How do I Choose a Retail Location? Lesson 2: Good Property Management
Have you always owned your own home, or have you ever rented? If you've ever rented your own home, you'll know what a nightmare some landlords can be. Maybe, you've owned your own condo and know what a nightmare some condo corporations managers can be? Unfortunately, dealing with landlords and management companies when you are running a store is no different.
This is something that business owners who've never run a store never think to think about - it's the hidden issue that people rarely talk about, but is a really important factor if you want your store to succeed. The right landlord and the right management company can make the difference between your store staying in one place for years (an important factor in success), and you deciding to move the very next year.
A Good Landlord
The answer to this issue is to choose your landlord and choose the management company wisely!
For many street front, standalone stores, there is no property management company to speak of, so you'll only have to deal with the landlord. For stores in malls or some other enclosed space, however, there is usually also the management company to deal with.
A store with a great location and great visibility, but with lousy property management or a landlord who is not willing to work the the tenant (that's you, you're the tenant), may still thrive, but life is going to be hard for you. Why not just choose a retail location with everything? Good location, great visibility, a generous landlord and an open-minded management company.
Before you even talk to the landlord of a store for rent/lease, talk to nearby store owners. Do they know him/her? Do they like him/her? Do they think it's a good idea to rent that particular store from that landlord? People love to gossip and other store owners can be your best allies when deciding to rent a store or not.
Next, you should arrange an appointment with the landlord (if he has a real estate agent, you must insist on meeting the landlord yourself - if the landlord does not want to meet even after you've decided that you like the place, that's a red flag). Talk to the landlord about your ideas, ask him about things he can do for you (e.g. make repairs, pay some of the costs of sprucing up the place, give you a month or two of free rent while you get the place ready, etc.). If s/he seems very receptive, generous and open to your discussions, you've got a winner! If s/he seems cheap and greedy or mean... well, you're going to want to think about this particular storefront very carefully.
If your landlord checks out, then it's time to meet the management company. You can either go introduce yourself to them (they'll usually have an office), or you can ask the real estate agent or landlord to arrange a meeting. Talk to the person responsible for your particular building - s/he's the person that will make things run smoothly or bumpy. Ask lots of questions, talk about the future of the retail spaces, etc. Get an idea for this person. Is s/he open-minded and generous, or close-minded and greedy? Especially, make sure you get along well with this person, because you'll be dealing with him/her a lot in the future.
Remember: don't let the positives outweigh the negatives of a bad landlord or bad management company. These two factors can really bog you down when you're already working hard enough running your store day-to-day.
The Property Management Company
I once rented a retail store in a quiet little mall in a town north of Toronto. My landlord was a really generous fellow and easy to get along with; the owners of the other stores loved him! He helped me out by paying for half of some upgrades I needed and in the end, even let me out of my contract early. But, why did I need to be let out of the contract early? Bad management.
The property manager of the mall was a self-centred, stubborn kid who had something to prove to the world. He wouldn't listen to any suggestions from the store owners and made it hard for me to run my business (my store was geared toward young people, but the mall was geared towards older people and they didn't like it one bit).
In the end, I chose to leave the mall, rather than fight the management, and that's what could happen to you, too, if you make the same mistake I did!