.
-----> I really dont want to do more than a year lease, and everyone Ive asked says they wont give more than a month grace for a 1 year lease. Maybe come negotiating time we could squeeze a little more out of them.


- Know ahead of time the city requirements for hoods and grease traps. As a caterer, I needed a hood that went over my 6-burner stove, my ovens and my deep fryer.
---->I dont know that I would need all that. Honestly, Everything I need I have in my home. I think I could get by with an oven, stove, some counterspace and my cake tools....at least initially. I just want to go legit and stop doing this out of my home, which technically in my state isnt legal to begin with. Like I said, the lady that left the other place, I couldnt see any indication of any of those things...unless that is something unground? Honestly Im not that familiar with that stuff. I dont think I would need it for just cakes though....

- The little things. OMG the little things! Dumpsters, fire systems and extinguishers, trash cans, NSF food storage containers, larger baking trays to fit your new comm'l oven, paper products (trash bags, towels for the bathroom and the hand washing sink, wax paper, parchment, paper towels). All of the soaps and cleaners. I spent $700 on soaps. They lasted over 6 months ... some longer .... but laying out $700 sucked! And of course that stupid mop bucket that cost over fifty bucks! (yeah, that STILL pi$$es me off! )

----> Yeah the little things....that scares me. All those little things you never knew you needed. Well if I make enough money to cover it, so be it. but initially Im wondering why I cant just work in the building the same way I worked in my home. Only difference is having a place in the front of the store for consultations separate from the kitchen. Although this thinking could be naive...if my operation is this small, I probably couldnt afford the rent....but at the same time, if I see myself getting alot of business right away, I could afford to buy more equiptment to meet my needs. Right? Maybe?

Thank you again, Debi. Your response was most helpful and Im going to be sharing everyone's advice with my hubby as well. Thank you!

indydebi Posted 18 Dec 2009 , 2:37am
post #4 of 9

The location is sending up red flags to me. A totally empty strip mall except for a bar? Owner who doesnt' care? Doesnt' sound like the type of neighborhood I'd want to shop in for a cake.

We just had the concrete floor sealed. It smells to high heaven when it's in progress (the restaurant next door complained, but there's nothing that could be done). But my HD inspector said, "oh this flooring is the best way to go!" I said it was strictly economics ... it was the cheapest way!

Why do you not want more than a year's lease? I would think you'd want to lock in a low rent for 2-3 years at least? Every place I looked at had a 3 year minimum.

You're right....you won't need all of the equipment that I do. But you can't compare what you have at home with what you need in a shop. (You left off of your list the 3-compartment sink, the hand washing sink, a refrigerator and a freezer ... unless you mean that you already have those in your home and will be moving them.) Have you checked with your local HD to find out what they require?

Quote:
Quote:

but initially Im wondering why I cant just work in the building the same way I worked in my home. Only difference is having a place in the front of the store for consultations separate from the kitchen.


No, the difference is you will have a HD inspected and licensed kitchen and the requirements for that is much different from what you have at home. When you get the list of requirements from the HD, then make a list of what you need to buy, you'll have a better idea of what you can or can't afford. Craigs List is a GREAT place to buy equipment!

giggysmack Posted 18 Dec 2009 , 2:55am
post #5 of 9

great topic and great advice I'd love to hear more

JCE62108 Posted 18 Dec 2009 , 2:52pm
post #6 of 9

The location is sending up red flags to me. A totally empty strip mall except for a bar? Owner who doesnt' care? Doesnt' sound like the type of neighborhood I'd want to shop in for a cake.
-----> Actually, its in a good area. Nice homes surrounding, clean neighborhoods. The building itself looks nice. A lot of the other ones we saw looked a little run down. Its off of a main road with high traffic, about 1 mile from the interstate, which I like because a lot of my customers tend to contact me from the surrounding cities and the interstate is the way to get everywhere. So I feel like it would be convenient for them. I got a good feel from the location. Even though there is a bar next door, there isnt too much noise and it looks nice from the outside. We are still looking, but this is the one I like the most so far. But the fact that nothing else is rented out bothered me a bit, too. But then again, its a bad economy and a lot of businesses are going under. I am finding that a lot of strip malls are looking a little empty lately.

