What to check before committing to business premises
Assess a premises offer by its usable operating scope, recurring cash commitments, upfront payments and unresolved conditions. Headline rent is only one input. Confirm how the intended activity fits the address and what work, permissions and payment terms it requires before committing.
What you will produce: A comparable premises cost summary and a list of conditions to resolve before the next commitment.
Updated September 6, 2026 · Worked examples and editable worksheets
What to have ready
Bring the proposed premises terms, plan, intended use, equipment requirements and any available work or utility quotes. This guide organizes the decision; the agreement and applicable requirements need their own professional and official review.
Work through the calculation and decision
How do you compare recurring occupancy costs?
Use the same area and charging period for every offer. Record base rent, service or pass-through charges, utilities and other standing occupancy payments. Identify whether each amount is quoted, estimated, variable or still unknown. Separate any escalation and concession period so the opening year does not disguise later costs.
Explain what the quoted area and charge basis cover. A lower rent can come with more work, less usable trading space or a less suitable operating window. Keep those differences in the comparison rather than collapsing them into a single rent number.
What cash is required before trading?
List refundable deposits, advance payments, fit-out, installation, professional work and verified one-time charges. Record who pays, when cash leaves and what triggers a refund or reimbursement. Landlord contributions or concessions should have their actual conditions and payment dates.
A refundable deposit is a cash commitment even though it may not be a current expense. Avoid adding a prepaid month twice: if it is already in upfront payments, adjust the recurring payment schedule accordingly. The simple calculator assumes upfront items do not duplicate the 12 monthly amounts.
Which nonprice conditions can change the decision?
Check the exact proposed activity, layout, access, utilities, delivery arrangements, permitted hours and any required approvals with the relevant parties. Identify work dependencies before equipment orders. Record responses against the actual address and operating scope.
Have the appropriate adviser examine the proposed agreement, including responsibility for repairs, alterations, insurance, assignment and exit commitments as relevant. A cost calculator cannot determine whether a clause is acceptable or a use is authorized. Retain unresolved items in the decision record.
$2,500 rent becomes $3,500 of monthly occupancy cash
This authored offer assumes no escalation, no prepaid overlap and no reimbursement during the illustrated first year.
| Item | Amount | Period |
|---|---|---|
| Base rent | $2,500 | Monthly |
| Service and pass-through charges | $550 | Monthly |
| Utilities | $300 | Monthly estimate |
| Other occupancy payments | $150 | Monthly |
| Total occupancy cash | $3,500 | Monthly |
| Deposit, fit-out and other opening payments | $26,000 | Before opening |
| Upfront cash plus 12 monthly payments | $68,000 | Illustrative first-year outflow |
What this changes: The first-year figure includes a $5,000 refundable deposit as tied-up cash. It is not a profit-statement expense total or a complete business opening budget. A suitability problem can still rule out the site despite an affordable number.
Calculate the cash attached to one premises offer
Start with the illustrative example, then replace its inputs with your own assumptions. All money amounts are in USD. The result updates in this tab.
Illustrative result · assumptions apply
- Monthly occupancy cash
- $3,500.00
- Upfront premises cash
- $26,000.00
- Upfront cash plus 12 operating months
- $68,000.00
The deposit is tied-up cash, not automatically an expense. This view excludes any unentered escalation, tax, refund, financing or exit cost.
Complete your decision record
A comparable premises cost summary and a list of conditions to resolve before the next commitment. Enter the finding or number, the source and the next action for each row. “Supported” records your assessment of that item; it does not approve the business or certify completed research.
| Item and what to record | Your finding and evidence | Status and next action |
|---|---|---|
| Premises and scopeAddress, usable area, operating hours and intended activity | ||
| Recurring paymentsItem, amount, charging basis, escalation and exclusions | ||
| Upfront cashPayment, due date, refund terms and any concessions | ||
| Technical suitabilityUtilities, installation, access and work dependencies | ||
| Applicability and agreementOffice or adviser, question, response and scope | ||
| DecisionUnresolved condition, next commitment and responsible person |
6 items have no evidence recorded yet.
Entries are temporary and are not sent to us or saved automatically. Download your completed work before leaving or refreshing this page.
Choose your next action
| If your finding is… | Your next action |
|---|---|
| Material charges or required works are unknown | Obtain the scope and amount before treating offers as comparable. |
| The intended activity or installation is unresolved | Resolve suitability before a dependent equipment or premises commitment. |
| A lower-rent option consumes more opening cash | Compare the dated funding consequences and operating fit together. |
Errors that can change the result
- Comparing rent with different area or period definitions.
- Counting a deposit as immediately recoverable working cash.
- Assuming a previous occupant’s approval covers the new activity.
Apply this to your business
Choose the matching format and check its customer unit, paid team and evidence limits.
Restaurant
48-seat counter-service restaurant
Open the operating guide and state profiles →Coffee Shop
Independent coffee shop without a drive-through
Open the operating guide and state profiles →Hair Salon
Three-stylist employee salon with booked appointments
Open the operating guide and state profiles →Auto Detailing Business
Two-technician fixed-site detailing studio
Open the operating guide and state profiles →Use the directory to begin the address-specific applicability investigation. Values entered here are not automatically transferred to another calculator.
Continue with the next part of your plan
- How to compare equipment quotes and build the opening budget
A comparable two-quote cost calculation and a supplier commitment record.
- How to find the permits and approvals your business actually needs
An approval register with official responses and the next unresolved question.
- How to build a startup budget you can actually fund
A funding total, a dated payment ledger and a clear amount still to arrange.
Sources and limits
The sources below provide the stated background. The worked examples, calculator defaults and decision exercises are authored teaching material. They do not establish market prices, local demand, legal applicability or completed state research.
- SBA: launching a business
Location and approval routing background.
Source pages checked September 6, 2026. Research and review standards · Report an issue
When you need a longer financial plan
Use a financial model to organize a broader forecast after defining your own operating assumptions. The site’s research, your worksheet entries and the purchased workbook are separate; entries are not transferred automatically.
Financial models