You've decided to open a bistro enterprise and you've found a location that you simply love. Now it's time to sign the bistro rental agreement. Before you do that, let's talk for a moment.
Keeping in mind that 90% of all new independent restaurants fail within their first year of operation, your bistro rental agreement becomes more important than ever. I understand your excitement, but this agreement could be your first of many good decisions or bad decisions.
Understand, before you sign this bistro rental agreement, that your monthly rental charge should not exceed 5% of your monthly net sales. Let's say that your monthly net sales end up at ,000 per month. 5% of ,000 is ,000. The qoute for you is what happens if your monthly net sales are ,000 per month instead of ,000. If that were the case, your monthly bistro rental, with the same ,000 per month rental, has risen to 6.66%.
With ,000 per month in sales and your bistro rental costing 1.66% per month too much, you are wasting 8 per month. That may not seem like much to you today but keep this in mind. Your bistro will have nine different accounts which you must control the spending in order to survive. If you were to waste 8 in each of those nine accounts, you will waste ,482 each month.
Regardless of how fantastic you may think this location is, here are my recommendations.
Before you sign this agreement, you should negotiate with your landlord. Keep in mind, this landlord wants you to find success also. If you do, he will have a steady stream of income. If you do not, you will be gone and he will have to start all over.
With that in mind, you may be able to negotiate a lower rental number the first year, if you will allow the landlord to raise your rent the second year. This could be highly beneficial to you during that first indispensable year. Now, instead of signing a bistro rental agreement which will cost you ,000 per month right out of the gate, maybe you can pay ,500 per month the first year and then ,000 beginning the second year.
This recipe will allow you time to get your bistro running flat and give you a much better opportunity for success. Once you have signed your bistro rental agreement, you have diminutive recourse.
Landlords love a long term lease. Maybe you could negotiate a two year lease with a three year extension. This means that you will guarantee the rent for the first two years and if things work out for you, you can then extend your rental agreement for three more years at the same terms as your last two year.
If things have not worked out, you are free to leave after the introductory two years. This recipe gives you more flexibility which could be beneficial toward your restaurants success.
Your bistro rental agreement can be a mighty weapon which could lead you toward success.
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Your cafeteria Rental business agreement