Signing a commercial lease is one of the biggest financial commitments you'll make as a business owner. Unlike a residential tenancy, commercial leases in the UK offer far fewer protections — and the costs of getting it wrong can follow you for years.

Here are five things you should check before you put pen to paper.

1. The break clause (or lack of one)

A break clause lets you end the lease early — typically at year 3 or 5 of a longer lease. Without one, you're locked in for the full term, even if the business fails. This is the single most important clause in your lease.

What to look for: Make sure the break clause is mutual (not just the landlord's option) and check the conditions — some require 6 months' notice, or that all rent is paid up, or that the property is in its original condition. Miss any of these and the break clause becomes worthless.

2. The rent review mechanism

Most commercial leases include a rent review — typically every 3 or 5 years. The key question is: which direction can it go?

An "upward-only" rent review means your rent can increase but never decrease, even if the market drops. This is still common in UK commercial leases and it's worth negotiating hard on. If you can get an "open market" review instead, you'll have more flexibility if trading conditions change.

3. Service charges and hidden costs

The headline rent isn't the full picture. You may also be liable for service charges (maintenance, cleaning, security), insurance premiums, business rates, and a share of communal repairs. In some buildings, these can add 30–50% on top of your base rent.

Ask for a full service charge breakdown for the last three years. If the landlord can't or won't provide one, that's a red flag.

4. Permitted use and alterations

Your lease will specify what you can use the premises for. If it says "A1 retail" and you want to run a café (A3), you'll need both the landlord's consent and potentially a change-of-use application to the council. Don't assume this will be straightforward.

Similarly, check what alterations you're allowed to make. Most leases require landlord consent for structural changes, but some restrict even non-structural work like partitions or signage.

5. Dilapidations and end-of-lease obligations

When your lease ends, you're usually required to return the property to its original condition. This is called a "dilapidations" claim, and the bill can be eye-watering — sometimes tens of thousands of pounds for a modest unit.

Before you sign: commission a schedule of condition (photographs and notes documenting the current state). This protects you from being charged for issues that existed before you moved in.

Location is the one thing you can't change once you've signed. Your coffee can be world-class, your branding perfect, your service impeccable — but if the unit is on the wrong street, none of it matters enough.

Here's what actually drives a café's success by location, based on data and the experience of hundreds of UK operators.

Footfall is the foundation — but not all footfall is equal

A busy street is good. But the type of footfall matters more than the volume. Commuters moving quickly past your door at 8am are different from residents browsing at 11am. Tourist footfall is different from local repeat custom.

For a café, you want a mix: morning commuters for the grab-and-go trade, and then a second wave of locals, remote workers, and parents mid-morning. If the street dies after 9am, your revenue ceiling is low no matter how many people walk past at rush hour.

The 200-metre rule

Look at what's within a 200-metre radius of your unit. Are there offices (good — daytime demand)? Residential streets (good — weekend and evening)? Other cafés (not necessarily bad — it can signal demand, but you need a clear differentiator)?

The best café locations tend to have a blend of daytime workers, nearby residents, and some passing trade. If your catchment is heavily skewed to one group, you're vulnerable to changes in their behaviour.

Rent-to-revenue: the number that matters most

As a rough benchmark, your rent should be no more than 8–12% of your expected annual revenue. If a unit costs £2,000/month (£24,000/year), you need to be confident of turning over at least £200,000 to make it work comfortably.

This is where many first-time café owners get caught out. They fall in love with a unit, work backwards from the rent to justify the revenue, and end up squeezed from day one.

Don't ignore the unsexy stuff

Extraction: If the unit doesn't have extraction (for cooking smells and steam), installing it can cost £5,000–15,000 and may require planning permission. Check before you fall in love with the space.

Water pressure and drainage: A café goes through enormous amounts of water. Low pressure or poor drainage will cause daily operational headaches.

Waste collection: Where do the bins go? Is there rear access? In some areas, commercial waste collection costs £200+/month and there's nowhere to store bins between collections.

There's a version of "starting a business" that exists in blog posts and Instagram reels. It's aspirational, tidy, and full of phrases like "follow your passion" and "be your own boss." Then there's what actually happens.

This article is about the second version.

You will underestimate costs. Everyone does.

Whatever budget you've set aside, add 30%. Not because you're bad at planning — because there are costs you literally cannot foresee until you're in the middle of them. A faulty extractor fan. A solicitor's bill for a lease review. A stock delivery that arrives damaged. Business rates that are higher than the listing suggested.

The businesses that survive the first year are rarely the ones with the best product. They're the ones with enough cash to absorb the surprises.

