Jim Culverwell

How are you feeling about your business premises for the coming 12 months? If you’re rapidly expanding or pivoting into a new offering and your lease expires or you have a break clause option in the near future, you may be considering whether to stay or go. You may even be considering relocation to benefit your staff or improve your recruitment opportunities. Before you decide to serve notice and find new premises better suited to your needs, a pros and cons list could be helpful, but here’s another option you could consider: staying doesn’t have to be the lesser of two evils! 

As part of your consideration process, here are some questions to ask yourself: 

• How is the premises currently delivering value for the business? 
• How could it better serve the needs of the business?
• Are there any shortcomings we’d like to change if we could? 
• How far away is your upcoming break clause or lease expiry date?

It might very well be that there are ways your existing premises could serve you better, with a change in your lease terms. Many of my clients don’t realise that a future break clause or lease expiry is not just a done deal, it can be an ideal point in time to initiate negotiation on these terms. 

So how do you go about this?

• Firstly, remember that you are in just as much of a position of power as your landlord! At the end of the day, your landlord probably won’t be best pleased with the thought of having to go out to find a new tenant, with all the associated cost, risk and uncertainty, if you leave. However, you do need to be willing to follow through and leave, if you don’t get what you want.
• Secondly, you can use this position to your advantage! Offer your landlord a choice: you’d rather stay than serve notice, but here’s a list of terms you’d like to amend in order to commit. Remind them: in return, you don’t need to find a new occupier.
• Thirdly, consider the timing of your approach. You need to present your requests in a competent, clear and well-argued way and give your landlord plenty of time to review them. You also need to have enough time yourself, to go and search in the market for alternative premises, in order to be credible and in case the answer is no!

Remember: you are in a position of power so long as you educate yourself. If you decide to serve notice to send a message that you’re unhappy with your terms, the landlord could still tear it up and decide to enter a negotiation with you. Be prepared to put your money where your mouth is – the risks may very well outweigh the rewards.

Want to know more or talk through your situation?

Click here to book a free mentoring call or click here to discover more about my simple, affordable online courses that demystify the world of commercial property.

Residential vs commercial property: is what you know transferable? 

If you’re thinking of taking on premises for your growing business, you may find yourself thinking “I’ve bought and sold plenty of houses – I’ll be fine” or perhaps “Does buying a commercial property make more sense than renting?” The common assumption in British culture is that when it comes to residential property, although you may rent in early life, you’ll work your way towards buying a house as soon as you’re able.

In my work supporting business owners to find and negotiate the right premises to add value to their business, I often see people bringing their experience of residential property with them. There are actually more arguments in favour of renting commercial property than many people realise. In this blog, I set out to bust three of the biggest myths and shed light on some of the key differences between residential and commercial property.

Myth #1: “Rent is money down the drain”

I often speak to people who believe renting commercial premises is a waste of money and are therefore hell-bent on buying a building, often at great cost. Perception is key here. The truth is: paying rent is akin to paying an employee – you get something in return. The right premises should deliver value to your business as a member of staff would, which is why I often advise clients looking to acquire premises, to start by writing a ‘job description’ for their ideal premises.

I also advise my clients facing a decision to do with their premises, to consider their business plan. It’s easy to take a short-term view and just address the immediate, perceived problem, but what about the long term? What happens if you’ve purchased rather than renting and your business grows rapidly? Conversely, what happens if it shrinks?

If you buy a building and put your business in it, you’re essentially putting all your eggs in one basket. Moving buildings will be a much more arduous, costly and lengthy task as an owner, which could risk holding the business back. Renting a commercial property means it is much more nimble, which is key to business survival (particularly in recent years!)