We just had the concrete floor sealed. It smells to high heaven when it's in progress (the restaurant next door complained, but there's nothing that could be done). But my HD inspector said, "oh this flooring is the best way to go!" I said it was strictly economics ... it was the cheapest way!
---------> Ok, what do you seal it with? What does it look like? Is it like clear or something? Did you do it yourself or hire someone? I figure there has to be a name for this product thats used to seal it. Its probably not like garage flooring stuff, is it? Does it wear off?

Why do you not want more than a year's lease? I would think you'd want to lock in a low rent for 2-3 years at least? Every place I looked at had a 3 year minimum.
-------->Well, because of the risk. Im just getting started and Im nervous. I dont want to commit myself to a 3 year lease. The realtor showing us this space I told you about said that we could possibly include options to renew during the negotiation process. That would be good because then if we want to renew after a year, we can and still will have a predetermined rate locked in. If the owner goes for that, I think that is the best way for us. Not so much risk.

You're right....you won't need all of the equipment that I do. But you can't compare what you have at home with what you need in a shop. (You left off of your list the 3-compartment sink, the hand washing sink, a refrigerator and a freezer ... unless you mean that you already have those in your home and will be moving them.) Have you checked with your local HD to find out what they require?
----->I have the minimum construction requirements. I do need a hand wash sink, and a three compartment sink. Food prep sink is optional. I didnt really list out all my start up costs, just the remodeling is what I was talking about before. I dont really know for sure what my costs for appliances and furniture will be because I plan on getting it all used. I will need those sinks, a fridge, an oven, some countertops, shelves, furniture for the front, a desk (we might use ours from home), etc. As far as utensils and countertops and stuff, it just says it must be nonabsorbent. I wouldnt really consider plastic to be nonabsorbent, and not wood either. So I guess just stainless steal? Im not sure about plastic. I know that if you spill dye on a plastic surface, it could soak in and stain. That doesnt mean nonabsorbent to me. What do you think? The checklist they gave me doesnt go over everything, but most things.


Quote:
but initially Im wondering why I cant just work in the building the same way I worked in my home. Only difference is having a place in the front of the store for consultations separate from the kitchen.
No, the difference is you will have a HD inspected and licensed kitchen and the requirements for that is much different from what you have at home. When you get the list of requirements from the HD, then make a list of what you need to buy, you'll have a better idea of what you can or can't afford. Craigs List is a GREAT place to buy equipment!

---->Should I be looking for another list besides the minimum construction standards that might help me? Maybe Ill attach what I have so you can see. Its for FL.

Mike1394 Posted 18 Dec 2009 , 3:55pm
post #7 of 9

Everything you need will be spelled out in the '09 food code.

Mike

indydebi Posted 18 Dec 2009 , 5:29pm
post #8 of 9

I've no idea what the sealant is called. I hired a kitchen designer (who didn't charge me a dime for her service because I bought all of the equipment from her) and used a contractor that she recommended, who did almost nothing but commercial grade kitchen work. They knew what the HD required and what they would approve.

tincanbaby Posted 18 Dec 2009 , 7:32pm
post #9 of 9

Contact your local zoning office too. They have a different set of requirements to meet along with the State of FL. For walls/ flooring they prefer tile with drain in floor so it can be washed down. Stainless steel is best for most of the kitchen. Equipment must be Commercial equipment. Seperate restroom also seperate wash/mop room and storage rooms for dry storage. Fl has all kinds of restrictions. It gets expensive.It also has to be approved by the state and HD and local codes.
I have Fla. do's and don't's. It is a very long list if one does it correctly. If you're ready to try it out on a legit level... have you thought about renting a comissary kitchen first. You will pay a little bit per month, but long term you are not tied into anything. Great way to try before going into debt over something you're not sure of.

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