A few years ago an associate and I met an inventive woman who wanted to open a small delicatessen featuring assorted soups. She had come up with a budget on her own and had found a wonderful location in a bustling community. We went to check out the space. The first thing we noticed was that the main entrance door was less than thirty inches wide. In order for a wheelchair to get through the door it needed to be an additional six inches clear. A delicatessen serves the public, and part of that public is disabled, therefore the door would have to be widened. he second thing we noticed was that there was only one small restroom in the far back and it wasn’t handicap accessible either. Again, she was going to be serving food to the public; she needed a larger restroom, and even better if she provided two restrooms, one for each gender. Rounding out the necessary construction was a ventilation hood for the kitchen and an upgrade to the electrical.
The woman was panicked. ”How much is all this going to cost?”, she asked. We gave her some budgetary figures and she flipped out. She had not planned for any of these expenditures in her budget. Now she was going to have to go back to her bank and try and get a larger loan. I tried to assuage some of her fears by suggesting that she negotiate some of these costs with the landlord. You see, in order for the landlord to rent to anyone he or she would have to make some of these necessary upgrades. The woman shook her head. ”It’s too late”, she said, “I’ve already signed the lease and everything is on my dime”. I was flabbergasted.
The next question she asked was, “how long will this remodel take?”. Again, we threw out some figures based on typical construction time and permitting time for that area. And yet again she flipped. ”I’ve already started paying on my lease”, she explained. She was already paying a monthly lease for a space she wouldn’t be occupying (and generating income in) for at least three to six months.
This is a real story and I still tell it to clients today. The woman may have had the best idea for a retail space since The Olsons opened their General Store in Walnut Grove (obscure Ingalls-Wilder reference), but she really needed to have a designer on board from the get-go. A good designer could have told her how much this whole she-bang was really going to cost. A good designer could have given her tips on how to deal with a landlord on a space that was not really lease-able in its current condition.
Here’s another quick example: A client wanted to open a spa, but also wanted to sell wine to her customers wine and fruit smoothies. If she was just providing these items to her customers free of charge, she could probably get around most health and legal requirements, but she wanted to SELL these things. She would need a wine license (beer & wine license) and would need to find out if the area allowed sales on Sundays, etc. She would also need a health license to serve the smoothies, since they count as food. This would require a three compartment sanitary sink, and a separate hand-wash sink, a refrigerator, and many other space-eating items. Once all of the requirements were laid out on the plan, nearly half of her spa space was taken up by non-income-generating items. Besides, no one wants to relax in a spa with a blender chopping pineapple and ice nearby.
Another client wanted to sell groceries out of a tiny shop space. This was very do-able until they decided to cut and sell meat. Now you’re talking USDA regulations and requirements which eat up tons of floor space.
Okay, so let’s say you’re looking at a space for your retail business. You’ve already covered such items as location, foot traffic, demographics, square footage needs, etc. Get your designer in there ASAP! They can help you determine:
1. Are there upgrades the landlord should be responsible for?
2. Are there upgrades that you could negotiate with the landlord for, especially if you’re willing to sign a long-term lease?
3. Never pay a lease for pre-construction time. Your payments should start the day you open the establishment to customers. You may pay some kind of initial payment.
4. Make sure you have adequate electrical, water and HVAC (heating and ventilation) in the space.
5. Make sure your budget has adequate amounts for all of the work to be done, including permits, fees, and insurance. Also include a healthy contingency fund for cost overruns, unexpected delays, and those little things that always end up getting missed.
6. Is the space really the right size for your operation? Does the addition of health department regulations take up more space than you’ve allotted? Are you allowing for adequate foot traffic and exiting space?
7. Will the space meet the fire code? What about the Universal Building Code? There are many codes and regulations that you simply CANNOT have waived or obtain a variance for! Even if you somehow overlook or avoid a necessary code infraction, years later you can be sued or fined for the infraction!
8. Are there opportunities for artistic features in the space?
Alright, one final story and then I’ll leave you alone! This client had an ingenious idea for her retail establishment. She already had her business plan written up MBA-style complete with mission statement and long-term financial analyses. She had located a space and signed the lease (without any conditions for the landlord to help with the upgrades). She called me in and I loved both her concept and her fortitude. She was a very proactive do-er! So much in fact that when I mentioned flooring she immediately volunteered that she “had a friend in the flooring business” with whom she’d be working. I started discussing a budget for lighting and she quickly said, “I have a friend I’ll be working with in the lighting business”. I threw out some colors for painting the walls and she hurriedly stated, “I already have my color scheme picked out”. I decided to concentrate on the layout of the space, but she drew in chalk on the floor where everything including the walls were going to be placed. Turns out, all she wanted me for was to put everything onto paper. I was just a facilitator for her. I probably could have made a few bucks, but not having anything to do with the actual design of the space is one of the worst things you can do to a designer. It’s great for a client to know what they want and to have a clear idea of how they want the space to look, but this was overkill or micro-management at its worst.
The only thing that could have been worse is if she called me a “decorator”.
I’ll have some useful leasing terms in an upcoming post.
The End.
