We interviewed Unleased co-founder, Jacqui Storey, to unpack her first experiences of leasing a warehouse, which subsequently led her into the world of sub-leasing.
What was the biggest mistake you made when you first decided to sub-lease your warehouse space?
Jacqui: The biggest mistake happened at the very beginning. As an ambitious business founder, I took on a warehouse that was simply too big for my business needs. I had this empty space and had to find a way to cover the cost – ASAP! That’s what pushed me into sub-leasing — it was a solution to the tricky problem I had fallen into.
Looking back, I would have spent more time looking for a sub-lease arrangement rather than being a head tenant on a warehouse that was simply too big.
Was there a point where sub-leasing became more stressful than profitable?
Jacqui: At the best of times, once I had my first sub-tenant in the warehouse and things were going well — it was a Godsend to have extra monthly income. But when my first sub-tenant moved out, I spent so many weekends touring people through my warehouse and had to manage a lot of Facebook Marketplace tyre-kickers that weren’t actually ready to sign up to a monthly sub-lease.
It took a huge amount of time away from operating my business, my business suffered as well as my family life. By the time you’re stressed and desperately looking for tenants, you’ve already left it too late.
Tell me about a hard lesson you learned when choosing sub-tenants.
Jacqui: In the beginning, if someone seemed enthusiastic and said they wanted space, that was enough. I learned the hard way that not everyone is financially reliable. My second sub-tenant struggled with huge seasonal fluctuations and was three months late with rent at one stage, which then affected my cashflow.
Suddenly I was spending time chasing rent, which affected my enjoyment of having a sub-tenant. It made the relationship pretty tense and not fun.
What impact did these challenges have outside of work?
Jacqui: The impact on my family was probably the hardest part. When you’re worried about covering a big warehouse lease, dealing with unpaid rent, and spending weekends showing people around, it doesn’t stay at work. The stress follows you home. I don’t think founders talk enough about how stressful it can be to start and operate a new business.
What’s the biggest misconception businesses have when they come looking for warehouse space?
Jacqui: A lot of business owners think they’re ready because they’ve had some early sales or momentum. But you really need a solid run of ongoing, predictable revenue. We’ve seen businesses get excited about taking space and then baulk at the monthly bill once the reality sets in.
One of the biggest lessons we’ve learned is that growth needs to be sustainable before you commit to a fixed cost like warehouse space.
“By the time you’re stressed and desperately looking for tenants, you’ve already left it too late.”
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