“Stay vs Go” Cost Benefit Analysis

“STAY VS GO” COST BENEFIT ANALYSIS

At some stage in the business lifecycle, every business, large or small, needs to evaluate whether they “stay” and renegotiate a lease renewal or “go” and negotiate an entire new lease. This process has a number of moving parts and is not something a business owner looks forward to doing. Most business owners will most likely only need to work through this decision set maybe 3-4 times in their lifetime.

 

So, now you have made the decision that you would like to evaluate the advantages versus the deficiencies of staying or going …. what are the first steps in evaluating the decision? There are several elements to consider, some of which are understanding the comparable market alternatives that could justify a move, working up the costs and benefits of a lease renewal versus a relocation. If you don’t do this type of exercise often, then there is always the empty feeling of “what have I forgotten to consider?” or “what have I not asked for in my negotiation” or “should I have looked at more alternatives?” …

 

Staying or going, both have their own set of opportunities and challenges. In order to work out the optimal solution, there are a number of elements that need to be considered.

 

These include the following:

  • The vision and strategic growth objectives of the business.
  • The potential size, logistics, aesthetics and geographic requirements that will enable the strategic objectives.
  • The number of suitable premises available on the market.
  • The comparable market rent.
  • The cash incentives, rent free period, fitout contributions or any work done to the building by the landlord at their cost.
  • The location and position of the premises in relation to clients, employees, access to transport and road networks, availability of parking etc.
  • Company culture and employee comfort and satisfaction.
  • The makegood costs as you exit an existing premises and fitout costs of a new premises.

 

In order to maximise the results of this exercise, there is a significant investment of time and informed research and analysis are required to evaluate the options and financial outcomes. The impact of this strategic decision will lay the foundations for the profitable performance and growth over the next 3-5 years and beyond.

 

Your Leasing Co. knows the local market and business environment and has the expertise to efficiently compile a short list of site selection options that meet your property criteria. Saving you time, unnecessary stress and uncertainty that is involved in reaching a decision on this important process.

 

Your Leasing Co. is very experienced in guiding you through the decision-making process and then negotiating the best possible outcome on your behalf. Depending on your business’s circumstances, the following outcomes are quite typical:

 

    1. Renew your commercial lease.  If the analysis results in a “stay” decision, we will use the market research generated to position our conversations with the landlord with regard to the key terms such as lease term, rent and incentives package. We will negotiate the best possible outcome using the market comparable information.
    2. Renew and redesign your existing space to maximise profit. Sometimes moving to a larger premise may not be a viable option for logistical or financial reasons, even if the business is growing. We will utilise Activity Based Costing methodology to assist in redesigning the most effective use of the existing space to maximise the area available for profit centres at the current location. This information can be valuable in planning any future locations.
    3. Relocate to a new building. If the analysis indicates that the most value will be obtained by relocating, we will work through the short list of options that fit your property requirements coming from the market research and analysis and conduct the negotiation with the new landlord to secure the best possible combination of rent, incentives package and other terms on your behalf. We will also assist you in negotiating the exit and makegood requirements of the premises you are leaving.
 

Call us for a FREE 45 minute review…

 

The ‘stay vs go’ analysis is the first step in figuring out where the value is. We do this every time we start with a new client. We do all the hard work and make the process as simple as possible to save you time and maximise your profit.

Call us for a FREE 45 minute “Go vs Stay” consult…

Not sure if you should renew or look for a new location?
Let us do all the hard work for you.

Call us for a 45 minute conversation on us!

OUR SERVICES

COVID-19 RENTAL ASSISTANCE

COVID-19 RENTAL ASSISTANCE

Take away the worry and complexity around the Code/Legislation. Apply the relief and protection that is available for tenants and do the work for them.

 

COMMERCIAL & RETAIL LEASING

COMMERCIAL & RETAIL LEASING

Whether you are starting out, scaling up, scaling down or relocating, it’s critical to ensure that you are moving into the right space and in the right location at the right rent with the maximum incentives package available.

 

RENEWAL NEGOTIATION

RENEWAL NEGOTIATION

Turn the tables of negotiating power in your favour. Have the most up to date market information and market experience on your side. Have a professional lease negotiator do the deal for you.

 

“STAY VS GO”<br> COST BENEFIT ANALYSIS

“STAY VS GO”
COST BENEFIT ANALYSIS

At some stage in the business lifecycle, every business, large or small, needs to evaluate whether they “stay” and renegotiate a lease renewal or “go” and negotiate an entire new lease.

 

PROFIT CENTRE ANALYSIS & FLOOR SPACE ANALYSIS

PROFIT CENTRE ANALYSIS & FLOOR SPACE ANALYSIS

The property strategy includes how floor space is utilised and forms the foundation in maximising business profit over the life of a lease.

 

LEASE EXIT STRATEGY

LEASE EXIT STRATEGY

Outgrown your current location? Space too large for your requirements? Managing the exit or restructure of a lease is another form of specialist lease negotiation.  

 

PERFORMANCE GUARANTEE

We “performance guarantee” our fees. What does this mean?
Our view is that we should generate value and savings that exceed the investment made in us and the services we provide for you.
So, if we don’t achieve this, you don’t pay!