Solutions > Case Studies > Negotiation

‘Cash is king’……..

The bank manger said that the business plan was one of the best he’d seen. Not surprising as the author had more business degrees than we’d ever seen.

Whilst the cash–flow was projected to be a little tight for a few months, he had secured some ‘comfort funding’ for those first few months of business if it became necessary. What hadn’t been factored in were all the additional costs of his lease (quarterly rather than monthly payments, deposit, maintenance, SDL tax…), making the additional funding a necessity rather than a ‘comfort.’ He didn’t want to go back for more funding before he’d even started but also didn’t want to bury his head in the sand over the budget over-runs.

We proposed different cost models and strategies and whilst the landlord would eventually only agree to a short Rent Free period he was prepared to accept a sliding scale of rental payments giving our client his ‘comfort funding’ back.

“It’s our standard lease…”

We wish we received a pound for every time we’ve heard that. At Cirrus the definition of ‘standard’ is ‘starting point’ not ‘non- negotiable’.

Our client wanted us to deal with renewing his 20 year old lease. The comment we first received from the landlord was ‘Why wasn’t the standard lease, that he’d had for the last 20 years good enough for him now’. Actually the lease terms were more fairly balanced between the landlords and tenants rights than a lot we see.

The difference was our client was a sole practitioner, planning to retire in four years time and had had a cancer scare the previous year.

So we agreed the key terms in the new lease were the assignment provisions (for ease of selling the business) and the inclusion of a Death and Disability clause. This set him up to sell the business and retire, or if his health deteriorated his wife would not be burdened with the lease.