A budget is one of the most important tools to have when looking into leasing a property. The last thing you want to do is get your business in trouble by spending more money than you can afford to spend. This goes for any business expense, but rent payments are typically one of the bigger expenses for most businesses, especially businesses that are leasing large spaces like warehouses. How do you know what your budget should be? Is there an effective way to develop a hard-and-fast budget so that your business can be as successful and cost-effective as possible? Lucky for you, there are several ways to do this!
How Much Can You Spend?
The first step is to take a look at your monthly income and figure out a range for how much you can spend on a lease. How much are you spending per month currently? Are you expanding? Downsizing? Simply moving to a different space and not changing the size much or at all? If you’re expanding, try this trick. Take the square footage of your new place and divide it by the square footage of your current place to figure out what percentage you’re increasing by, and then increase your budget by that percentage as well. For example, if you currently have a 500-square-foot office and you’re increasing to a 750-square-foot office, that would be a 50% increase in space. If you’re paying $300 per month for your current office, try budgeting $450 (a 50% increase from $300) for your new office.
We’ve all run into situations where we start out with a budget and end up exceeding it- sometimes by a little and sometimes by a lot. Overspending is something you definitely want to avoid when making a budget! Avoid even looking at properties that are out of your budget. Otherwise, you might be tempted to stretch your budget just a little bit to get that perfect space…and a little could turn into a few hundred dollars before you even realize it. Be realistic and look at places you can afford, not places you could maybe or probably afford.
Remember The Additional Costs
When setting up a budget, try to keep in mind that you will have additional costs on top of the rent payment. You will most likely be required to pay a deposit. Depending on the lease, you’ll probably pay utilities. There may be property taxes involved as well. If you are moving offices, you’ll have some moving costs associated with getting into your new place (truck rental, moving services, boxes, etc). Factor these costs in when you’re forming your budget and keep in mind that the first month will be a little heavier financially than the following months. Make sure you’re prepared for the one-time costs involved with moving over to a new office, as well as the recurring costs that aren’t necessarily included in the rent.
Don’t Create a Fixed Amount Budget- Go With a Range
If you set your rent budget at exactly $500, no more, no less, you’re going to miss out on some places when you’re searching online. Instead, create a range of a few hundred dollars. A $200 range is usually sufficient. You don’t want to go with too cheap of a place, because it might be falling apart, but you also don’t want to expend all of your resources.
Is Your Budget Ready? Do You Need Help Finding a Place?
Contact us for help finding the perfect office space for lease or purchase! Schwarz Properties specializes in commercial and residential property management in Virginia, South Carolina, and North Carolina. We lead the market for industrial and warehouse spaces for lease and our portfolio also includes retail space, restaurant space, residential, office space, and many more. Please contact Schwarz Properties at 336-625-6076 or visit our website.