Lease: time to cut costs?

During the business planning cycle, often the occupancy costs of leases are identified as excessive, needing to be reduced to maintain financial sustainability. A cost saving review will succeed best if there is a systematic approach and hard decisions able to be made.

Each location and lease agreement needs to be assessed to identify occupancy cost savings that can realistically be realised. In some cases, it may be necessary to spend money to save money. These proposed savings need to be tested with the operating units; to work out the impact on the business and the actions required must be meticulously planned.

Many of the cost saving strategies may require new or revised lease agreements to be negotiated with existing landlords – not an exercise for the faint-hearted.

COST SAVING STRATEGIES

Lease cost saving strategies will likely