Saturday, September 29, 2012

Looking for and finding a commercial place to rent in China (1)

In order to establish a business in China you should find a commercial space to rent.
This is a crucial step.

A few advises when you look for a place :

  • the place should match your project

It determines your customers: buying power, age, customer profile, consumption
A few examples:
- Next to universities: young customers who can have important revenues (one child policies and studies are expensive), foreigners, love partners…
- City center for a few district: one time customer, less customer loyalty, customers looking for famous brands and to spend money
- Next to a parc, museum: families, customers on week-ends...
- Night club districts : customers in the evening from 9pm

  • The rent is your business main cost

You always should think about the monthly rend (together with salaries, taxes, water, accountant…) 
The rental cost is complex :
- a few owners will ask for more garanties, a larger deposit
- Each year, the rent can be reevaluated. This is written on the bail. You should be very cautious: how will the bail be reevaluated?
- In a residence, you should pay for the team and many costs
- The rent can vary a lot from one street to the next, from one building to the next in the same street.

  • Duration of the rent

It is important to rent for a sufficient duration.
Your rent is getting to an end and your business works well, then the owner might refuse to renta gain. Or he could increase the rent a lot in order to get back the place and your business… 

  • Keeping good relations with the owner

In China you can not rely on the law. It is therefore better to anticipate and avoid trouble.
If you don’t have a good feeling with the owner : don’t sign and find someone else, no matter the condition, price...
In fact a dishonest owner could always annoy you : ask a raise in the rent, contest the rent etc.
Don’t hesitate to make small presents, keep good relations with the owner. He will give it back as you should behave like this in China. 

  • Other points : visibility, passage, access, old location, work to realize, equipment etc.

I will let you know about our search in other posts. 

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