Back in November 2017, we opened our newest office on Hoghton Street in Southport. It was hard work at the time, but now we love providing mortgage advice in Southport.
Nothing compares to the feeling you get when you move into new business premises; it’s a place to house your dreams and work towards your goals, but how do you pick the right one? The key is to narrow your options based on your limitations and requirements until the perfect premises becomes apparent:
Licensing, Leasing or Purchasing?
Firstly, you need to decide the terms on which you want to rent/buy your business premises. There are three main options: licensing, leasing, and purchasing. They all offer varying levels of flexibility and security, and you should think about your long-term ambitions and the length of time you want to remain in the premises:
Licensing
Licensing usually requires a small deposit of one month’s rent and then you pay your rent monthly or quarterly in advance. This requires the least amount of up-front capital and offers the greatest amount of flexibility, but the least security. You can terminate the contract with minimal notice, allowing you to move quickly if you want to upsize or switch location. The downside being, so can your landlord, meaning you could be asked to vacate the property earlier than you planned. Licensing is often popular with small businesses and start-ups who have minimal capital and may want the flexibility of a short-term contract.
Leasing
Leasing allows you to sign a contract granting you tenure of a property over a longer term, sometimes as long as twenty-five years. Established businesses are more likely to opt for leasing over licensing as it offers a higher level of security. However, it’s important to check the terms of the lease in regard to early vacation of the property, else you could be stuck paying the rent if you leave earlier than planned. Rent is reviewed at agreed intervals in most cases, which could mean you pay above market rate for years if prices fall.
Purchasing
Purchasing a premises allows you the greatest amount of freedom, you can alter the property as you wish, stay as long as you like, and sell up if you decide to move. However, it means having a substantial amount of capital to put down as a deposit. Also, market conditions have to be considered and how they will affect the value of the property over time. Buying business premises tends to be the option taken by big, well-established companies and investors who plan to lease them out.
What’s your budget?
When thinking about viable business premises, your budget is a huge factor. There’s no point wasting your time viewing places that you can’t afford, so it makes sense to consider this early. Have a look at the funds available to you and decide on a budget for your project. If you’re looking to buy, it’s a good idea to speak with a mortgage advisor and get an agreement in principle so you know how much you’re able to borrow.
Once you’ve set your budget, you can then move on to other key areas for consideration:
Location
The type of business you plan to run will dictate the required location, in most cases. Retail operations and restaurants, for example, are often better suited to town-centre locations which receive a high amount of footfall and offer good transport links. Whereas, if you conduct most of your business via online channels, an out-of-town location will probably seem better value.
Think about how your customers find and do business with you:
- Do you need a high street presence to attract new customers? Is most of your business carried out in person? Then you’ll likely want to be located centrally, where potential customers will pass your premises frequently.
- Is most of your work done remotely or online? Do you only meet with clients occasionally? Then footfall is likely to be less important, but good transport links might still be desirable.
- Is your business conducted 100% online? In that case, location is less important, but you’ll still want to make sure your employees can get to work!
Space and Layout
Your vision in terms of space and layout will be unique to you and your business. However, there are common things which everyone needs to consider:
- Total space – The overall size of the space you need in which to work.
- Division of space – Do you need separated storage space, or are you looking for an open-plan environment?
- Access – Do you need to be on the ground floor? Do you require a loading bay? Also, consider your health and safety obligations – Are fire escapes adequate?
- Outside space – You may need to offer parking if you’re in an out-of-town location – is there land on which to do so?
Wherever you decide to set up shop, we wish you the best of luck in finding your ideal business premises! If you’re looking to start a business venture, or buy a property (commercial or otherwise), give us a call or drop in for a chat and we’ll help find the perfect mortgage deal for you. Our contact details and office locations are available here.