23 Nov 2022
So, you’ve registered your business, have a team behind you and are ready to start selling your products or services. The only thing left to do is to secure a premises. To help you figure out where to look and what type of properties to explore, we’ve put together a handy list of things to think about along the way.
Picking the right premises is an important yet challenging endeavour.
You need a location that’s easily accessible for employees and customers, and the building itself should nurture productivity, wellbeing and growth. From choosing the right spot to getting your head around business rates, here are 5 key things to consider.
One of the obvious things to consider is where you want to be based. You should think about your customers, suppliers, employees and competitors when making a decision.
Then, of course, there’s the cost implications of setting up in a ‘desirable’ area. Location plays a significant role in the cost of a commercial property. Although a cheap location might be tempting, could it hurt your finances in the long run?
You might want to consider enterprise zones. which are areas designed to spur investment and development. Enterprise zones often provide access to tax reliefs, business rates discounts and easier planning permission.
If you’re a retail business, where are your customers based?
Where are your competitors based? Do you want exclusivity? There are pros and cons of setting up near businesses that are similar to yours.
Do you want to be close to local suppliers?
Where do your existing employees live – can they commute easily?
Does the area provide ample access to talent?
What amenities do you need within walking distance?
If you’re moving into an office, work out how much space you’ll need.
Coworking spaces and services offices are often rented on a ‘per desk’ basis, and facilities such as breakout areas and kitchens are shared. So, if you go down this route, you won’t have to worry too much about working out the square footage.
According to the office search company Hubble, “the most commonly accepted rule in London is that 100 sq.ft. per employee is the ideal amount of space per person.
“This allows for roughly 50 sq ft for desk space and another 50 sq ft to accommodate room in communal areas, like breakout spaces, meeting rooms and kitchens.”
If you’re renting a premises you’ll also need to consider access. Does the space allow for 27/4 access? Can people with limited mobility access it?
Comfort is also super important. How much natural light is there? Moving into a space without ample natural light could have a significant impact on your electricity bills and also have an adverse impact on employee health, wellbeing and productivity.
Another thing to think about is whether you’re going to take out a licence agreement on a premises, lease one or buy. Each option has its pros and cons, and the type you choose will depend on your budget, needs and how much flexibility you require.
Licence agreements enable you to cancel your contract at short notice, which makes them a flexible option. There usually aren’t many upfront costs to pay either (maybe only a deposit), so they’re often popular with freelancers and startups.
Some office licence agreements are on a monthly rolling basis which is great for flexibility, but if you’re looking for more security it might be worth exploring other options.
A lease requires more commitment and upfront expenditure. A commercial property lease can be anywhere between three to 25 years, and you might be able to agree to a break clause. It can be useful to get legal advice because there’s so much involved.
If you have the capital you might be thinking about buying.
It’s the more expensive route but it can give you more autonomy over how you fit out and adapt the premises. A commercial mortgage can provide you with the long-term funding you need to buy a property for your business. Deposits typically range between 25% to 40% of the value of the property.
Do you need planning permission or licences?
If you’re looking to set up a shop, for instance, the process may be easier if the building you’ve chosen has permission for your ‘use class’.
Business tenants have responsibilities when it comes to health and safety too.
Among other things, you’ll be responsible for fire safety, electrical equipment safety and gas safety. You’ll also have to make sure your premises is a reasonable temperature and has ample space, ventilation, lighting and facilities.
You may have to pay business rates, regardless of whether you’re renting, leasing or buying a premises. Your business rates bill will be sent by the local council yearly in February or March. You can estimate your business rates and apply for a discount if you run a small business. Some properties don't incur business rates, such as farm buildings and properties used for the welfare of discabled people.
Whether you’re about to move into a new premises or run a completely remote operation, we can help you find the finance you need to trade with confidence.
We can even match you with commercial property finance if you’re looking to invest in your own premises, or property development finance if you’re building one from the ground up. Start your journey to see what you could be eligible for today.Get funding