After employee salaries, premises are usually the biggest overhead that a business has to payout, so they must make the right choice. If you are looking to rent or buy new premises for your business, here are some things that you need to take into consideration.
Do you need specific business premises?
Whether you need specific work premises depends on the nature and scale od your business. If you run a vehicle body shop with twenty employees, you are not going to be working from your apartment, obviously, but in some situations, working from the comfort of your own home is the most feasible and cost-effective option. For example:
if you work mostly on your own with little else apart from a computer and a phone, you may be able to do this from an office set up in your spare room or even a summer house in your garden. If you do have to meet with clients, you can do it in a coffee shop or one of the coworking offices that have started popping up everywhere.
Be aware that some regulations come with working from home – getting permission from your landlord or mortgage company may be necessary, the local planning office if you are intending to make alterations or additions to the building use or structure and licensing authorities.
Should you rent or buy business premises?
Both of these options have pros and cons. Leasing and licensing business premises are both forms of renting, and with that is greater flexibility. Rent periods can be anything from one year to 25 years, so there is more scope for moving, but with this comes less stability. If your landlord decides they want to sell up, you have to move on. You also have less flexibility and choice when it comes to making adaptations and renovating the premises.
Purchasing business premises obviously gives you much greater control. As long as you stick to local regulations and any health and safety laws, the building is yours to transform in whatever way you see fit. You are also given a lot more stability. However, this comes at a much higher cost. Though, what a lot of people are not aware of is the fact that you can actually get commercial mortgages if this is something you are interested in. You need to do your research into this to make sure you’re eligible, what it entails and so on before you make a decision. If you decide to take this path, use an interest rate calculator to check how much you’re going to be paying in interest, as it might be worth buying outright instead.
Another alternative is to have your premises designed to your own specifications by a company such as Scenario Architecture. While a bigger outlay at the beginning, you will have a unique building custom-designed for you and your business.
What should I do once I’ve found premises I like?
Once you have found suitable premises, you will need to consider the following.
Buying, renting and licencing costs
If you buy a property, your costs will include surveyor and solicitor’s fees, deposit, mortgage fees, stamp land tax, and value-added tax on new premises. You have expenses such as application fees, advanced rent payments, deposits, etc., if you are leasing or licencing. Make sure you recognise all these costs and can afford them.
Are your requirements being met?
Ensure that all of your requirements are being met. For example, make sure that the space and layout are right, or if you plan to make changes that these will be allowed by the freeholder or landlord. Looking for a furnished office space in the heart of the Big Apple? Check out Corporate Suites.