No single element of your business is more crucial than getting your rent right. Locking yourself into an expensive lease can severely restrict your school’s cash flow, straining your finances every 30 days. Understanding the nuances of rent calculations and mastering the art of negotiation can make a significant difference in your financial health.
Understanding Rent Calculations
Rent is typically presented either monthly or annually, depending on your location. For example:
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In Florida: A 3,000-square-foot space at $10 per square foot annually might cost you $2,500 per month. The calculation is as follows:
- 3,000 sq. ft. x $10 per sq. ft. annually = $30,000 per year
- $30,000 ÷ 12 months = $2,500 per month
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In California: The same space might be presented as $0.83 per square foot per month:
- $0.83 x 3,000 sq. ft. = $2,499.99 per month
As my dad used to say, “It’s the same thing, only different.”
The Power of Negotiation
One of the most important financial principles you’ll ever learn is this: You will never earn more money in less time than when you negotiate.
Consider this scenario: You’re buying a product listed at $100. You ask, “Will you take $80?” The seller counters with $90, and you agree. In that brief 15-second exchange, you’ve saved $10, which is the equivalent of earning $2,400 per hour.
When it comes to negotiating rent, this principle is even more critical. Here’s how to approach it:
How to Negotiate Your Rent
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Get an Offer Sheet: After your initial walk-through of the property, request an offer sheet from the landlord. This document should outline the terms they’re proposing.
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Keep It in Writing: Throughout the negotiation process, make sure everything is documented in writing. If you reach a verbal agreement during a phone conversation, immediately confirm it in writing with the landlord. In business, it doesn’t exist if it’s not in writing.
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The Two Most Important Words: “Just Ask”: In leasing, everything is negotiable, but only if you ask. Don’t assume the first offer is set in stone. The answer is always no until you ask. Whether it’s a reduction in rent, free months, or improvements to the space, you won’t know what’s possible unless you ask.
Final Thoughts
Negotiating your rent is not just about securing a lower price; it’s about ensuring your martial arts school has the financial flexibility it needs to thrive. By asking the right questions and keeping everything in writing, you can significantly improve your cash flow and reduce financial stress.
Remember, the time you invest in negotiating your rent could be the most financially rewarding time you’ll ever spend.