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Whether your cigar business requires acres of warehouses, a small retail space, or a few functional offices, it needs to be somewhere. But whether it’s better to lease or to buy the space you need — that is the question. For many in the industry, the benefits of a commercial lease make this the more feasible option. A word to the wise, however: Be sure you understand all of the terms of your lease, lest you wind up locked into a contract that puts your business at risk.
What Types of Property Is a Business in the Cigar Industry Likely to Lease?
The answer to this question depends on what your cigar business focuses on:
- A tobacco farmer might lease one or more pieces of farm equipment or real estate, such as land or even office space.
- A cigar manufacturer might lease production equipment, such as cigar rollers.
- A cigar distributor could lease a warehouse to store their inventory.
- A cigar retailer might rent a storefront location.
What Are Some Advantages of a Commercial Lease for a Cigar Business?
You don’t always have to lease business property — sometimes, purchasing the property is the better option for a cigar business. However, commercial leases offer several benefits over ownership, such as:
- Flexibility: If your business needs change due to volatility in the cigar market or new regulations, it’s often faster (and sometimes cheaper and easier) to end a lease or not renew an existing one.
- Accessibility: A commercial lease may offer you access to certain properties and equipment that you couldn’t otherwise afford to buy.
- Cash flow: Making lease payments over time could free up cash that would otherwise be used for a down payment on a purchase.
- Property management: Many commercial leases allow for provisions that shift the burden of repairs or maintenance onto the property owner, giving your cigar business one less thing to worry about.
How Can Cigar Industry Professionals Protect Their Legal Rights and Get the Best Terms When Negotiating a Commercial Lease?
The best way to protect your rights and get the best terms is to hire an attorney to help during commercial lease negotiations. An attorney can identify provisions that put your cigar business at a disadvantage and then help you remove or renegotiate them.
For example, the default language in a commercial lease might put the financial burden on your cigar shop for any repairs to the HVAC unit. But this is likely a negotiable term, and the property owner may be willing to agree to split repair and maintenance costs 50/50 or only ask you to pay the first $1,000 in costs with the owner covering anything above that.
Before signing a commercial lease for your cigar business, contact the cigar business attorneys of Venerable Law by calling 813-680-4530. We offer free consultations and are eager to help you through the commercial lease negotiating process.