Myth #2: “My agent will help me get a good deal”

The agent in any property transaction is acting on behalf of the landlord, but never has this been more important than in a commercial property lease negotiation. In fact, comprehensive knowledge is essential to negotiate on equal terms with a landlord. The landlord’s agent may have that comprehensive knowledge but do you? Don’t forget, the landlord and their agent do this sort of thing every day and so they are quite good at it. Ideally, you need experience and understanding equal to theirs, to level the playing field and get the best outcome for your business. They are trying to do the same and so will not tell you anything that might prejudice the outcome for them. Those are the things you need to know.

For example, terms like alienation will appear in a lease document, which you won’t have heard in a residential property transaction. Alienation is an obscure term for passing on your liabilities if you no longer need your business premises. The importance of the alienation clause in a commercial lease comes into play when you might need to sub-let the premises in the future. Defining what alienation looks like for you, before you sign that lease, will allow you to build in the flexibility your business needs. Spoiler alert, the landlord and their agent aren’t going to help you with this.

Myth #3: “The law is on my side”

There are big differences in legislation across commercial and residential property. In residential, there is much more in the way of support of the tenant. Certain legislation protects the tenant when a lease is up, which controls what can and can’t be claimed in terms of damage. Repair obligations are therefore far less for a residential tenant than a commercial tenant. In a commercial lease negotiation, whatever the tenant signs up to in terms of repair is a binding commitment and is agreed ahead of time. The most important action you can take is to know your options and rights ahead of time, just as you would in a residential property transaction. Negotiate the requirements of any repair and decoration clause in the heads of terms, so that what the lease says is fair to both parties. If the building’s initial state does not match what is assumed by the lease, you should consider a Schedule of Condition to document all the details upfront.

Is it time to get a better grasp on the basics?

Hopefully through reading this blog post you will have realised you might have some valuable knowledge already, but perhaps there will also be things you realise you don’t know. There will even be things you don’t know you don’t know, especially when it comes to the nitty gritty technicalities of lease terms.

That’s why I created my suite of online courses to help you develop the knowledge and understanding you need to find and negotiate the right commercial premises on the right terms. With a combination of video content and some simple exercises, you will walk away from these courses with a full understanding of the end-to-end premises selection and/or lease negotiation processes. With the correct knowledge about how the process works and what you are able to influence, you’ll have the confidence to make the right choices to suit your needs and your business.

Click here to learn more about my online courses.

Let’s be honest: when was the last time things weren’t tough for business owners? Looking back over the last few years, I would suggest that we accept difficult business trading conditions are just the new normal. I like to use the analogy that if you’re sitting in a boat in the English Channel, you should expect it to be rough. If your average fisherman didn’t go out when it was rough, he would go out of business pretty quickly! The answer of course is not to avoid rough weather, but to ensure you’re properly equipped (as the saying goes, there’s no such thing as bad weather only inappropriate equipment). As business owners (and some of us perhaps fishers!), we have to do, say and make decisions on the right things to ensure we can weather any storm. Not least, because you can guarantee that after the current financial storm, another one will be on the way.

Here are some useful tips for not only recession-proofing your business, but ensuring you’re equipped to weather any storm.

Regularly review your expenses

When the cash is flowing, how much attention do you pay to your finances? It’s all too easy when times are good to assume all is well. It’s often only when cashflow gets tight that business owners take the time to review expenses and see where they can make savings. No matter your financial situation, ensure you regularly make time to review and reduce expenses where possible. Your future self will thank you for it.

When contemplating signing any kind of commercial property agreement, it’s worth considering both the upside, where business booms and you’re at risk of running out of space; as well as the downside when you have to reduce headcount and have a surplus of space. Building in flexibility where possible will stand you in good stead when the climate changes.

Review your client portfolio and stability

It’s fairly obvious that paying attention to your own business finances makes sense when the economy is shrinking, but how often do you pay attention to your clients’ finances? Don’t wait for a missed invoice as the trigger, but keep an eye on all of your main clients’ performance at all times and where you can, get paid up front. Find ways to get ahead of your clients’ challenges and offer solutions – this could lead them to increase their spend with you, rather than reduce it. Aim to make yourself indispensable, whilst remembering that you never are completely.

