Starting a business is exciting stuff, but it’s not for the faint of heart. Almost from the moment you decide to start a business you will be navigating the negotiation tables with yourself, vendors, clients, and more. When it comes to starting a business, you’ll eventually need lots of money. But that doesn’t mean you can’t do it on a shoestring budget for the time being. Think about the ways you can curb the cost of startup from day one and your business will be better off in the long run. Being “cheap” is one thing. Being “frugal” is a skill. You don’t need to be a fast talker to save some money. You just have to be willing to talk to people to find out how you can help them too. Here’s how you can negotiate a better deal on your startup’s rental agreement to save money on space.
Don’t get more space than you need to. Even if you have millions of dollars in investment, don’t waste it on rent. There are lots of other ways to get space without having to break the bank. If you aren’t married to the idea of running your startup in your basement then you’ll need to fork over some funds to cover the cost of rent. Get a space that is suitable for your business for now. You can always upgrade later if needed. Find something you can afford on your own until revenue starts rolling in; when you are comfortable with your revenue models over time, you can get a new, bigger, and fancier space if you wish. You might even consider shacking up with another company that can pay for half the rent or elevates the status of the building as well. Your landlord may be open to various options if it behooves them to do so. Don’t give up after one attempt – there are lots of landlords who would love to have a rising start company in their building.
Offer More Than Money
If you are the new kid on the block and everyone is talking about your super fantastic new tech product, you might be able to score some free rental space with your landlord. If you are looking at underdeveloped or up-and-coming spaces, which is a code word for “not great”, you could use your reputation as currency. Rather than pay high rental rates, make it clear to the landlord that their building would be better served with you in it and ask for a discount on the rates. You won’t know until you try and if you are someone that people have been talking about, your likely to win that negotiation.
Offer Stock in Exchange for Rent
If you have big plans for your company, you might be able to negotiate a trade: space for stock. Depending on the product or service you offer, your future landlord might be more than happy to take a piece of your company in exchange for some space. If you can’t negotiate the full price of the rent own to zero dollars, consider offering up some portion of the rent for stock and see if you can get a good deal that way. You might also consider asking for a deferred rental payment, especially if your company has some eyes on it. You can write a promissory note to your landlord to pay within a certain time frame as you continue to build your capital funding strategy and build your company.
Offer Services in Exchange for Rent
When it comes to starting a business, so much is unknown. There are many factors that come into play and many things that will take your money away as quickly as it came to your company. If you are struggling to get started, consider working in co-working space that is affordable or even free until you are up and running. A lot of startups choose to stay in a space that is shared because of the camaraderie and social aspect – not to mention the cheaper rents. There are several ways you to cut the cost of rent almost entirely by offering to trade services for rent, offering to act as superintendent for rent, offering to bring other big businesses into the building who would otherwise just absorb the cost of your rent. The more you are willing to do for your landlord, the more likley you are to get your rent at a deep discount or free.
Don’t let high expenses hold you back from building your business. In today’s world, you can start a business from your kitchen table and thrive in no time. Hard work, dedication, and a commitment to doing what’s best for the company will get you where you want to go. Seek out and find landlords who are supportive of startup companies and offer incentives for new companies to rent from them.