So its set. I'm officially trying to open a shoe store in Brooklyn. After my wet tour of several Brooklyn neighborhoods, I began speaking with two different realtors/landlords about spaces. One seems to be moving rather quickly... we've passed back and forth a number of 'letters of intent' or LOIs, where we're trying to find some common ground from which to draft a lease. The other space is moving very slowly. I don't know if the landlord isn't eager or interested... but I have a feeling the realtor is dragging his feet.
For anyone who is starting out in this process... it is not as simple as renting an apartment. I've had to reach out to several people to see if what the landlord is requesting is reasonable. Not having a great deal of experience makes this more tricky - not to mention that paying a lawyer to review everything you're doing adds up very quickly. I tried checking out some books on commercial real estate leasing and negotiations. Unfortunately they gave very different advice then my contacts did.
For example - one book -"Negotiate Your Commercial Lease"by Dale R. Willerton - suggests offering a personal guarantee in your letter of intent.
If you start a business as some legal entity other then a sole-proprietorship, then you have a legal structure that protects your personal assets from being on the line. In other words, you make a separation between your personal finances and your business'.
So, if you - in this case your business - signs a lease for 5 years, and 3 years into it your business goes bust, it is only the business that is responsible for the debts and not you as an individual.
Now, once you sign a personal guarantee then that whole legal structure's protection goes out the window, and you are now personally liable for whatever debt you signed the guarantee.
For obvious reasons, landlords want a personal guarantee, and for equally obvious reasons, tenants do not want to sign them. It would seem that it is really bad advice to begin your negotiation with conceding such a major sticking point - Assuming it is even a point that should be conceded.
In my case, negotiations are now in full swing on two fronts. I'm holding my breath, hoping that all goes well. I really like both these spaces, and am not sure I'll find something really good in their place, should both fronts fall through. To make matters worse, I learned today that one of the landlords, while considering my offer, and having already met face-to-face, is still showing it around, trying to get a better deal. This is of course logical on his part - since we didn't sign anything agreeing to exclusive dealings - but on learning that, it made me realize in how precarious a position I'm still in.
So nothing is set, at all, and I'm super nervous/excited to get the deal done.
In other news - I'm going to the WSA (World Shoe Accessories) Show in Las Vegas!!! At the end of July. I'm very excited about this. I've been teetering back and forth, not wanting to go, without the certainty of the business opening. But the longer I waited, the higher the costs became. Finally, I just decided it is worth the expense, even if things don't go smoothly with these negotiations.
To my knowledge, this show is the biggest trade expo in the industry. There, I will be able to see all the latest brands and styles. I hope to post some pics of the shoes I see, and maybe even what I hope to bring to my store. In which case, there may be a sneak preview of what I'll carry. I'm also thinking of adding a twitter account, to make the adventure more dynamic, and post throughout the day...
It would be great if anyone posts comments on some of the shoes I post. I would love to see feedback - especially from Brooklynites - on what they like or don't like.
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