After completing his Certificate IV in Fitness, Matt would like to set up his personal training business. Matt would like to operate out of a studio and is looking at a vacant warehouse that was previously used as a gym. The warehouse is fully equipped with all the equipment and resources that Matt requires. He will need to employ one full-time staff member and two part-time personal trainers.
From the list below, identify the advantages for Matt if he decides to lease the premises for his fitness studio. Any remaining items will be disadvantages.
a) The tenant may not responsible for property tax, fire insurance, maintenance, and repairs.
b) Because you are subject to a lease, you are also subject to variations in rent, including increases. This is despite how well your business is doing.
c) No capital is required.
d) You do not have an investment in the property.
e) If the premises become unsuitable, they can be abandoned on expiry of the lease, with no further commitment.
f) The landlord may decide to sell the premises. As a result, you may be forced to move your business elsewhere. Disruption and loss of customer base may ensue.
g) If the business closes the tenant may be able to sublet, so the financial loss is minimised.