Being able to offer relevant advice on both sides of the economic cycle, has enabled me to weather two pretty serious recessions in my own business.

Stay flexible and adaptable

If we learned nothing else from the COVID-19 pandemic, it was the value of the ‘pivot’. Businesses that were conscious of opportunities to be flexible and solve their clients’ problems in new or different ways thrived, whereas those that couldn’t adapt struggled to stay afloat. Adopting an agile mindset at all times, not just when circumstances force you to, will help you stay relevant and spot new opportunities for growth. Again, having relevant ways to support clients in uncharted waters will help them find direction, and they will remember that.

Listen to your customers

Your clients are the lifeblood of your business, there’s no two ways about it. When business conditions are tough, staying close to your clients will help you to stay close to their challenges. Relationships are key in business, especially during difficult times. Consider what you can do to regularly nurture your client relationships and spot opportunities to help them overcome their challenges – this will make you sure you stay relevant, even when financial conditions are tough.

Consider diversifying your product & service portfolio

What else could you offer your clients? Offering products and services that solve problems connected to your core offer can be a great route to making your business ’sticky’ with your clients. This is one of the keys to recession-proofing, and life-proofing, your business. My online courses have been a great addition to my own portfolio of services, particularly for start-up and fledgling businesses taking their first steps into commercial premises.

A final bonus tip

The media is at best a distraction! After all it’s produced by people/agencies with their own agenda. If you find consuming news stressful, I would advise taking it with a pinch of salt or reducing your consumption. Over my 35 years in business, I’ve had to make my fair share of difficult decisions to survive. Crucially, what I’ve learned is that if you keep telling yourself it’s tough, it will be. This is where it’s essential to get perspective where you can and remind yourself that there is always someone having it tougher than you.

Need some help?

I offer a free mentoring session to all business owners looking to take a step back and get perspective their business. Click here to book yours.

Many a consultant, coach and guru will promise to help you grow and scale your business, but what does that really mean? What is the difference between growing and scaling and which one is right for you? In this blog we’re going to look at why growth and scale mean different things, and how to use a business plan to inform the right decision for you and your business.

Let’s start with ‘business growth’. Traditionally this means adding in additional resources, such as more staff, or larger premises, to serve a greater number of customers or clients. Whilst growing your business should hopefully result in higher revenues, your expenses will rise as well.

Scaling your business, however, is when you look to increase existing revenue or open up additional revenue streams, without necessarily increasing the resources required. For example, you could raise your prices or create passive income streams. The key difference with scaling as opposed to growing, is that you’re increasing your revenue while maintaining or reducing your expenses.

Now let’s talk about you. Are you in growth mode or scale mode? Here are some top tips to help you find out what your business needs to deliver on your vision:

• Revisit your business plan. What is your goal for the next 12 months vs the next 36 months? Your business plan should be your north star. Consider whether more growth might be needed before scaling is possible.
• How much time do you want to be spending in your business? If you’ve been growing for a while, you might have been spending a lot of time hands-on. Could it be time to look at scaling so you can get some of your time back to do things you enjoy?
• Consider your mission and purpose. Do you have something established you’re looking to reach more people with? Or something new you’re looking to test out? Think about the legacy you want to leave with your business and let this guide you.
• Think about how you can work smarter, not harder. Whether you want to grow or scale your business, bigger is not always better – especially when it comes to premises! Regardless your business priorities, you should always be reviewing your expenses and trying to reduce them where possible.

Is a premises move on the cards for you?

Adding more floorspace in order to grow is also adding a slug of fixed overhead the business has to pay for each month before making any surplus. Think very carefully before adding overhead and be sure there aren’t other ways of growing your bottom line first. The time to be making that move to a bigger unit is when ‘not having that space’ is holding the business back.

