Having trouble paying my rent - what can I do?
Several partners have asked questions around how to deal with problems to pay office rent.
As the revenue is lower than expected due to the ongoing pandemic, we see that businesses in general face problems paying office rent.
My advice is to open and transparent with your landlord. Reach out to your landlord well before your rent is due and explain your situation, be open to invite him to take a look at your cashflow situation. Every landlord likes someone that is transparent and that reaches out well before the due date. It is worse if you just hide and don't communicate, the worst is if you lie and say 'the check is in the mail'...
Depending on your situation, there are a few things to talk about with your landlord;
- First thing is of course to negotiate a deal where you are allowed to pay later. If you're supposed to pay quarterly, you will most likely be allowed to pay monthly instead. An even better solution is if your landlord will allow you to pay the rent for Q2 by the end of December 2020 on the condition that Q3 and Q4 are paid in time.
- When this pandemic is over, your business might have changed and perhaps your company will be much smaller, or you have got used to have a large portion of your staff working from home. In both scenarios you might need less office space and the sooner you reduce your square feet, the sooner you will reduce your rental costs. I suggest that you start this discussion early as you can hoepfully expand later if needed.
You can also consider sharing your office space with another company and perhaps this can be the start of a great partnership and that can also allow you to share administrative resources which will help you to reduce cost.
Hope this helps!