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Select a Location

Selecting your business location is a critical step in the success of your business. The key to the perfect location is to learn about zoning, building permits, and negotiating a commercial lease.
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When deciding on a location for your business, consider factors such as a central location relative to your market, transportation and parking availability, ease of access, etc. You might also want to consider any environmental factors (schools, community, cultural factors, or other businesses) that may benefit your business and help attract more customers.

Consider the quality of your potential site 5, 10, or 20 years from now and the cost of insurance associated with the area. Local regulations and zoning ordinances associated with your potential location are also important information.

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Use Location Demographics to Inform Your Business Location

If you've developed your business plan, you should have a good sense of who your target customers are, who is the most likely to purchase your products or services, and who you want to market to. Use this information to your advantage and consider how you can locate your business to most effectively serve your target customer base.

Consider factors such as age, ethnicity, gender, income, buying habits, occupations, and household composition. For instance, if your target customers are mothers with small children, you may want to think about neighborhoods that are family-friendly or areas that are located close to other family amenities.

There are several online tools that you can use to conduct a demographic analysis. PolicyMap and Living Atlas are all examples of free websites that aggregate demographic information and can help you research potential locations for your business. If you need assistance, many public library systems have reference librarians skilled at assisting small businesses to perform market research.

For more help finding a suitable location in your area, call us at 1-800-Jersey-7 or chat with us.

Prepare for Zoning before Identifying Your Business Location

Every municipality (City, Township, Borough, etc.) has a Land Use/Zoning Ordinance which regulates the kinds of business activities that are permitted within a designated zone and places restrictions on building on land parcels including building setbacks, building heights, signage, and various other aspects of the land usage.

When evaluating a location for your business you should consult with the Zoning Officer to determine the suitability of the site for your purposes and what obligations you will have, including possible Planning/Zoning or Landuse board approvals. You must do your due diligence and understand the zoning requirements/restrictions before signing a lease.  You should also be aware of the cost associated with receiving zoning approvals to avoid expenses for which you did not budget.

Generally, the easiest way to get set up is to find a location that was formerly the same type of business as yours. For instance, if you're opening a restaurant, you might try to find a space that used to be a restaurant. This usually means that the property already has the correct zoning and permits for your business, although you should always verify with the Municipal Zoning Officer to be sure.

Assess Any Environmental Concerns Before Selecting a Location

Some environmental factors could limit the development of your location. You can look at the environmental data for a site using the NJ GeoWeb tools from the Department of Environmental Protection.

Assess Former Industrial Site for Liabilities and Concerns before Selecting a Location

A business planning to buy land on a former industrial site should know what is above and below the ground. Any business thinking of buying another company’s operation must be willing to assume the liabilities for past improper handling of hazardous materials. The liabilities for cleanup and damages may be far greater than the value of the operation.

In addition, state and federal governments and the courts take an increasingly tough stance against those responsible for the existence of contamination, which can mean the difference between being considered innocent or being considered responsible for millions of dollars in damages and cleanup costs.

New Jersey’s ISRA is designed to ensure that sellers do not leave behind more than the buyer bargained for. Any New Jersey industrial operation subject to ISRA will be fully evaluated for contamination, above and below the ground. Under ISRA, any environmental contamination posing a risk to public health and the environment will be required to be identified and remediated by the seller.

New Jersey’s ISRA Program can be reached at 609-984-1351.

Prepare to Sign Your Lease

It is important to review lease contracts because of their impact on your business. Seek professional advice when you need help, and negotiate terms that are favorable to your business. Consider these before signing your lease:

  • Legal help: Hire a real estate professional, like a tenant representative. A tenant representative can assist with property searches, negotiations, and other services.
  • Lease duration and renewal: Determine the length of the lease and whether there are options for renewal. Consider your business's long-term goals and ensure the lease duration aligns with your plans.
  • Rent and other costs: Understand the rent amount, payment schedule, and any other costs or fees associated with the lease. Other costs could include maintenance, utilities, or property taxes. Be aware of any rent increases and how the landlord determines them.
  • Security deposit: Know the amount of the security deposit required and the conditions under which it can be withheld by the landlord. Understand the process for returning the deposit at the end of the lease term.
  • Tenant improvements: Know who handles repairs and maintenance and how to submit requests. Find out if you can make alterations or improvements to your space. Clarify any restrictions, approval processes, and cost coverage.
  • Subleasing and assignment: Check whether assigning the lease to another party is permitted. Understand the landlord's requirements and approval process.
  • Termination and default: Understand lease termination conditions and consequences for defaulting on terms. Pay attention to any required notice periods for termination or renewal.
  • Insurance requirements: Determine the insurance coverage required by the landlord. You may need general liability insurance or property insurance to follow their requirements.
  • Dispute resolution: Understand the dispute resolution process outlined in the lease agreement. It may include mediation, arbitration, or litigation. Understanding the procedure beforehand can help you navigate potential conflicts.
  • Legal compliance: Make sure your lease agreement follows federal, state, and local laws and regulations. This can include zoning requirements, accessibility standards, or building codes.

