Issue link: https://www.ascpskindeepdigital.com/i/493450
Create your free business website! www.ascpskincare.com 33 BROKER—FRIEND OR FOE? Don't let one agent show you space all over town, as this creates commission splitting. Estheticians may believe that the real estate agent or broker is working for them. Note, however, that the landlord pays the listing agent's commission, and an outside agent may even be sharing in that commission. Remember, often the higher the rental rate, the higher the agent's commission. Brokers and agents do a great job, but who are they doing the job for, and who is paying them to do it? In addition to these factors, you should also weigh the demographics when considering leasing a location. Just because you've found a new property with space for lease doesn't mean the demographics fit your ideal criteria. Consider the following when searching: Age. The average age of the people living in a particular area is important to many estheticians. Income. As income and the proportion of two-income households vary, so does the ability and desire to spend disposable income at your practice. When it comes to leasing commercial space, in general, you get what you pay for—and the more you pay, the better the location. But, if that were an absolute truth, all an esthetician would have to do is find the most expensive location and set up shop. But it's not an absolute truth. Estheticians frequently sign long-term lease agreements and pay rental rates that could have been negotiated much lower. It's critically important for estheticians to crunch the rental numbers against the projected sales volumes for their businesses. We remember one entrepreneur couple we were coaching who sent us their business plan, which clearly showed their anticipated sales volume. We showed the couple that even if they achieved 100 percent of their projected sales volume, they would be spending approximately 35 percent of their gross revenue just to pay the rent each month. This isn't a workable formula; that percentage of gross sales to gross rent is far too high for any business. Consider all your options. A good practice in a poor location may never reach its full potential. In leasing, commercial tenants don't get what they deserve—they get what they negotiate. Dale Willerton and Jeff Grandfield—The Lease Coach—are commercial lease consultants who work exclusively for tenants. They are co-authors of Negotiating Commercial Leases & Renewals For Dummies (Wiley, 2013). Got a leasing question? Need help with your new lease or renewal? Or if you'd like a complimentary copy of their CD, Leasing Do's & Don'ts for Commercial Tenants, call 800-738-9202, email dalewillerton@theleasecoach.com, or visit www.theleasecoach.com. A good practice in a poor location may never reach its full potential. 8