What do I need to know about property ?
Deciding where to run your business could be determined by the nature of your work, running a restaurant from home is probably not a good idea and a window cleaning business is unlikely to need swanky offices!
The various options open to you are covered in this section.
Did you know? A survey of office costs around the world showed London to be the most expensive capital city– with total annual operating costs of over £1,500 per square metre! If you would prefer somewhere cheaper, try Bangkok at only £99 per square metre. (Richard Ellis )
Office or workspace?
Starting in an office or workshop will involve higher set up costs than working from home but may be more appropriate particularly if you are planning to employ staff or if your customers come to you.
There are important Health & Safety Issues that you will need to be aware of if you are planning to work from any premises.
A lease is a contractural agreement to rent a property. But do you rent or buy? Your financial situation could decide this for you, but if you chose to lease/rent, think extremely carefully about the implications.
1) Lord Forte is famously quoted as saying three most important considerations are LOCATION, LOCATION, LOCATION! However, the better the location the higher the rent!
2) Length of lease?
3) You may have to pay a substantial premium for a longer term lease.
4) Who is responsible for repairs?
5) Take legal advice!
Top tip - you want security, but do you want the legal obligation and for how long? Business success or failure may mean that you need smaller/larger premises in the future. Ask your solicitor about a ‘break clause’ which could present an ‘escape route’ at a defined point.
If you area able to purchase your property, this could prove to be an attractive long term proposition. You will be giving yourself security of tenure, possibly an asset that will rise in value, and any repayments will be reducing your loan rather than simply paying rent to somebody else.
You will need to use a solicitor to conduct the purchase, but also take advice from Commercial Agents and definitely pay for a full structural survey!
Top tip - If you are purchasing a retail outlet that relies on passing trade, take time to sit somewhere near by at different times of the day and conduct a head count! Try not to look suspicious as an arrest at this stage would not generally count as good publicity!
With a license, the property owner is effectively saying “OK, you can occupy my property for a while, but I can interrupt at any time and ask you to leave.” The advantage to the owner is obvious, but it can also be a flexible and inexpensive way for a new start to move into premises. Licences are usually relatively short term.