The loneliness is real

If you're leaving a job to start a business, you're also leaving a social structure. No more colleagues, no more lunch breaks, no more shared complaints. For the first few months, it's just you, your to-do list, and a low-level hum of anxiety.

This isn't a reason not to do it. But it's worth being honest about, and worth planning for — whether that's a co-working day, a founders' group, or just a standing Wednesday coffee with someone who gets it.

Revenue is not profit

Your first month might hit £8,000 in revenue and you'll feel great. Then you'll subtract rent, stock, staff, utilities, insurance, waste collection, card processing fees, and accountancy — and realise you've taken home less than minimum wage.

This is normal. Most businesses take 12–18 months to become meaningfully profitable. But you need to plan for that gap, not be surprised by it.

Decision fatigue is the hidden enemy

In a normal job, most decisions are made for you or shared with others. When you start a business, every single decision lands on your desk — from what colour to paint the walls to whether your insurance excess should be £250 or £500.

This accumulates. By month two, you'll find yourself paralysed by a choice between two identical suppliers. It's not because the decision matters — it's because your decision-making capacity is exhausted.

You don't need to know everything on day one

The most common mistake isn't choosing the wrong paint colour or the wrong accountant. It's waiting too long to start because you feel like you need to have every answer first. You don't. You need a viable location, enough cash to survive 6 months of learning, and the willingness to adjust as you go.

We spoke to dozens of UK business owners about what they wish they'd known before opening. These are the lessons that came up again and again — not theory, but lived experience.

1. Your first three months are not representative

Month one might be brilliant (friends, family, novelty-seekers) or terrible (still finding your feet, no reviews yet). Either way, it's not a reliable indicator. Most businesses hit a meaningful rhythm around month four or five. Don't make big decisions based on your first 12 weeks.

2. Staff costs will surprise you

It's not just wages. It's employer's NI, pension contributions, holiday cover, sick pay, training time, and the sheer cost of recruitment when someone leaves after three months. Budget for staff costs at 130–140% of the headline salary.

3. Weekday revenue is the real test

Weekends often take care of themselves. The businesses that thrive are the ones that crack the Tuesday-to-Thursday problem. That means building habits: loyalty schemes, weekday offers, regular events, or simply becoming the place people come to by default.

4. Your competitors are not your enemy

The café three doors down isn't trying to destroy you. In most cases, similar businesses in the same area create a destination effect — people come to the area because there's a cluster of good options. The real competition is apathy: people staying home, ordering delivery, or choosing a different area entirely.

5. Cash flow, not profit, is what kills businesses

You can be profitable on paper and still run out of money. A delayed invoice, an unexpected repair, or a slow month after Christmas can leave you unable to pay rent. Keep a rolling 8-week cash flow forecast and never let your buffer drop below one month's fixed costs.

6. You'll change your mind about your target customer

Most business plans describe a target customer. Most reality disagrees. The yoga studio that planned for young professionals ends up serving retired locals. The coffee shop targeting remote workers discovers its best customers are parents with prams. Stay flexible and follow the actual demand, not the demand you imagined.

7. The location decision echoes for years

Of all the decisions you'll make, location is the hardest to undo. You can rebrand, change suppliers, adjust your menu, hire new staff — but you can't move the building. Getting location right (or at least not catastrophically wrong) is the single most valuable thing you can do before you start.

A commercial property viewing is not like a house viewing. You're not looking for "character" or "potential" — you're looking for evidence that this unit can support a profitable business. Here's what to check.

Before you arrive

Visit the street at different times. Walk past on a Tuesday morning, a Friday evening, and a Saturday afternoon. How busy is it? What's open? Where do people walk — your side of the street or the other? The view from inside the unit is less important than the view from 50 metres away.

Outside the unit

Frontage width. A narrow unit on a busy street can be invisible. Measure the frontage and think about signage options. Can you get a projecting sign? Is there space for an A-board?

Neighbouring units. What's either side of you? A bookmaker's and a vape shop create a different impression to a florist and a bakery. Your neighbours affect your customers' perception before they even look at your business.

Inside the unit

Electrics and water. Check the fuse board — is it modern? Is there three-phase power (you'll need it for commercial ovens and some espresso machines)? Test the water pressure. Look for damp, especially at the base of walls and around windows.

Floor condition. Lifting carpet or lino can reveal problems — uneven concrete, old tile adhesive, or worse. If you're planning a specific flooring finish, check what's underneath.

Ceiling height. Low ceilings can make a space feel cramped and limit your fit-out options. Anything under 2.7m will feel tight for a café or restaurant.

Questions to ask the agent

About the lease

How long is the term? Is there a break clause? What's the rent review mechanism? What's the service charge history? Are there any restrictions on use or alterations?

