Choosing the right property for your business
Selecting the right premises is a key decision for many businesses and it is important to consider the matter thoroughly before jumping in, as renting or purchasing a property is expensive. Below we have created a list of our top 10 considerations that you should have in mind when choosing your business premises.
1. Customer base and competition
It is important to examine and analyse the demographic of your customers. If many of your customers are in one specific location then it should be obvious that the closer you can set up business to them, the more your customers are likely to visit you.
However, if there is already an established competitor in that location you may find it difficult to attract customers to your business. Consider how big the pool of customers is and if there is enough room in the market for two or more similar businesses.
2. Transport and Access
Try and assess how easy it is to access the premises for your customers, employees and suppliers. If you are going to be taking large deliveries from suppliers or selling large quantities of goods to customers, how easy is it for them to access the premises? Is there a car park?
You should also consider whether the local authority is considering any works in the future that will affect footfall or access. Your solicitor will be able to help you find this out before you commit to any premises.
It is also worth checking out how well serviced the area is by public transport.
3. Planning permissions
If you are looking to take premises and change their use you should first check if this is permitted by the local authority. You cannot usually, for example, change the use of a retail shop to a restaurant without the local authority’s permission.
4. Services and Utilities
Consider what types of services and utilities you will need supplied to the premises. Water and electric will almost certainly be available, but are there any other business specific utilities you might require, such as super high speed broadband. You should check with providers whether these services are available at the premises before you agree to take them.
5. Cost
This will clearly be a major factor when looking for suitable premises. Expensive areas will usually mean higher footfall and greater exposure to customers, however, you may have to compromise on the size of the premises. You should think about what suits your business better: a smaller property in a more desirable area or a larger property in a less desirable area?
6. Business image
As well as weighing up the cost and size of premises in desirable and less desirable areas, you should also consider how the premises and the area they are located in will be perceived by customers. What sort of image does your business seek to portray and does the location compliment this?
7. Employees
As well checking the accessibility of the premises for employees, you may also want to consider the pool of local labour. If there is pool of suitable local employees available this can smooth out any necessary recruitment.
8. License, Lease or Freehold?
License
A license is the least secure form of property interest, it gives good flexibility, but reduced security.
Whilst you will usually be able to end a license on short notice, the same will also apply to your landlord/licensor which means it is difficult to make long term plans.
Lease
Leases are the most popular property agreement for established businesses.
Leases give you less flexibility than a license, but more security. Once you enter into a lease you will normally be contractually bound to keep paying rent until the end of the lease period. Neither you nor your landlord may end the lease early – unless you have agreed an option to do so beforehand.
Your solicitor can advise you on the terms of the lease and how these impact you as well as providing you with assistance in negotiating new terms tailored to your needs, should that be necessary.
Freehold purchase
You may want to buy your business premises outright. This gives you the advantage of having total control over the premises. However, buying property is usually expensive and may tie up a significant amount of your funds which could otherwise have been used to invest in other areas.
9. Finding a property
If you are not familiar with the area you are looking for premises in, it may be difficult to find suitable premises. You may want to consider appointing a local agent to help you.
Other sources such as local newspapers and the internet can also be helpful.
10. Growth
You will hopefully see your business expand and grow. As the business expands you will no doubt require further room and you might want to have this in mind when selecting business premises, otherwise you may find yourself having to restart your search for new premises.
If you would like any more information in relation to this article then please feel free to contact me via email: roger.hoque@bowlinglaw.co.uk.
