Ready to Open in 2019: The Top 6 Things to Do Before Signing a Lease
Time. There’s not a lot of it when you are getting ready to open a new business. But there is even less once you have signed your lease. If you’re aiming to open a restaurant in 2019 you must be as prepared as you can be. There are a number of things that you can do ASAP that will be harder to deal with once you’ve signed your lease. I spoke to some of the top hospitality professionals who shared their secrets for essential prep before opening. Here’s a list of the 6 things you should address before signing your lease:
1. Secure your Capital:
Tara Berman of Tara Paige Group, a financial advisory firm, always advises her clients to have more than enough cash in the bank. “The money in the bank should not only support the construction phase and soft costs but you must allow for losses during the first few months, your working capital allowance. The working capital allowance is the key to ensure you have enough funds to go forward.” This is the most common reason for new businesses to close: undercapitalization. So ensuring you have ample funding is key to your future success.
2. Be Diligent:
Restaurateurs must conduct due diligence on their potential location before they sign a lease. When building a new restaurant or new building Suzan Wines of I-Beam Design offers her clients a timeline of due diligence requirements that includes a number of line items that must be completed before signing a lease. Their company has designed spaces for restaurants as varied as Chili’s and Employee’s Only and advises the same no matter the concept. Her list includes zoning, government feasibility, and even conducting a survey to ensure that this location will be viable. This helps you be clear about what spaces will work and which ones won’t make the cut.
If you are taking over an existing restaurant space there is one thing that will always be included: the pests. Joel Grassi of BHB Pest Elimination encourages clients to do their research about the prior tenant. “I always ask the new client if they know what was there at that location before them. They should check that out, and it’s possible to go the DOH website and see what pest violations the previous owners were dealing with.” This ensures that your pest control company can address this issue before construction begins so you don’t have unwanted pests in your new operation.
3. Anticipate Your Energy and Capacity Needs:
You concept will guide the design of your operation and the flow of the service. But your concept and menu will also have very specific needs that must be met in order to operate properly. Kash Singh of Aerial Design and Build always cautions his clients to understand the basics of what the concept may require in terms of power and capacity. Will there be enough electric and gas power to fuel your equipment? And if you are taking over an existing restaurant space, is the grease trap big enough to handle the demands of your menu and kitchen? These are questions that only a professional can answer so Singh recommends that “you bring a contractor/architect/engineer to evaluate your top 3 location choices” so you can ensure that you will be able to fully execute your vision.
4. Address the Community Board:
Something that happens more often than not is that a client signs the lease on a location only to discover that the community board has limits on how you operate your business. Elke Hoffman, of Elke A Hofmann Law, knows that the community board can make or break your concept. “In general, if the business involves a liquor license, we would hope that clients would have already appeared before the applicable community board before signing a lease, so that there are no surprises,” she shares. “Community board opposition can delay – or prevent – the issuance of a license, or impose limitations on the business, such as hours of operation.” Hoffman recommends appearing at a community board meeting in order to understand the requirements of the board of the neighborhood you seek to become a part of. This will lessen any surprises while also helping you to build a reputation in your new community.
5. Reduce Future Risk:
When it comes to insurance, most operators think they can put this off until they’re in their new space. But that is usually too late. Items like determining which parties are responsible for the property, ADA compliance and pollution are all points to discuss when in the process of negotiating your lease. “It’s about minimizing risk,” says Derek Sherman of E.B. Cohen. “In many cases,” he says, “the risk and insurance related items are neglected and addressed right before lease signing or after, which can put the client in an unfavorable position.” Sherman recommends having your insurance professional review the lease prior to signing, to highlight any possible areas of risk. So you can be prepared for - and avoid - any future threats to your new business.
6. Jumpstart Your Web Presence:
James Page of Hudson Creative, a digital ad agency that focuses on SEO for restaurants and hospitality brands, recommends setting up your website months before opening. “Restaurateurs are likely concerned with a slew of other issues when opening a restaurant, and only once the restaurant opens do they turn their attention to getting new guests in the restaurant.” Thus, precious time is lost and, it turns out, search engines are actually a bit slow to catch on.
“Unfortunately search engines don't work that quickly, and you can lose a lot of guests in those first few months if it's difficult to find you online. New restaurants should be thinking about publishing their website and requesting indexing from search engines 3 months prior to opening.” Effective SEO will set your new business up to attract more customers online and drive reservations and sales from day one.
If you can conduct this essential prep before signing a lease you will be certain that your new location will be worth your time and investment in 2019 and in the years to come.