Negotiating the sharing of outdoor space
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With more small businesses reopening across Victoria, working out how to maximise your outdoor space will help to create a safe environment while allowing you to capitalise on new opportunities for trade.
In your business precinct, there might be scope for you to use a footpath or outdoor space that falls in front of other businesses. Working with these business owners to create a fair agreement on how the space will be used is the best way to avoid running into problems. It also helps to make sure you all attract – and benefit from – the hike in foot traffic that comes with eased restrictions.
Top tips on how to negotiate
Before talking to your neighbouring business owners:
- check your lease so you know the boundaries of your premises
- talk to your local council’s economic development team about what the processes are in your local area for using space that falls outside of these boundaries
- make a clear plan for how you would like to use the space surrounding your business, remembering to be open and flexible (what you propose might need adjusting to work for the other businesses).
What to keep front of mind when negotiating:
- Communication is key, so when working with the business owners to reach an agreement, clear and open communication is the best way to start.
- Avoid assuming the outcome. There might be a way to use the space that seems obvious to you but isn’t workable for one of the other businesses. Before you move ahead with planning how you will use their outdoor space, it’s really important to consult with them to understand their needs and interests.
- Stay curious. The business owners might have valid reasons for not wanting to share their footpath – be it concerns about poor visibility or may be parking.
- Find solutions. If your plan involves a parklet, neighbouring business owners might have issues with carparking spaces being removed. Your local council might be able to give you data on the availability of parking spaces in the area across the day so you can ease their concerns. If they’re worried about visibility, think about ways you can make sure their signage and offerings can be seen and accessed.
- Give incentives. It can help to offer neighbouring businesses incentives to get them over the line. Think about what makes your business a unique drawcard for local trade and visitors to the area and how a cross promotion might result in a shared benefit. If you have a loyal following on social media, could you offer to promote the other businesses on your accounts? Could you offer a free meal or coffee with every purchase of a particular service or product of the other businesses?
Making an agreement
It’s really important to document your agreement in writing. Check in with your local council economic development team as they will most likely have a standard form agreement. Make sure it includes:
- timeframes – including how long you both agree that the arrangement will last
- any conditions or incentives that you have agreed to.
Case study: Nicholson Street Mall
As restrictions to trade eased, businesses in Footscray’s Nicholson Street Mall were keen to maximise their use of outdoor space in a way that would result in everyone benefitting. They worked together to share the space, with bar and bottle shop Mr West allowing customers to enjoy a takeaway meal from one of the neighbouring businesses while having a drink at their tables. By collaborating with other businesses, more customers were drawn to the area and wanted to stay for longer.
“Being a bar that has a capacity of 300 across two levels, the restrictions drastically impacted our business – at some points we were only allowed to have 20 people inside. Our bar is designed and set up to cater for 300 people so any less than 100 really wasn’t viable for us.
“Having the opportunity to trade outdoors had an enormous positive effect on our ability to stay financially on track and get the best use out of our space given the circumstances. It is most likely the reason that we are still open today.”
– Josh Hodges, Owner of Mr West, Nicholson Street Mall, Footscray
What to do if you can’t agree and find yourself in a dispute
If you and your neighbouring businesses have tried to work out a plan for sharing the outdoor space and can’t reach a fair agreement, we recommend taking the following steps:
- Collect all relevant documents and details of the dispute. This could include dates and times of discussions, any plans for sharing the outdoor space, details about the product or service incentives that were agreed to, your lease, photos and any written agreements reached.
- Highlight what is relevant to the dispute. Is it that the business owner isn’t honouring the agreement or isn’t hearing your concerns about the current arrangements?
- Contact the business owner, explain the problem and make practical suggestions for solving it.
- Listen to what they say and put yourself in their shoes. Try to see where they’re coming from, even if it’s hard to do.
- Make a list of possible outcomes you would like to see.
- Keep communication about the dispute in writing.
- If you still can’t agree, apply to the Victorian Small Business Commission for help to resolve the dispute, using the small business dispute application form. Make sure you include all documentation of the attempts you have made to resolve the matter.
- Collaborating to increase foot traffic works to everyone’s advantage.
- There are a lot of ways your business can give incentives to your neighbouring businesses in exchange for their space.
- Make sure to get any agreement in writing and if you’re not sure of anything, contact your local council economic development team for guidance.
- If you find yourself in a dispute and the steps you’ve taken to resolve it aren’t working, apply to the Victorian Small Business Commission for help.