Secret Dollars On Offer to Start Your Business

Secret Dollars On Offer to Start Your Business

Thought you could never afford to

open your own business in a

shopping centre? …. Think again

 

The set up costs involved in opening a store in a shopping centre are huge, the fit out alone is

enough to put the average dreamer into cardiac arrest. 100k, 200k even more to fit out your store,

and that is before you look at stock or equipment. So you can see that most people run for the hills

because a return on investment can take years to achieve, especially with the online competition

that now faces many retail outlets.

 

I am not an expert in the field of retail shop fit outs even though I have owned a store in a shopping

centre, but there are some hidden incentives available for those who are game to explore the

possibilities.

 

SHOP FIT OUT CONTRIBUTIONS – Most major shopping centres will pay you money towards fitting

out your store on the provision that you sign a 5 year lease. When you make initial enquiries the fit

out contribution is often low, let’s say $30k this is the starting point of your negotiation. “Whatever

you do, do not take the first offer” especially if the shop has been vacant for quite some time.

(if you are not a good negotiator get someone to do this on your behalf) There is usually a lot of offers

and counter offers along the way.

 

Do your maths and work out what your fit out is actually going to cost then add another 30k on top

of that figure. You may be very surprised at what the final fit out contribution from the shopping

centre will be. In some circumstances you may be able to negotiate a contribution of $100 – 300k

depending on the nature of the business and how desperate the centre is to have you in there.

LEASES – Generally you will be made to sign a 5 year lease to open up your store and receive the fit

out contribution. Leases can be very confusing and should always be examined by a professional

before signing. Look for a couple of things in the lease. Percentage Rent, Exit Options and be aware

what happens if you close the store if your business is not performing and you close.

 

The fit out contributions in most circumstances do not have to be paid back even if you sell the

business within your lease period providing the new owner continues the lease for the remainder

of the lease. The big benefit of this is you can start and if a business very easily and make a generous

profit from the sale of the business and a good income from sales along the way.

In conclusion opening a store in a shopping centre can be a lot cheaper than you think but can also

be very tricky. Make sure your business plan is solid. Make sure that your product is wanted and that

there is a need for what your selling, and most importantly if you have any doubts always seek advice

from industry professionals.

 

Written by

Jonathon Matthews

 

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