Leasing is often the preferred option for many business owners as it can minimize the financial risk, in some cases buying a property makes more sense. While some people see leasing as offering them more flexibility by making it easier to relocate should circumstances change, it can be in other ways be slightly short-sighted. Buying your own premises will help establish your business in the location and allow you to build over time. It can be quite disruptive if you move around especially in regard to customers and staff. In the business world people generally value stability and owning your own property you are in no way restricted when it comes to expansion or redevelopment.
However, as you are no doubt aware the cost of property in London is extremely high which makes it imperative that you choose wisely. There are a few things that need to be considered before making your final decision, especially if this is your first foray into the London property market. The more research you do prior to making a choice the better. When you buy a commercial property the last thing you want to do is to uproot your business 2 years later and move on as you have outgrown it.
Prior to committing to buy a commercial property, be it a shop, office space or workshop there are several questions you should ask yourself. So, to try and help we have listed five things you should do before you sign on the dotted line.
Have a Plan Before you Start
When you buy a commercial property, it is imperative you know beforehand what you want it to be. Now that may sound ridiculous, I mean who would buy a property without knowing what they were going to do with it. However, believe me that is just what some people do, usually when they think they are getting a good deal. Before buying a property, it is vital you consider how the property concerned fits in with your business needs. Those business needs are likely to differ dependent on what sector you intend to operate in. For example, the priorities for a retail outlet are unlikely to be the same as those for say a logistics company. Therefore, having a clear vision before buying is so important as in the long run it can save you not only time but a lot of money.
Location is Key
Picking the correct location can play a massive part in the success of any fledgling business. This is especially true where the nation’s capital is concerned. London covers a massive geographical area and as such it is significant you choose the location best suited to your needs. For example, if your business is in say the retail or hospitality sector then a more centralised location will offer you the footfall you require. However, if most of your business is done online or over the phone, then being in a more remote location probably won’t have any negative impact on business. It is common knowledge that property in centralised locations is generally more expensive. So, our advice would be carefully considering your needs when choosing a commercial property, it could make or break your business.
Accessibility/ Transport Links/Parking
The three things listed above are all intrinsically linked, whatever type of business you are involved in, it is imperative that it is accessible to staff and customers alike. You need to take into account how staff and customers are likely to travel to your premises. If for example the majority use public transport, then accessibility to bus routes and tube stations should be at the top of your list and maybe parking is not a primary concern. However, if you have customers visitors and staff travelling to work by car, availability of parking becomes a priority. If you are a manufacturer or in the logistics sector, then good road links will be an important consideration for you.
Make Sure the Property is Fit for Purpose
When you buy a house, you are required to undertake a number of mandatory surveys and checks. This is the same when purchasing a commercial or industrial space. Any lender will want to ensure there are no hidden problems that could have a detrimental effect on your investment. The last thing you need after completing your purchase is to be hit with a number of structural issues that could impact your ability to carry out everyday business activities. It is worth noting that your drainage system will not be included in the usual surveys, even though it is a critical part of the infrastructure of any commercial property.
We would therefore suggest that you contact a company specialising in blocked drains in London and arrange for a comprehensive CCTV drain survey to give you peace of mind that they are operating as they should. A drain survey will also highlight any issues that are likely to arise in the near future. This will allow you to either arrange for the issues to be rectified prior to completion or renegotiate the price to consider the cost of any repairs.
Work Within the Constraints of Your Budget
Quite often when people are starting a new venture the excitement can take over and budgets go out of the window. However, every pound you exceed your budget by when buying your new premises is an extra pound you must generate before your business turns a profit. That is why you should be as concise as possible when setting out your budget for the property and its running costs. Make sure you include things like professional fees, operational costs, associated environmental and health and safety needs and waste management costs. Good fiscal planning is the cornerstone of many successful businesses and that starts from the moment you decide to buy a property.
Did this help?
We hope so! While outlining the points above we have only scratched the surface when it comes to buying a commercial space, however following those pointers will put you on a steady footing and make it easier to choose the property best suited to the exact needs of your business.
