An interesting read today in The New York Times, in “Nothing is Set in Stone, So Renegotiate:”
“Maybe your fixed costs are not as fixed you think.
With the recession continuing in full force, you may find that everyone — from the company that supplies your office with water to your neighborhood banker — is willing to renegotiate their existing arrangements with you to keep your business.
Closely analyze every contract you have and look for places where you think you can get a cost reduction. Then ask for better terms.”
The article provides several ideas along with additional web resources to help you prepare for discussions with landlords and others with whom you have a financial relationship or partnership. One specific area, negotiating to get lower rent, is especially timely:
“Tenants frequently have the upper hand in a renegotiation scenario,” write the people at Gaebler.com, a business incubator and holding company. “Unless the local commercial real estate market is red hot, landlords are hesitant to risk incurring an extended vacancy period by allowing the space to turn over.”
You can certainly ask for an immediate rent reduction, citing the tough economic conditions you face. The landlord is going to be more willing to grant it, however, if you agree to extend your lease at the new, lower terms.
“The best time to renegotiate a lease is six months to a year before your current lease expires. If the renegotiation fails, you will at least have enough time to properly consider alternative locations.”
As the author says - it may look and sound simple, but renegotiation of financial matters is rarely easy. Just sometimes necessary.
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