shared commercial shop space?

L

Luke Sheridan

Joined
Oct 2, 2007
Messages
199
Light industrial space in town is rock bottom right now, we're talking 25 cents a square foot for fairly nice buildings, and maybe you can talk them down a bit from there. There is space available everywhere and a couple of my friends have been talking about getting a space together. We could end up with something around 2500-3500 square feet and a pretty complete wood and metal shop for around 250 bucks/month each. I'd get to work with guys who have a lot of experience in production and move out from my specialized 250 ft2 shop into a space where I could work on sheet material(totally impossible right now) and other larger projects. Plus I'd be able to totally organize my garage and shop at my house and my wife would love that.

Anyone ever do anything like that? Any pitfalls to watch out for? I was thinking we'd have to have some sort of agreements for the lease and an understanding about using each other's tools n consumables.
 
I say go for it, if you feel that you can keep up with the rent, and can get along with each other during rough times in the shop. 2500-3500 sq ft is enough in my opinion to share with up to 5 people easily.

One other pro is you would be to share expensive machinery.
 
Luke Sheridan said:
....and an understanding about using each other's tools n consumables.
Click to expand...

I have all my tools at my boss's shop. So far I have lost (meaning he can't seem to find them after he said he had saved them at some point) all the anvils for the english wheel I built ($400), untold mild steel round stock and square tubing. Visegrips a plenty. Welding gloves, squares, all the welding consumables that you can imagine. Oxygen, Acetylene, gold gas...the list goes on and on. I've lost close to a grand in nickel and dime stuff.

You'd better be damned sure that you have an incredible trust in these people. A written agreement won't get you back all the nickel and dime stuff unless you sue. A law suit will be hugely expensive. You better know what you are willing to lose and remain happy. That said, if you have your own spaces that can't be entered by others then maybe it's a good deal. Speaking from experience the old addage that "good fences make good neighbors" rings very true for me. Good luck.
 
Also be ready with a plan for what you're going to do when (not if) the rent raises once the lease is up.
 
All the above, plus ,when there are more than one persons involved, there will be the risk of the others left holding the bag when someone leaves. Sure, you should have a lease agreement contract with each other, but that won't pay the rent if one or more stops paying.....and like Endro said, suing each other won't solve the problem.

Also, commercial space doesn't come with free electricity
or free liability insurance ( usually required by the leasing agent)
or free utilities (water,trash,etc.)
or free business licenses ( unless you form a partnership or corporation, you may all need separate ones)
or free phones service
or free alarm service, fire inspections ( many cities charge an annual fee),etc.

These are higher priced for commercial space than for residential.
Figure that the $9000/year rent you are talking about will probably run closer to $15,000+/year .

As Dan said,too, the agents want tenants right now, sooner or later they will want to make a profit....which means that the rent will go up, or the building will get sold.

I have been in business for a long time, and can tell you that the rent is often the small part of the cost of business.

Now, I'm not talking you out of this... I just want you to have the full idea before you and two or three guys form up a partnership. Make a plan and see if it will work out. If you will be able to afford $500/mo. each, and can cover an extra $250/mo. if one of you drops out, then do it.

Final comments, working with others is more like marriage than friendship. You will not always agree. If you are sure you want to live with each other for a very long time ,it is a good arrangement. However, if there are things about one of you that will be a problem, it will be a disaster. Using each others tools is like trying to share a girlfriend, BTW.

I have a friend who had a partnership in a jewelry store. He used to compare it to a marriage. Both his marriage and his partnership eventually went sour. He often says that his marriage would have lasted if his wife had screwed him as much as his parter did.
Stacy
 
Hey Luke,

I agree with all the above...and then some. The marriage metaphor is an excellent one for business partnerships. Have you guys been "courting" :barf: for a while already and ready to get "in bed together"? :eek:

Consider that there will likely be four basic areas you'll all be called upon to "commingle" :foot: with.

  1. Finances: who is responsible for what, slush fund, etc. (It's a safe bet you each have different philosophies and methods when it comes to money.)
  2. Boundaries: between each other, your spaces, access hours, your stuff, utilities, phones, mail, each others family/friends/business associates/pets, etc.
  3. Division of labor & responsibilities: who does what, when and for how long? Stuff like: trash, writes the checks, cleaning, sweeping, toilet bowls and sinks, windows, repairs, etc.
  4. Process issues: admin meetings, decision making, how to settle differences, etc.
Well, these are just a few more ideas. Keep us posted as to your progress.

All the best, Phil
 
Although it is possible for a group this large to get along on the long term it would be hard. I would go for 2 or 3 and find a mutually acceptable method that you can produce something to pay for the overhead.

I just have to wonder with a group of this size about shared values. One guy keeps everything picked up and another gets thing strewed all over and everyone in between. One guy has a project that takes up a bunch of floor space and you find yourself working around it. etc etc.

It is possible if everyone is mature and responsible. You need to have some set rules and establish some kind of group meetings where any problems can be mutually addressed and taken care of. The idea is fine, but one or two bad apples can ruin it.
 
I think it's just a few guys Jim. I just mentioned all the peripheral people each of them will likely have around from time to time, thus an aspect of the boundaries they'll likely need to work out.
 
You must log in or register to reply here.
Back
Top