Whether taking out a commercial let for the first time or trying to negotiate a new deal with a landlord, getting the best price will always be important for businesses.
Negotiation is essentially the settling of differences (but at the same time, avoiding an argument or dispute). So, it goes without saying that it can be a tricky game to play.
Understandably, both sides want to reach a deal that works best for them. But in reality, negotiations usually involve some kind of compromise and reach a mutually beneficial agreement.
Here's what you need to know about handling the negotiations process.
Know the market
Heading into negotiations with a commercial landlord without having prior knowledge of the market will immediately put you at a disadvantage.
You will be unaware of how good (or bad) the deal they offer you really is, and whether you will be getting good value for money in comparison to other properties in the area, for example.
If you go in fully clued up, you will be able to put a counter offer on the table and show that you have done your homework. This lets the landlord know they are dealing with a business that knows their stuff.
Be aware of your terms
Commercial lets will have a deadline by which any new deal must be decided. Make sure you are aware of this and have noted it down well in advance.
Doing this will allow you the chance to negotiate more extensively. If you start negotiations too close to the cut-off date, you risk being under pressure, not having time to table a counter offer and having to accept what they bring to the table for fear of missing out.
Don't be afraid to negotiate
You should never be afraid to ask for a lower price. According to Lambert Smith Hampton's latest review, vacancy rates in the majority of the country's biggest cities still exceed 15 per cent, while rents remain below all-time peaks.
What this means is the ball is in the court of tenants. With rents largely staying flat at the moment, there is no need to accept an increase from the landlord. There is never any harm in asking for a lower price. The worst that can happen, after all, is they say no.
Getting the best price on a commercial let is all about making sure your business is paying a level that allows it to make the most money.
However, it's not all about the simple monthly price. Many businesses can get a lower monthly rate by taking out a longer term lease, for example.
Startups often negotiate a deal where they start off paying very little for the first few months to allow them lower starter overheads before the rent increases gradually towards the end of the tenancy.
Be prepared to move
For businesses renegotiating a deal, it may not be preferable to stay where they are at the moment. If you are looking to save, try looking elsewhere if your business is not dependant on geography.
It could mean making substantial savings. For example, the latest reports from BNP Paribas show that while office costs are rising in some areas of the country, they are falling in the likes of Redhill (four per cent), Newcastle (1.7 per cent) and Southampton (1.5 per cent).
Shopping around can help you get the right price for your commercial property.
It may seem like quite an obvious point to make, but landlords are people too, and the negotiations for renting their property should take the form of any other business meeting.
Offer to conduct it over dinner or another traditional setting as opposed to simply dealing with offers through a solicitor.
At the end of the day, landlords are only human, and if they like you, the chances of them giving you a better deal will be much improved.
Getting the best deal is not about the rental rate, although it may seem like the case, so get that idea out of your head before negotiations start.
It is pertinent to look at other things on offer from the lease. Does the landlord offer maintenance and cleaning without an additional fee? If not, ask them to be flexible with this. Although they may not move on the actual cost of monthly rent, a lower management fee will help your bottom line significantly.