First Commercial Lease at $43K/yr—Too Risky with $10K/Month Revenue?

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SpartanEddy7

New Member
Hey guys,

I'm at a huge turning point where I'm thinking of leasing a warehouse for my business. I started not long ago, but I want to scale up and feel like I truly own the operation. I’m not advertising here, just for context—it's packaged food, and I already have a solid following with blue-collar workers and gyms. I'm also working on breaking into the health food market.

First question: I have about 100k in cash and no property. I currently make 10k/month after tax, and the warehouse I'm looking at is around 43k a year before GST and outgoings.

Question: I'm pretty nervous! This is my first time renting commercial space, and I don't know all the steps. Say I go belly up in six months—how easy is it to find someone else to take over the lease?

Current sales are about $1300 a month with a 40% profit margin, but I'm not paying myself yet. I've only been running for a month and have just two releases.

Do you think this is the right move?

So far, everyone’s giving me great reviews, and I have repeat customers. I'm just worried about how it's all going to turn out. I've got a trademarked name, a great website, and I've done everything myself.

What would you do?
 
Okay, so this might not be the most helpful advice, but honestly, I've just always operated with the idea of giving the business what it really needs. And for whatever reason, debt has always lit a fire under me
 
A month in.
Not enough sales.
Leasing now? Feels like jumping off a cliff without checking if there's a net.
Just can't do it.
 
Mate, with commercial leases, they make you sign a bank guarantee for a set amount so if you break the lease or they incur a loss, they just take it. You don’t have to worry about finding someone else to fill or take over the lease.

Honestly, I’d say this feels like you’re SUPER early with this. I understand your want to grow and need for space, but you need to be in a position where the business is paying you a wage regardless of what it is and you know this is actually a goer. Personally, I’d want to see six months of growing orders as an initial idea.

Alternatively, if you have the business plan dialed and could sell the dream to a cash investor, you could have your cake and eat it too but be prepared to take at least a 50% haircut on equity.
 
You know, you could actually sublease a kitchen that's already up and running during nights or weekends, and it’s super affordable. I’ve seen it a lot honestly, it’s way more common than people think.
 
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