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From small acorns oak trees grow, so the saying goes. Many business start-ups are born, nurtured and developed from a home office base but there will come a time when you have to think about moving to a ‘real’ office. Taking professional business premises may be a huge step up but it does offer some key benefits that are essential for a growing business:
Depending on the exact nature of your business, expanding your operation may require more supplies, more equipment and a bigger team. Moving to commercial premises can give your business the space and the facilities to accommodate growth.
Working from home can be fraught with distractions and interruptions that can stop you from achieving peak productivity. A professional environment will support your ambitions to grow the business by allowing you to focus fully on the task at hand during the working day.
A home office may not be the ideal place to meet clients or suppliers. If you are keen to professionalise your image as you grow, business premises with specialised rooms may send a more appropriate brand message.
Of course, choosing your first business premises is a critical decision that is not only likely to be one of your biggest outlays but could be a determining factor in your ultimate business success. ‘Act in haste, repent at leisure’ is another saying worth bearing in mind here.
How much space do you need / can you afford, and what’s the best location for your premises? Are you looking for maximum footfall past your door, good road links and access for deliveries, convenient parking and warehousing facilities or a short commute for your team members? These and many other questions will need to be carefully thought about.
Your first port of call will be a property agent who can give you an overview of what’s available, arrange some viewings and answer your initial questions. Thoroughly investigate any buildings you are shown that are of interest. Where possible, speak to the existing (or previous) tenants.
Ask the landlord as many questions as you can and find out about the commercial lease terms available and ensure that these are suited to you as a tenant. In particular, be careful of ‘full repairing and insuring’ leases where the tenant is committed to meet virtually all the landlord’s costs to repair and restore the property to its original state at the end of the lease term.
If negotiations are in process, insist on a Schedule of Condition, a specialist report that records the condition of the property when the lease is assigned to a new tenant. “It’s a factual ‘snapshot’ picture that can act as protection for both parties, in that it provides a useful basis for negotiation of any sums payable by the tenant at the end of the lease term to settle damages in respect of dilapidations,” Brian Gale.
Leasing business space will undoubtedly increase your monthly outgoings. In addition to the rent, there’s suddenly a wealth of overheads you didn’t have to worry about before. Utilities, business rates, insurance, maintenance, office cleaning – it’s no wonder that many small businesses choose to rent fully serviced offices that include most of the above.
Depending on the type of business you run, you may need additional services or permissions. How about dedicated internet access through a leased business line? CCTV security cameras or round-the-clock access? You may need special fit-outs for a workshop or manufacturing business. Check that your new location is suitable for your business activity or if you need planning permission for change of use or to make alterations to the building.
Last but by no means least are decorating and furnishing costs to turn an empty shell into welcoming, fully functioning business premises where you can thrive. In addition to office furniture and IT equipment, think about injecting some personality into your brand as it starts to emerge as a successfully growing business. From pot plants to colour schemes, make sure your physical environment reflects your company values.
Buying commercial premises
While most businesses rent their premises, there’s nothing to say that you can’t invest in buying commercial property if you are in a financial position to do so. It goes without saying that you should talk this through with your accountant before you decide to go down this route.
With mortgage rates currently low, your repayments could turn in fact out to be lower than the amount you would pay in rent. If you are interested in getting a commercial mortgage, or you have the capital available, this could be a shrewd long-term investment move.
Another advantage of buying your own property – leasehold or freehold – is that it gives you clarity and control over your occupation, doing away with perennial and often bothersome negotiations with the landlord. And if you do decide to move on, you have the option of selling up or becoming a commercial landlord yourself while gaining a valuable new income stream in the process.