Choosing commercial property for your business can be tricky, whether you’re moving location or it’s the first time you’ve attempted to locate a site. There are a lot of factors to consider, from how the premises will affect your business and employees to the future progress of your company. Some elements will be dictated by the industry you work in and the type of business you run, but there are also legal considerations that every business owner needs to take into consideration. To provide you with more information before you make the next move, here are some key considerations you should make before choosing commercial property.
Location can often be a deciding factor for many people when it comes to choosing property, particularly for certain industries such as retail or restaurants, where accessibility is critical. This isn’t only the case for bringing customers in but also for recruiting talent – if there aren’t any decent transport links, you may find it difficult to hire employees. This is particularly prevalent to start-ups who will want to expand but may find that difficult if they’re in an awkward location that staff can’t get to easily. Location also plays an important role in terms of who or what will need access to the premises – will you regularly be receiving deliveries in large vehicles, for example? A location that doesn’t allow for access to these types of vehicles could be detrimental to your business.
No-one wants to go through the process of finding the ideal commercial space, putting a deposit down and then realising that the building doesn’t abide by certain legal requirements. Many issues can be uncovered upon deeper investigation that might not be immediately obvious. Not only can this be costly to resolve further down the line, but it can also hold up operations. A thorough survey will ensure that the building is safe and there are no alterations required, or anything that could put people at risk. Likewise, legal considerations such as conducting an accessibility audit, any necessary licenses and checking the property adheres to health and safety requirements with surveys and reports beforehand will ensure that it meets the specific needs of your employees and visitors.
Leasehold or Freehold
When it comes to choosing a property, the topic of leasehold versus freehold will inevitably arise. And the decision will be determined largely by the size of your business and the length of time you’re been operating your company. Newer businesses are generally advised to opt for a shorter lease to give them the opportunity to restructure if they need to, whereas a business that is more established may benefit more from a freehold contract. There are pros and cons to each and it’s important to assess both options carefully before making your decision. Renting, for example, comes with less of an upfront investment and offers flexibility, while buying gives you more autonomy and if the property increases in value, it can be an asset.
There are many costs associated with a commercial property, whether you choose to buy or rent, which extend far beyond just the initial purchase price or lease premium. You also need to factor in stamp duty costs, land registry fees, the charges from your solicitor and surveyors, any decoration requirements or alterations needed to the premises, and insurance fees. There may also be VAT costs to pay. Ensure that you exercise caution and due diligence when it comes to signing contracts and paying fees, to make sure that you’re within budget for your commercial space. Pay close attention to your cash flow, especially if you’re running a new business or a start-up, as overspending on your property could have negative implications in the success of the business. All businesses should think strategically when it comes to paying for commercial premises to stay within budget.
Whatever industry you work in, investing in commercial premises can be a great decision for your business. But there are plenty of considerations to make, from legal to financial, that affect the type of property you choose. As with any business decision, it’s worth taking the time to do your research, invest in the necessary surveys and audits for peace of mind, and carefully assess each option available to you to ensure that you’re making the right choice.