Working from home or a small premises may be fine for you for a while, but if headcount is increasing or another production line is required, you are probably going to need accommodation that is better suited to your needs. If you need support finding the right premises for your growing or scaling business, I can help with the end-to-end premises and lease negotiation process. We’ll do it in a way that works for you, so you get the right premises on the right commercial terms.

Get in touch to book a free mentoring call and understand what your business really needs to deliver on your vision.

 

As we face (yet another) period of economic uncertainty, many business owners I speak to are asking what they need to do to weather the storm. As a business owners who has been through two big recessions and lived to tell the story, I wrote this blog to share my experiences and some top tips to help you focus on the right areas.

Rewind to 1990

At the start of the recession in 1990, my last but one PAYE job ended quite abruptly and unexpectedly.  Although I enjoyed a pretty much uninterrupted boom (and quite a few bottles of champagne) through my early career, being made redundant came like a bolt from the blue.

My wife and I were expecting our first child, so our financial situation rapidly became unsustainable.  My next job was not in view yet and we were going to lose the second salary very soon. For quite a few weeks I floundered, then I gave myself a talking to and did two things.

Taking action

First, I began volunteering at the Star and Garter Home, then on the edge of Richmond Park.  A refuge for severely injured soldiers, sailors and airmen, they needed unskilled volunteers to give their time.  I suddenly had loads of that and was more than happy to give it. Through meeting and serving these brave and courageous men and seeing the mental and physical trauma some people live with daily, I realised that far from my life being devastated, I was in fact extremely lucky, in so many ways.

The second thing, perhaps prompted – or at least made easier – by the first, was to sell our lovely, Edwardian terraced house in Twickenham and rent a much cheaper property more suited to our circumstances at that time. Still a very pleasant place to live, it became our first family home and the platform from which to relaunch myself.

My next job came because I had helped a major institution solve a serious property problem in East London and they hired me on (initially) a 12 month contract. Over the next five years I was part of a team dealing with a £600,000,000 portfolio of commercial loans, most of which were non-performing in one way or another.  In the end, I was the only one left in that team.

It was fast moving and a fantastically steep learning curve for everyone. Part of my remit was to meet people with failed businesses and loans they could not service, to tell them to stop and to hand back the keys. Don’t judge unless you have done this, but the tough decision I took to match my own commitments with my changed circumstances, promptly and ruthlessly definitely made this easier.

Another recession!

In 2008/9 I was drafted in to work through a very similar debt book with connections to Northern Rock and Lehman Brothers.  That one was about £887,000,000.  Several factors made the strategy and outcomes quite different but that’s another story. I carried out that work alongside my business here, in Hampshire helping business owners renegotiate lease terms with worried landlords. Unsurprisingly, I was quite good at it, and it has to be approached in the right way to get a good result.

My top tips

With another recession on the horizon, in a way I know I’m fortunate to be able to say “I have been here before”. So here are my top tips to help you weather the financial storm:

1. Put your situation into perspective by helping others with bigger problems than you.
2. Review your business plan in light of changing circumstances and outlook – does it still serve you?
3. Take the hard decisions early.  I can’t emphasise enough, how important and beneficial that can be.
4. Be smart with your resources.  Don’t splash out, but don’t make cuts that will hurt you long term. There has to be a business case for every penny.
5. Don’t be light weight with a heavy weight problem. For example, I see this with many clients renegotiating the lease on their premises.  If you want your landlord to take you seriously, he needs to see that it’s serious and you’re serious.  Put together a comprehensive, forceful and properly argued case (of of course – just call me!).
6. When cashflow is a struggle, always pay the body that can ruin your business.

Need some help?

If you haven’t questioned what your premises are doing to take  your business forward recently and whether they are “the right fit” in the current climate, then it may be time you did. I have a suite of online courses that could help you discover the key areas you need to consider and change the way you think about premises forever. Not to mention save you lots of hassle, time and money!

Click here to discover more: https://talk-to-jim.teachable.com/