When starting a business, there are many things to consider including where to set up. This article will explore the question, do you need a commercial property for your business?
When you first start a new business, you’ll be looking to cut costs wherever possible to keep to a tight budget. For many people, this means running the business from home to begin with to save on rent.
As the business grows, you may find that you need more space for equipment and staff and therefore, will be wondering what your options are. Commercial property solicitors see a lot of business owners entering into contracts without fully knowing what they’re getting into. So is there a way to avoid being roped into contracts and rent unnecessarily?
Let’s take a look at the different options available to business owners…
Run Your Business from Home
It is possible to continue to run your business from your home, even if you employ staff. There are, however, a few things you need to be aware of including:
When first employing staff, some business owners choose to rent a work hub. These are workspaces which can be hired on a casual basis and can be a great option for business owners running a hybrid work model whereby staff work from home some of the time and work together the rest of the time.
This is also an extremely cost-effective option for new businesses. These hubs can be rented daily or monthly in most cases and offer all of the benefits of an office without the large overheads.
These hubs also allow for some great networking opportunities with other businesses using the space. Workspaces or hubs are available in most cities and large towns.
If your business is growing, or you need to have a dedicated space for staff or equipment, renting a commercial property is often a sensible option, however, you do need to be aware that, once you sign a rental agreement, you will usually be tied to this no matter what happens to your business.
For example, if you sign an agreement to rent or lease your commercial property for five years, but your business does not thrive, you may still be on the hook for the rent, whether you can afford it or not.
Having said that, you may be able to negotiate a shorter lease on a commercial property which will allow for more flexibility but, you will always need to be fully aware of all ofthe terms and conditions.
Because of this, you should always consult a commercial property solicitor who will be able to advise you on the risks before signing a commercial property agreement.
Generally speaking, it’s mainly large and well-establishedbusinesses which actually purchase their commercial premises as, needless to say, this requires a significant financial outlay.
There are a few pros and cons of buying your commercial property and, these are:
Pros of Buying Commercial Property
Cons of Buying Commercial Property
One option that business owners may choose is to buy the commercial property in their own name, then rent the property to their business. This can be beneficial if, later on, the owner sells the business as he or she is then able to raise cash from the sale as well as gaining rental income from the property.
Consider all options before signing commercial property contracts…
In some cases, it is almost certainly necessary to have a commercial property for your business. This could be if you’re selling goods and therefore need warehouse space or, if your business needs specialist equipment which takes up a lot of space.
However, if your business is more digitally based, for example, a PR agency or a website design company, then you certainly have more flexibility and will be able to take your pick from the options listed in this article.
Please be advised that this article is for general informational purposes only, and should not be used as a substitute for advice from a trained financial or legal professional. Be sure to consult a financial or legal professional if you’re seeking advice about running your business. We are not liable for risks or issues associated with using or acting upon the information on this site.
