Choosing a Location
- Starting a Business
Deciding on a business location is one of the most important decisions a small business owner or startup will make. It requires careful planning and research. It also involves looking at demographics, assessing your supply chain, scoping the competition, staying on budget, and much more.
Your business plan should provide a good description of your target customers - who are most likely to purchase your products or services? Use this information to your advantage and consider how you can locate your business to serve your target customer base most effectively.
Consider factors such as age, ethnicity, gender, income, buying habits, occupations, and household composition. For instance, if your target customers are mothers with small children, you may want to think about locating close to family-friendly neighborhoods or other family amenities.
There are several online tools you can use to conduct a demographic analysis. PolicyMap and Esri Atlas are both examples of free websites that aggregate demographic information and can help you research potential locations for your business.
Leasing commercial office space is one of the largest expenses incurred by new and expanding businesses, so it is important to do your due diligence. Here are some tips for negotiating a commercial lease for your small business.
Lease term and rent are your first negotiation points. It's generally recommended that small businesses negotiate one- to two-year leases with the option to renew. You will also want to factor in rent increases over the term and renewal options so you are not charged with an unexpected rent increase without warning.
Consider working with a broker to help you negotiate with the landlord. It's also important to consult a knowledgeable real estate lawyer, who can recommend the right choice for you and protect your interests as you negotiate your lease through the broker.
In addition to your monthly lease payment, find out what expenses you may incur beyond rent. Commercial real estate landlords often incorporate extra expenses into the lease such as maintenance fees, upkeep for shared facilities (common area maintenance or CAM), etc. Other expenses to consider are utilities. These charges are usually the responsibility of the tenant, so find out how these are measured. Are they individually metered or apportioned by square footage? Ask to see these “hidden fees” and policies as well as examples of costs that are typically incurred by tenants.
Maintenance and Repair
While residential leasing often places the burden of maintenance and upkeep on the shoulders of the landlord, commercial leases are different. Commercial leases vary regarding maintenance and repair – some stipulate that the tenant is responsible for all property upkeep and repairs while others specify that the tenant is responsible for systems like air conditioning, plumbing, etc.
Read the Lease
Be sure to read over your lease in detail and hire an attorney who specializes in commercial real estate to walk you through the clauses and fine print.
Protect Your Business
To protect your investment and long-term business interests, it is worth investigating and negotiating some potential add-on clauses to your lease. These might include:
- Sublease – This builds in some flexibility, allowing you to sublet your space to another business.
- Exclusivity clause – Prevents the landlord from leasing other spaces on the property to a direct competitor of yours.
- Co-tenancy – If the property’s anchor tenant closes business, a co-tenancy agreement can protect you from a potential loss of customers, allowing you to break the lease if the landlord does not replace the anchor tenant in a specified time period.
What if You Default?
Should you default on your lease payments, there are steps you can take during the lease negotiation process to protect yourself. Find out what the lease agreement states. Will you be locked out immediately? Will the landlord initiate eviction proceedings? Can you negotiate more time? Could you pay only the current month’s rent instead of the remaining amount owed on the lease?
Check the Zoning
All property within the City of Virginia Beach has a zoning designation that says what types of business uses are allowed on that property, as well as other requirements such as the required number of customer parking spaces. These regulations help protect both business owners and local residents – you may not want a liquor store to open next to your daycare center.
It's important to make sure you understand what's allowed on your property and whether your property conforms to local zoning requirements before signing a lease. While it's possible to get exceptions or waivers from zoning requirements through The Department of Planning & Community Development, it's often a costly and time-consuming process. Finding a property that's already zoned for what you need is the easiest and fastest way to get started.
Home-based businesses require a business license and must provide proof of residency and complete the Restrictions for Home Use form. If you're locating near NAS Oceana, please read the notice, "New Businesses Locating near NAS Oceana." Home-based businesses are allowed under the following circumstances without a conditional use permit:
- The business use of the home is clearly incidental and subordinate to the residential use of the home. There is no change in the outside appearance of the home or lot and no noise that can be heard from the street or neighboring property.
- There is no traffic generated beyond what would normally be expected in the neighborhood. Vehicles associated with the business, including customers, are parked in the driveway and not on the street.
- Only one commercial vehicle is permitted provided its carrying capacity is one ton or less, its height is 7 feet or less, and its length is 20 feet or less.
- The person operating the business lives in the home.
- No person other than members of the immediate family who also live in the home are employed by the business. (With a conditional use permit, one employee who does not reside in the home is permitted in addition to family members who live in the home).
- The business must be located only in the principal structure on the lot (cannot be in an accessory structure unless a conditional use permit is approved).
- There are no sales of products or merchandise to the general public.
- No more than one patron, customer, or pupil may be present at one time (unless a conditional use permit is approved).
The following businesses are specifically not permitted in the home: convalescent or nursing homes, tourist homes, massage or tattoo parlors, body piercing establishments, radio or television repair shops, and auto repair shops.
Some home businesses require a conditional use permit. Contact the Zoning Office at (757) 385-8074 to find out if one is required. If a permit is required, contact the Planning Department at (757) 385-4621 and ask to speak to a current planner or download the conditional use permit application package and read more about the process.
Don't forget to get your business license.
For more detailed information on home businesses/occupations, see "Accessory Activities Operated for Profit in a Residential Dwelling..." in Section 501(b)(5); the definition of "Home Occupation" in Section 111 (Definitions); and Section 234 (Conditional Uses and Structures: Home Occupations) of Appendix A, Zoning Ordinance of the Virginia Beach City Code or contact the Zoning Office at (757) 385-8074.