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Whether you’re starting up your business from scratch or looking to expand and grow, finding suitable premises can be daunting. But, if broken down into a series of simple tasks, the process can be made much simpler. Looking at issues such as the size of premises, where it is located and what your budget is will help in making the best decision for you.
Home or away?
The type of business you are in will greatly determine where you operate your business from.
Many start-up businesses begin life at home, which can save you hundreds of pounds a month (the difference between success and failure for many), and there are measures that can be taken to create a sense of separation, such as a second phone line or a PO Box number as the trade address.
However, in many situations the home is poorly designed for business use. Your operating space can be small or remote, and too well known as residential (if you trade locally), and tying up the one phone line causes problems for you and other family members.
There are some businesses types where working from home is not an option. For example, if you have many retail visitors, you can only use a property which is determined by the local council as being a retail outlet, alternatively, you would have to apply for retail capability. Or if you are a manufacturing business, your garage is just not that suitable!
So, the next step is to think about what your space requirements are…
Size does matter!
If your business is a new start-up, try to make a realistic guess at what kind of facilities you will need: what are the absolute necessities when it comes to equipment and furniture, for example. If you have outgrown existing premises, ask yourself why.
Be careful when deciding how much space you need, taking into account things like storage and room for meetings. As a general rule, it’s best to assume that your current growth rate will continue, so allow some room for expansion in line with what’s expected.
Also, consider layout and technical needs, such as whether you require air-conditioned offices or hi-tech security systems. You may find serviced offices more appropriate for your needs. Though more expensive, they offer flexibility and enable you to move to other units in the building as you expand, which simplifies the decision of how much space to initially take and will also reduce moving costs.
And it’s not just about the present, it’s about your future too. Try to see past the current space problem that is demanding a move and think long-term.
How many people do you plan on hiring over the next few years? What you will do when you run out of space again? Can your building be altered inside by knocking down walls or installing a mezzanine floor? Is there additional space you can get your hands on nearby, or would you be allowed to extend?
If you are renting, how will the landlord feel about potential future alterations? Are you likely to run into planning laws?
These are the kinds of questions you need to answer before signing on the dotted line.
Location, location, location!
The location of your business premises will be dictated by the type of space you need. Do you want retail premises, somewhere to manufacture or just an office?
Ask yourself, do I need to be near my existing and potential customers? Depending on the nature of your business, this may or may not be necessary.
For shops, high street premises are expensive but will attract valuable passing trade. The further you move away from key shopping areas, the less rent you will pay; but also less passing trade will walk in.
Manufacturing demands lots of cheap space and great access. Look for large premises near key roads. Often older buildings are cheaper, and it doesn’t really matter if they are a bit tatty.
For office space, ask yourself if image is important – will clients visit your premises? If they will, then make sure they will be impressed. If not, then don’t worry what your offices look like. Instead focus on getting a good space at the right price.
Also consider your accessibility. Being close to home probably makes sense for small businesses, but think about whether your customers will be able to find you if they need to and whether any employees can travel to work easily and park nearby. Also, suppliers will need to be able to find you, so access to and from local transport links may be important to consider.
Money Talks
The first decision to make when setting a budget is whether to buy or rent your business premises.
The decision to buy business premises will depend on the type of business, cost and personal preference. Of course buying means tying up money with an outright purchase or commercial mortgage, but this might be preferable for some. For example, someone who intends to run a shop and live above it may prefer the security of this, or if you want to take a gamble in increasing property values of office workspace. However, bear in mind the cash required for a premises purchase or the repayments of the mortgage may outweigh those of a monthly rent.
Finding suitable rented premises is usually easier, as more are available: both in quantity and type. The rental agreements, however need careful scrutiny, particularly over rental rates, responsibilities for decoration and maintenance and other landlord obligations.
The temptation for every business, particularly if looking for its first premises, is to go for the cheapest property available. But often, cheap property is cheap for a reason. It might be badly maintained, unfit for purpose, too cold, or too hot. If it looks like a bargain basement you may struggle to attract staff, let alone customers.
The sensible route is to work out a realistic budget for your premises before you start looking at prices. What do you want to spend, and what’s the most you can afford to pay? Don’t forget to take into account all the financial aspects of premises: rent, rates, electricity bills, phones, etc.
Then when you are weighing up the different premises available, consider the pros and cons of each before looking at the price. If your chosen premises are still the cheapest – congratulations!
Next steps…start looking!
Follow the links to start viewing local business premises options and agent’s contact details.
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