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Opening up the doors - how much should you have saved up for the lease?

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Flybye

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Feb 19, 2018
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Hi all,

When opening up your shop for the first time, how much cash do owners usually have to pay the lease for x number of months if there is zero income? I find it hard to think I would have zero sales for a few months since I know the product and have done so for another, but Id like to gauge on what a small business owner "should" have for at least a few months of lease if there is no sales.
 

Vigilante

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Hi all,

When opening up your shop for the first time, how much cash do owners usually have to pay the lease for x number of months if there is zero income? I find it hard to think I would have zero sales for a few months since I know the product and have done so for another, but Id like to gauge on what a small business owner "should" have for at least a few months of lease if there is no sales.

Somewhere in-between 2 months and 36 months based on the product category
 

LightHouse

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Are you negotiating a lease right now? You typically have to have pretty strong financials to get a place that isn't a shit hole.
 

ZCP

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They'll want some money to hold.... first and last..... depending on the area, you can sometimes negotiate lower or no rent upfront and higher payments later when cash flow is better.

Explain to them that you would rather put your cash into sales at the beginning so that you can be there for a long time.
 

AgainstAllOdds

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How are you selling?

Can you bring the product to the customer?

If so, then start in your garage. You can quickly get a space when necessary and scale.
 

Flybye

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Feb 19, 2018
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Cuba v2.1 (Miami)
Its a small warehouse based used car dealership. Depending on the quality/quantity of the cars I purchase, I could have between 2-4 months of lease payments made if I sell zero cars. But I dont see myself not at least selling 1-2 cars a month to start with. Im a car guy that knows what to look for in cars and I even used to sell cars for a few years. My typical channels would be Autotrader, offerup, FB, etc. I know I can push a minimum of 1-2 cars a month, but I think paranoia is kicking in.

I havent signed a lease yet. Some want 1st, last, and deposit. Some just want 1st and last. Im trying to be picky by getting a warehouse near residential areas vs a warehouse buried in the middle of an industrial complex.
 

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