About the history

What was the previous tenant's business? How long were they here? Why did they leave? If three cafés have failed in this unit in five years, that's information you need — and the agent isn't obligated to volunteer it.

About the building

Who else is in the building? What are the communal responsibilities? Is there a managing agent? When was the roof last inspected?

Footfall is one of the most commonly cited metrics in commercial property. But it's also one of the most misunderstood. Here's what it actually tells you — and what it doesn't.

What footfall measures

Footfall counts the number of people passing a point in a given time period. It's usually measured by sensors on lampposts or in shop doorways, and reported as daily or weekly averages. High footfall means lots of people walk past. That's it.

It doesn't tell you who those people are, whether they're spending money, how fast they're moving, or whether they'd ever consider walking into your business.

Why high footfall doesn't always mean high revenue

A unit next to a train station might see 10,000 people per day. But if 95% of them are commuters walking with headphones at 8am, your café might convert fewer customers than a quieter street where 500 people per day are browsing, shopping, and looking for somewhere to sit.

Conversion rate matters more than volume. A quiet street with high intent can outperform a busy street with low intent.

Where to find footfall data

Local councils and Business Improvement Districts (BIDs) sometimes publish footfall data. Companies like Springboard and ShopperTrak provide commercial data, though it's typically expensive. Some agents will share footfall figures as part of their marketing — but be cautious about data that's presented without context.

What to look at instead (or as well)

Dwell time: Are people lingering in the area or passing through? Areas with benches, public spaces, and multiple retail options tend to have higher dwell time — and higher conversion.

Time-of-day patterns: Footfall at 8am is different from footfall at 2pm. If your business relies on lunchtime or evening trade, morning footfall data is irrelevant.

Competitor presence: If there are already three successful cafés on the street, that's a better signal of viable demand than any footfall counter.

You've found a unit you like. The agent says the rent is £2,200 per month. Is that good? Is it too much? How would you even know?

Here's how to work it out.

The rent-to-revenue rule

The most practical benchmark is the ratio of rent to expected revenue. For most retail and hospitality businesses, you want rent to be no more than 8–12% of annual turnover. A café paying £2,000/month needs to be confident of at least £200,000/year in revenue to be comfortable.

If rent creeps above 15% of revenue, you're in a danger zone — one bad month and the maths stops working.

How to find comparable rents

Rightmove Commercial and Zoopla Commercial list available properties with asking rents. Search for similar-sized units in the same area to get a feel for the going rate. Remember that asking rent is often negotiable — particularly if the unit has been empty for a while.

VOA (Valuation Office Agency) ratings list shows the rateable value of commercial properties, which gives you an independent benchmark. It's not the same as market rent, but it's useful for comparison.

Local agents: A good commercial agent will know the area and can tell you whether a rent is above, below, or in line with the market. If you're not using an agent, at least get an informal opinion.

When to negotiate

You have more leverage than you think, especially if the unit has been vacant for more than 3 months, if you're willing to sign a longer lease, if you're an established business (not a startup), or if the landlord has multiple vacancies in the same building.

Common negotiation tactics include asking for a rent-free period (1–3 months is normal for a new fit-out), a stepped rent (lower in year one, rising to full rate in year two), or a cap on the first rent review.

Your first location is working. Revenue is steady, customers are coming back, and you're starting to think: "What if I did this somewhere else?" It's a natural thought — and a dangerous one if the timing is wrong.

Signs you're ready

Your first location runs without you. If you can't leave your current business for a week without it falling apart, you're not ready. A second location doesn't halve your workload — it doubles it. You need a team and systems that function independently.

You have cash reserves, not just cash flow. Opening a second location requires capital — typically 40–60% of what you spent on the first, even if you've learned to be more efficient. If you'd need to borrow everything, think carefully.

You understand why your first location works. Is it the product, the team, the location, or the combination? If you can't articulate what's driving your success, you can't replicate it.

Signs you're not ready

You're bored. Boredom is not a business case. If your first location still has room to grow — better marketing, longer hours, additional services — grow it first. It's cheaper and lower risk.

You're escaping a problem. A second location won't fix staffing issues, margin pressure, or management challenges at location one. It will multiply them.

An opportunity just "came up." Opportunistic expansion is the most common cause of second-location failure. A great unit at a low rent is only great if the area, timing, and your capacity all align.

The checklist before you commit

Before signing anything for a second location, make sure you can answer "yes" to all of these:

Can location one run profitably without me for 3 months? Do I have 6 months of operating costs for both locations in reserve? Have I tested the new area's demand with data, not just instinct? Is my team strong enough to split across two sites? Have I stress-tested the worst case — what if location two takes 12 months to become profitable?