Commitment to take on business premises (bought or rented) is a very big decision for a business but especially a start-up. The considerations required if you decide that business premises are needed are some which should involve thorough research to establish a number of things.
Main areas would be –
- What are your specific requirements? Do you need industrial, retail, office or a mix of these? This helps to immediately narrow your search criteria and saves time looking for, or viewing things that are totally inappropriate.
- How much space do I need? All aspects of your operation need to be considered from floor space footprints on machinery/equipment to storage areas. Laying out an ideal floor plan for your business (even office based) will give you a good understanding of the requirements but also the logistics of how your business will work – production flow for example. Although floor space can be costly, it’s always worth trying to stretch to as much as you can afford. You may need room for expansion as you become successful and having to relocate later may be prohibitive for various reasons e.g. tied into a long lease or high cost of relocation.
- Do you have specific Health and Safety needs to consider? This could revolve around the specific nature of your business but this is something which should never be overlooked and you need to ensure any premises can cater for your needs.
- Are aesthetics of your business premises important? Will the appearance of your premises be relevant to the specific venture you are looking to undertake? Your premises might be the first thing potential customers see and their perception will be influenced by that initial view. This is more important if clients visit your site but irrespective of this, having a business that projects an outward appearance that inspires confidence is always a good idea. Equally, keeping the internal appearance clean, tidy and well maintained is important for the well being of staff as well as any customers who might visit. It’s always nice to show off your business activity in its best light.
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- What will the premises cost? What is my budget? Buying and leasing/renting, (unless you can afford to buy outright), immediately add monthly costs to the business, for rent or a commercial mortgage. In addition to these you need to factor in anything which relates to service charges or utility bills for the premises and either option will invariably incur professional fees for conveyance or lease set up. Other big considerations on cost are business rates, (check with your local council as these are often subsidised for the first 12 months of occupation and there is also small business rates relief available) and building insurance which can be significant in relation to the overheads your business will have to sustain.
- Will the business buy or lease? Buying is sometimes difficult to achieve for a new business unless there is a substantial amount of cash available to allow this. Typically commercial mortgages will be around 65% loan to value which means a hefty chunk of money is required for the deposit. Leasing is the most common option and being aware of the terms of the lease is the most important thing. How many years? Are you responsible for the maintenance of the property? Does it include a service charge? What notice period is required should you decide to relocate? There are other questions but the main thing is you fully understand your liabilities and obligations around the lease (and your rights) and never sign anything until it has been looked at by your legal professional. Anything unfairly biased should be walked away from or negotiated out, and you may also be able to agree caveats within the lease that make it more workable e.g. early release from the lease.
- Do I need planning permission? Interior work more often than not doesn’t require any planning permission but exterior work often does (depending on size and scale). Either way it is always wise to check with the local council to ensure you conform to any requirements. If you are working from home you also need to inform your mortgage provider as well as the local council regulations in regard to planning permission. In all cases you have a legal responsibility to ensure all work is carried out to conform to building legislation. In addition, you are also obliged to make reasonable adjustments to the business premises to cater for the safety of staff, customers and visitors.
- Where do I locate? Very careful consideration is needed on this point and it very much depends on your specific business and often related to the accessibility required by staff and customers. Do you need good footfall? Is it advantageous to be near good road links? Is it useful to be near my key suppliers? Will it be accessible for my workforce? Locations or features normally come at a price and can be commercially advantageous but, alternatively, being more remote may be cheaper and not matter as much as a factor that will drive your success.
- Does the premises have security or do you need improving? Security of any property is important and none more so than businesses premises. Many insurance companies will require a minimum level of security to cover you but it is in your interest to project your property and any valuable business assets you may have.
Once you’ve narrowed down the criteria, you can now consider searching for something that will fit your requirements. Before you start looking, draw up a list of requirements based on the thoughts above (and anything else you feel is relevant) and, like buying a house, look for something that fits the bill. It will all help you avoid wasting time spent looking at unsuitable premises.
Business premises can be large investment even if you are just renting, ensure you consult with an expert before committing to a deal to ensure you are not missing anything.
Thoughts on business premises from Yorkshire Powerhouse
Now you’ve read about Business Premises, have you any more questions?
Here at Yorkshire Powerhouse, we’re happy to help as much as possible – is there anything else we can do to help you, do you have any further questions or can we help introduce you to an expert – please let us know:
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