How Much Rent Should I Pay for a Business?

Rent is a tricky issue when it comes to business.

Location Can Mean Everything.

Businesses located in the city cost more in rent.

How much one should pay in rent for a business depends on the business itself. For many businesses "location can mean the difference between feast or famine," according to Nolo.com. If a location is critical to a business, in the case of a restaurant, for example, rent will be more expensive--especially in high foot traffic areas.

It Depends on the Business.

Wholesale businesses can often save on rent.

Rent can be high for any business, but it depends on the business itself. When it comes to "roofers, plumbers and Internet-based businesses," explains Nolo.com, "location is almost irrelevant." Indeed, "picking a low-cost spot in an out-of-the-way area might be an advantage" to saving on rent.

Bottom Line

Renting business space in a popular area can be worth the cost.

How much rent one should pay for a business depends on what the business owner can afford. "Businesses that have little contact with the public," states Nolo.com, can save on rent. Nevertheless, when creating a business plan, estimate how much rent you can afford to pay against "projected revenues and other expenses."

References

• Building a Business