Managing occupancy costs can be a challenge for some corporate tenants. However, determining an effective strategy for minimizing these costs can have a huge impact on the bottom line. These are not predetermined only by market rental values, or whether there is simply enough space for the number of employees. Instead, begin by taking a look at the three main cost factors: Location, Layout and Lease.
Location
No one can deny the huge importance of finding a location which is both cost effective and suitable for the needs of your particular operation. Additionally, consider the fact that your location may also influence the type and cost of labor you are able to find. Obviously, the landlord will be looking to charge as high a rent as the market will bear.
Layout
The next major contributor to your occupancy costs is the efficiency of your warehouse space, and what it will cost to build it out. Think about how to effectively use not only the actual floor space, but also the overhead areas. Think about how to use racking and multi-level order picking concepts in your space. If you are looking at a new warehouse space, then it is vitally important to maintain control over the design and construction process costs.
Lease
The goal of every lease should be to structure a deal which will compliment your objectives. With the higher vacancy rates of today, many landlords and commercial warehouse owners are more willing than ever before to be flexible with their terms. You need to actually determine an effective negotiation strategy beforehand. Great deals are usually not just found; they take effective planning, work and negotiation.
By keeping these factors in mind, it is not only possible to control, but also reduce your warehouse occupancy costs. Moreover, this can be achieved with minimal interruption to your business. You will be amazed at how these three simple ideas will improve your bottom line once they are properly implemented with a committed strategy.
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