How to Choose a Commercial Property for Your Business [Infographic]
Choosing Commercial Property for Business
When it comes to choosing the perfect property for your enterprise, there is no one size fits all strategy. The decisions you make must be weighed by the specific needs and wants of your business. Pleasing the needs of you, your customers, your employees and your business associates can be a difficult juggling act. ‘’Location, location, location’’ - like the old adage goes, the location of your commercial property is of the utmost importance. Choosing the right area for you, your employees, suppliers and your customers requires lots of research. In recent times due to the ever fluctuating real estate market, the issue faced by large and small businesses alike is should you rent or buy property for your business?
Buying commercial property is a huge undertaking. You will need a team of experts to help you all the different elements to owning your own property. It is a risky undertaking – rises and dips in the market can severely affect you and your business. However, there are many substantial rewards with owning your own property. It is vital for you to understand the potential risks you will be faced with. The last thing you’ll want is to purchase a property now and three years down the line realise that renting would have been a better option. Doing the necessary research into your company is therefore detrimental before beginning your search for the perfect premises. Hones Lawyers created the infographic below that is a step by step guide to choosing a commercial property with everything from legal information to planning.
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How To Choose A Commercial Property For Your Business
When it comes to choosing a property for your business, it's a balancing act. You'll have to satisfy the needs of your employees, your customers, and your business associates. And yourself, of course! Let's look at some simple steps to help you choose the right commercial property for your business.
Assemble a Team of Experts
Whether you're buying or leasing, you might want to consider listening to the advice of some experts:
An accountant can help you figure out what your business can afford and analyze the tax and operating budget benefits.
A lawyer can help you complete the transaction by negotiating with the seller/landlord and lender on your behalf.
A real estate broker can help you identify potential properties and what you can afford.
Determine Your Needs
Drawing up a list of what you need from your property is an excellent way to start your search. Your plan should include:
- Size and layout of the premises.
- Structure and appearance, both internally and externally.
- Special structural requirement, such as high ceilings.
- Facilities and comfort for employees and visitors - including lighting, toilets, and kitchen facilities.
- Utilities, such as power and drainage.
- Planning permission.
- Access and parking space - for deliveries or customers, including disabled customers.
- Whether you need the flexibility to alter or expand the premises.
- Your long-term business plans.
When looking for the right location, ask yourself:
- What kind of business do I have?
- Is customer accessibility important?
- How many people do I employ?
- Do I need exposure?
- What kind of space do I need?
- What are my growth plans?
Factors to Consider When Choosing a Location
The Level of Passing Trade
Monitor the traffic outside a potential location at different times of the day & on different days of the week to make sure the volume of pedestrian traffic meets your needs.
The Number of Competitors
Are competing companies located nearby? Sometimes that's good, such as industries where comparison shopping is popular. But if a nearby competitor is only going to make your marketing job tougher, look elsewhere.
Transport Links and Parking
Good public transport links & local parking facilities make it easier for employees and customers who don't live within walking distance.
These cause problems for your suppliers, make sure that your premises is accessible if you expect to have regular deliveries.
Make sure you check whether you're allowed to use the premises for the purpose you have in mind.
Local Authority Charges
This can add to ongoing costs of locating to particular area, which may make the premises less desirable from your point of view.
Employees generally prefer working in areas with good local facilities. You may need to make regular trips to the bank or postal depot.
There are taxes on business property to help pay for local council services. They're based on the property and don't reflect the turnover or profits of your business.
What Sort of Area It Is
Does it suit your brand? The image of your business may well be affected by the nature of your location.
Evaluate the Property
Once you have chosen your perfect premises, it's time to evaluate.
Engineers and environmental analysis will help verify:
- The condition of the property and its prior use.
- Any potential liability issues.
- Structural soundness.
- Necessary upgrades of electrical wiring, etc.
Make sure there is no potential changes in adjacent properties that could negatively impact your business or property value. E.g. development, road or infrastructure construction.
Establish that there are no prior or existing litigation and/or insurance claims affecting the property.
What Can You Afford?
Do The Math!
Your choice of premises will also depend on your budget. Whether you rent or buy, costs include:
- Initial purchase costs, including legal costs such as solicitor's fees & professional fees for surveyors.
- Initial alterations, fitting out and decoration.
- Any alterations required to meet building, health, and safety and fire regulations.
- Ongoing rent, service, and utility charges, including water, electricity, and gas.
- Business rates.
- Continuing maintenance and repairs.
- Building and contents insurance.
- In licensed or leased premises, legal responsibilities are shared between the landlord and the tenant.
- Whatever premises you choose, you need to ensure that you are properly insured.
- If you are in any doubt about your legal obligations, you should take advice from your business adviser and lawyer.
Before you move into your new property, you need to understand the legal obligations and restrictions that affect you. For example:
- Property must have planning permission.
- Must comply with building, fire, and health and safety regulations.
- Stamp duty may need to be paid.
- You're responsible for the health and safety of employees and visitors.
- Need to provide a suitable working environment.
- Must make your premises accessible.
- Need to comply with the terms of any lease or license agreement.
- You may require a license to operate or to sell certain products.
- Might be restrictions on:
- Times when deliveries are allowed.
- Noise and pollution levels.
- How you or your customers dispose of waste.
What The Experts Say
"Location, location, location is the classic rule for real estate business success. For small business owners, it's often the #1 factor that influences your ability to catapult your business to its full potential."
President of Kimco Reality Corporation.
"Before you start shopping for business space, you need to have a clear picture of what you must have, what you'd like to have, what you absolutely won't tolerate and how much you're able to pay."
Staff at Entrepreneur Media Inc.
"Containing costs is important, but smart retailers remember that they make money from sales and that no amount of advertising or public relations can make up for a lousy location."
Business writer for The New York Times.
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- When it comes to choosing the perfect property for your enterprise, there is no one size fits all strategy.
- The decisions you make must be weighed by the specific needs and wants of your business. Pleasing the needs of you, your customers, your employees and your business associates can be a difficult juggling act.
- Choosing the right area for you, your employees, suppliers and your customers requires lots of research.
- It is vital for you to understand the potential risks you will be faced with. The last thing you’ll want is to purchase a property now and three years down the line realise that renting would have been a better option.
- Doing the necessary research into your company is therefore detrimental before beginning your search for the perfect premises.