When taking on commercial property, consider factors such as cash flow, the area, and regulatory requirements

When taking on commercial property, consider factors such as cash flow, the area, and regulatory requirements

If you are looking to lease or buy commercial property, there are certain things you need to consider before choosing one. Whether purchasing a unit for a restaurant, bar, warehouse or shop, we look at some of the main factors involved with selecting the perfect commercial property for your business needs.

The area

One of the most important things that you need to consider is the location. For example, if your business is a restaurant or clothes shop you will want to make sure that the premises is easily accessible for customers.

Location will also be crucial when it comes to hiring employees. You may find it difficult to recruit good team members if the place does not have good transport links, or the salary offered does not make the transport costs worth their time. Specifically, if you have technical requirements, you may struggle to source such personnel in small towns or rural areas.

The location of your premises will be even more important if you are a start-up, as it may be much more likely that you are hiring young people/graduates who are just starting their foray into the world of work, and so therefore may rely more heavily on public transport to get to their place of employment, rather than having their own vehicle in order to get to a less accessible area. It’s small, but essential things like this, that must be taken into consideration.

Having positive cash flow

If you are a new business, you should carefully consider how much you spend on renting or buying the facility. A start-up or new business should watch their cash flow carefully and avoid any risks of overspending on the premises in case business does not take off.

This can even be the case for fully-established businesses too. It may be worth being slightly strategic when it comes to how you choose a place to rent – for example, you may choose a prime location but decide to rent premises that are just off the main road to keep rent costs lower.

Lease or buy

Of course when it comes to choosing commercial property, it is essential you thoroughly consider whether to lease or to buy the premises. Generally speaking, it is recommended that newer businesses opt for leases on a short-term basis (around a year-long) this means that it is easy to restructure your lease at a later date than if it was longer term. (Source: CDG Leisure)

For larger, more established businesses, it could work out better to buy, especially if you plan to stay in the area for a lengthy amount of time, it may be more cost-effective.

Regulatory and building requirements

The last thing you want is to find a great commercial property that seems to have everything going for it, putting a deposit down, and then discovering that the building does not abide to a whole host of building regulations, which may take a considerable amount of time to sort out.

Conducting a thorough survey for the property beforehand is essential before any renovations take place or the premises is open to staff or customers. This includes any potentially harmful substances or building errors that could put stakeholders at risk.

Return on investment

If you plan to sell the business and the property one day, will it indeed hold its value? Could you make a good return on investment if you sold in 5, 10 or 20 years’ time? There are some areas that are undergoing regeneration such as Shoreditch, Tottenham and Wembley – which could turn into a good investment if you decided to resell your property or rent it out in the future.

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