Hey Newsies,
Today we’re looking at an article from AP News reporting on the rising costs of commercial rent for small businesses. I’d love to hear your thoughts and experiences on this!
AP News: Rent Inflation Remains a Pressure Point for Small Businesses
The article explains that inflation is affecting rent for small businesses, which has been putting brick and mortar business owners in a very difficult position. It pulls data from the Bank of America Institute showing that rents have been increasing in higher percentages than before, at a disproportionate rate to other increasing expenses.
Rising rates of an integral fixed expense like rent is a very difficult thing to overcome, with a lot of business owners feeling stuck and not having a choice in the matter. Moving to a new location can potentially mean the end of a business, and the alternatives aren’t ideal. Owners need to deal with these higher costs by simply making less profit, raising prices, cutting other expenses such as employee labor, or considering moving or closing up shop entirely. Either way, it puts immense pressure and stress on owners just trying to make it through.
In my shop, we had our share of rent increases. This tended to happen around the times that we were renewing our store’s lease. We locked in the terms of increases into our lease so we knew the increase schedule and there were no last minute surprises. Luckily we were given some notice so we were able to plan ahead to raise our prices and try to cut expenses. However, towards the end, the landlord gave us shorter and shorter leases, which became a challenge and left room for more increases.
What’s your perspective:
- Have you been feeling bigger rent increases in the last few years?
- What have you done to offset some of those higher costs?
Can’t wait to hear your thoughts!
Pesso
This article is for informational purposes and does not constitute legal advice. For guidance or advice specific to your business, you should consult with a qualified legal professional.