Understand common terms that may appear in your lease:

  • Rentable vs. usable square feet: Rentable space includes common areas. Usable space includes only the actual space within your suite.
  • Tenant electric fees: Office tenants usually have a standard tenant electric fee. Industrial or retail tenants may have separately metered utilities or a shared cost.
  • Holdover clause: This clause protects landlords by charging tenants who stay beyond their lease term.

Remember, lease contracts can impact your business. It is important to review them and seek professional advice when you need it.

Understand the Process of Acquiring Commercial Real Estate

Acquiring commercial real estate in New Jersey involves a series of steps that require careful planning, research, and professional assistance. Here's a general guide to help you through the process:

  • Define Your Objectives: Determine your investment goals and the type of commercial property you want to acquire (e.g., office space, retail, industrial, etc.). Clarifying your objectives will help you focus your search and decision-making.
  • Set a Budget: Establish a budget for your commercial property purchase. Consider not just the purchase price but also additional costs like closing expenses, due diligence, and potential renovations.
  • Obtain Financing: Secure financing for your purchase. This may involve approaching banks, commercial lenders, or private investors to get pre-approved for a loan or establish your funding capacity.
  • Assemble a Team of Professionals: Engage key professionals to guide you through the acquisition process, including a commercial real estate broker, a real estate attorney, and potentially a property inspector and appraiser.
  • Search for Properties: Work closely with your commercial real estate broker to identify properties that meet your criteria. Your broker will provide you with property listings, arrange property tours, and help you assess their potential.
  • Conduct Due Diligence: Once you've identified a potential property, perform thorough due diligence. This involves inspecting the property, reviewing financial documents, checking zoning and permits, and verifying the property's legal status.
  • Negotiate the Purchase: Negotiate the terms of the purchase with the seller, including the price, closing date, contingencies, and any other relevant terms. Your real estate attorney can assist with contract negotiations.
  • Sign a Purchase Agreement: Once both parties agree on the terms, sign a formal Purchase Agreement or Sales Contract. This legally binds both parties to the agreed-upon terms and sets the stage for the closing.
  • Complete Financing and Contingencies: Finalize your financing arrangements and work through any contingencies outlined in the purchase agreement, such as obtaining necessary permits or approvals.
  • Conduct Title Search and Obtain Title Insurance: A title search is conducted to ensure there are no outstanding liens or ownership issues with the property. Title insurance is typically obtained to protect against any unforeseen title problems.
  • Closing: At the closing, all necessary documents are signed, and the funds are transferred. The property ownership officially changes hands, and you become the new owner.
  • Post-Closing: After the closing, you'll need to handle tasks such as transferring utilities, updating leases if applicable, and managing the property or finding tenants if it's an income-generating property.

Remember the process of acquiring commercial real estate can be complex, and regulations may vary depending on the location and property type. It's crucial to seek guidance from experienced professionals throughout the entire process to ensure a successful acquisition.

Determine If You Can Be a Home-Based Business

Planning to work out of your home? Home-based businesses are some of the simplest businesses to set up in New Jersey. However, there are a few things to keep in mind to make sure your business activities are allowed by your local government, aren't disrupting your neighbors and your location is safe for your clients.

Here are a few places to look to confirm you can be a home-based business:

  1. Local planning offices may have zoning regulations that can affect the type of businesses you can run from home. Zoning regulations dictate acceptable methods of land use for real property inside specified districts. Speak to your local office to understand if your business is allowed in your home or building. 
  2. Certain industries maintain strict rules about running businesses out of residences. For example, cottage food operations are allowed to be home-based businesses in the State, but with certain restrictions about the type of food allowed. Learn about the food restrictions applied to cottage industries at the New Jersey Department of Health.
  3. Check with your local homeowners association, co-op, or other neighborhood communities for any by-laws about running a business in your residence. Your homeowner’s or renter’s insurance policy may not cover any business operations occurring in your home.