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Start-up lease guide: essential tips for small businesses

This guide has been developed to support new and growing enterprises in Salford by providing clear, practical guidance on securing commercial property. From identifying suitable locations to understanding legal and financial considerations, it aims to equip local businesses with the knowledge needed to make informed decisions and build strong foundations for long-term growth.

Don’t lease more than you need

When starting out, it’s tempting to secure a large space with future growth in mind. However, leasing more space than you currently need can lead to unnecessary costs. Start with a manageable area and ensure the lease allows for expansion if needed.

Choose the right location

Location is critical for customer access, staff convenience, and business visibility. Ensure the property has the correct planning permissions for your intended use. Check transport links, parking availability, and local amenities.

Understand your lease terms

Lease agreements can be complex. Always consult a commercial property solicitor to review terms. Look out for rent review clauses, service charges, break clauses, and repair obligations. These can significantly impact your financial commitments.

Know your responsibilities

Tenants are often responsible for repairs and maintenance. Request a Schedule of Condition to document the property’s state at the start of the lease. This can protect you from being liable for pre-existing issues.

Inspect the property thoroughly

Before signing, have the property professionally surveyed. Check for structural issues, fire safety compliance, broadband availability, and hygiene standards. This ensures the space meets your operational needs.

Budget for upfront and ongoing costs

Beyond rent, consider legal fees, deposits, insurance, fit-out costs, and business rates. Stamp Duty Land Tax (SDLT) and Land Registry fees may also apply. Ensure you understand all financial obligations before committing.

Consider energy costs

Energy costs can vary significantly between properties. Check the Energy Performance Certificate (EPC), insulation quality, and typical utility costs. Assess heating systems, lighting efficiency, and potential savings from energy-efficient upgrades.

Consider sustainability

If staff or customers use electric vehicles, check whether EV charging points are available or can be installed, including any costs or permissions needed. Properties may also support renewable technologies like solar panels or heat pumps. Always discuss feasibility, structural suitability, and who benefits from energy savings with the landlord.

Protect yourself legally

Avoid unlimited personal guarantees. Negotiate for capped liabilities or rent deposits instead. This limits your personal exposure if the business faces financial difficulties.

Plan your exit strategy

Understand the lease’s assignment and subletting terms. These allow you to transfer or rent out the space if your needs change. Ensure the lease permits these options and clarify any conditions with your solicitor.

Understand break clauses

Break clauses offer flexibility to end the lease early. Ensure the conditions are clear and achievable. Common requirements include notice periods, rent payments, and property condition. Negotiate minimal conditions to avoid complications.

Prepare for lease end

As the lease nears its end, discuss dilapidations with the landlord. You may need to repair or restore the property. Plan ahead to avoid unexpected costs and disputes. Document any alterations and agree on reinstatement terms in writing.

Quick checklist for start-up tenants

  • Location suits business and staff
  • Suitable property identified
  • Lease term and break clause agreed
  • All costs (rent, service charge, fit-out, etc.) understood
  • Professional and legal advice obtained
  • Flexibility for growth or exit in place

Final notes

Acquiring the right premises is a critical step in establishing a successful business. By understanding your property needs, negotiating fair terms, and seeking professional advice, you can secure a space that supports your long-term goals.

Need help?

We recommend speaking to:

  • A commercial property solicitor
  • A commercial agent to help identify a suitable property in a suitable location
  • The Business Growth Hub
  • A chartered commercial property surveyor (for heads of terms, rent negotiation or building condition reports)
  • A chartered building surveyor (for advice on the property condition)
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