Here is a new business checklist of key questions which the business owner should be prepared to answer when planning to lease a space for their business.
Although my recent experience was related to a café business, these questions are generally important enough that they apply to most new businesses, not just a café scenario.
- What is your current credit rating?
- What is your start-up capex budget?
- How much cash will be in the Café LLC’s account at start-up, NOT including capex?
- What other non-cash assets will you bring to the business at start-up?
- How many months of operating costs are built into your start-up cash forecast?
- Do you have any monthly cashflow generated separately from the business? If yes, does generating this cashflow require a time commitment, which will be in addition to running the café?
General Business Experience
- Have you run your own business before? If currently yes, what is the annual turnover? If previously, what was the turnover in the last year of operation and what was the business exit?
- Have you worked with creative people/groups or partners before? Briefly describe how you work with creative talent.
- Have you had employees before? If yes, describe how they would likely describe working with you if asked.
- Have you experienced a business failure? What were some of the main causes of the failure and key lessons you learned from it?
- Have you had experience working with strategic partners before? Here, strategic is defined as another business with which you had a business relationship key to your mutual success.
Marketing and Promotion
- What is your experience with marketing and promotion? Describe the success metrics from a promotion that you have previously designed.
- What are your marketing and promotional plans for the café?
- How do you plan to budget for marketing/promotion?
- What are your planned success metrics for the café? Specifically, what metrics would cause you to extend an original two-year lease into a five-year renewal?
- What are your long-term (post two years) plans for the business?
- What are your professional growth goals associated with the business?
Subject Matter Expertise
In addition the landlord will want to diligence on the specific business sector that the new Business will operate in. For a café, they’ll obviously want to ask about culinary skills, training and expertise. Regardless of the business sector, they’ll want to come up with a handful of questions that speak to the potential New Business owner’s competence in that space.
The new business owner might want to prepare a diligence packet of key questions for the landlord, to minimize surprises along the way and if they’re in a competitive situation this will differentiate the business owner and help them get the space.