All you need to know before embarking on a Loan adventure!
November 26, 2015
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Choosing the right Business Premises!

One thing most of us don’t realize until we are dancing the entrepreneurial dance is that: Decisions about premises can make or break a business!

Unless you are a completely home-based (meaning you are working from your basement or you have additional space in your home) or an online business, getting business premises, most of the time, will require buying or renting them. Each business has different requirements due to its field of activity and, therefore, it is important to consider your business needs and priorities when deciding on the business premises type and location.

Thankfully for all of us dancing or contemplating the dance, there are five questions which will significantly help you in your decision.

  1. What is the size of premises you need?

The golden rule is to not exaggerate. Keep your premises as small as you reasonably can. One low-cost option for the beginning, especially if you provide services than products (in this case premise is a must), is a shared business space. This can minimize your costs. And believe me this is one of the first things you need when establishing your business!

But if you are determined to find a place just for your company, try to find a small office, with the possibility of upgrade once you are more established. Let’s face it, no-one can predict exactly how a business will grow or how the economy will change, especially in these difficult times. Therefore, it is best to play it safe in this domain!

Through my experience, my advice is only ever take on premises if there’s a genuine business reason for doing so and, of course, only if you can afford it. Always keep in mind that you need to be aware of the full financial requirements. No one will give you a free pass if you can’t pay rent or repay your loan.

  1. What’s your best location?

Location, location, location!

Since the location of the premises you will choose is also important for your clients as well as your company’s visibility, you will need to equally consider Customers, Competitors and Suppliers.

Generally, being close to your customers is better, even though it can also be more expensive. People are not fond of travelling too far for their daily purchases and activities.

Also being too close to competitors isn’t recommended. But surely, you cannot be the exclusive company in one area. Just have in mind to try to avoid selecting a place next door to your competitor.

Lastly, you will need to consider your suppliers and how close to them you need to be in order to make your day-to-day activities easier.

When deciding on the place, ask yourself questions like:

“Which are the available transport links and routes close to the premises?”

“How will the area in question affect your business image?”

“Will you be able to get suppliers and make deliveries (if applicable) easily?”

Of course, these are only a few questions you will ask yourself once you get choosing a location!

  1. How much will you need to pay?

Rent and loans are not financial burdens which are easily handled by newly funded business and therefore, from the very beginning of discussions, you will need to be aware of the full financial implications taking on these premises will have. This means taking into account all costs. Such costs include paying a deposit, rent or purchase, business rates, utilities, cleaning and cost of insurance etc.

Put together a budget with estimated costs for all your outgoings including property expenses (decoration, furnishing, equipment), marketing, telephone and internet bills. Before committing to any premises, make sure your projected income can cover all these expenses, or that the funds you have at hand can do so. Make your homework and don’t fall into wrong considerations, such as overly optimistic forecasts, which are very likely to make it more difficult for your business to survive!

  1. Renting or buying?

Are you going to rent the place or buy it? This is one of the main questions one needs to ask themselves, although the general rule is that new businesses are more likely to rent a place.

In my experience so far, having dealt with a lot of newly funded companies, renting at the beginning of your entrepreneurial journey is a flexible solution, which doesn’t tie you into long contracts and is quicker to sort out, should you not be able to cover financial responsibilities or should you have so much income you want to move into a bigger spot.

On the other hand if your budget can afford it, buy the premise. In doing so, make sure you also consider the future needs of your business as you grow and expand. Buying a three offices premise will not cover your needs a few years ahead, leaving you in need of a new place.

  1. Where to search for the right premise?

Depending on the type of premises you’re after, there are a number of places to look.

Check local newspapers and search online. There are numerous local newspapers with property pages. Do not miss them. Additionally, nowadays, searching online is the trend with numerous property websites offering many opportunities for renting as well as for buying.

Commercial property agents can help you to find your property. Often these agents provide a range of services, including negotiations on your behalf. The agents usually have a good knowledge of rent price levels as well as how much is the reasonable price to pay for any given property. It is important to note that the landlord or seller generally pays the agent’s fees.

Finally, use your personal and business contacts. Put the word out there that you’re looking for business premises of a certain kind and ask your friends and associates to let you know if they hear of anything. Advice from contacts is usually free of charge!

Happy hunting!

And if you need more information contact us and will be more than glad to assist you in finding the ideal premise for your business.


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1 Comment

  1. Hello there. I recently read the post as well as have to share just amazing site. With thanks.

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