The famous line from the movie Jerry Maguire, Show Me The Money, really sums up one of the most important things landlords evaluate before going down the road to leasing a space to tenants. More often than not, landlords are going to want to evaluate a prospective tenant’s finances before leasing them space. Similar to a bank, the landlord wants and needs to know if a prospect has enough money to open their future business.

If you have ever filled out a financial statement for a bank, this should be enough for many landlords including Multi-Billion Dollar Real Estate Investment Trusts that act as landlords. If you have never filled out a financial statement or do not remember the last time you did it, click here.

Rarely do I get the chance to review a really well completed financial statement, but hopefully that will change as more people read this blog and learn the DO’s and DON’Ts of leasing retail space. Do your best to fill out the form completely and most importantly, show that you have some money in the bank. A landlord is not likely to accept a prospect that wants to open a full service restaurant, but only shows that they have USD $5,000. This is NOT enough money to even get the drywall installed by a licensed contractor. It is in your best interest to inspire confidence in the landlord, so show her that you have the required resources to open your business. A GREAT supplement to a financial statement is a business plan and I highly recommend submitting one at the same time. This shows that you are organized and have thought through everything before signing contracts and spending money.

haz-general-warning.gifI think it is important that I warn people who are just starting out on their path to leasing a space or starting a new retail business of a mistake I see some people make when it comes to submitting a financial statement – they don’t have one. People that want to hide their financials, say they will give the information later on in the process, claim they have plenty of money yet are holding back, or just too clever for their own good will NOT be leasing space in any center I handle and probably not in most centers. If you have never owned a retail business and you want to inspire the confidence of a stranger controlling a million dollar asset, you better be prepared to put your cards on the table and show the money. How is the landlord supposed to get an idea of who you are and your funding if you do not disclose the most important part of the pre-screening process. I have never made a deal with someone who resisted supplying their financials and I probably never will.

The best thing you can do is be organized, do a very thorough job of completing the financial statement and provide supplementing documents to inspire confidence that you are on your way to launching a winning business.