4 Questions to Help You Find Your Ideal Business Premises in London

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Getting ready to launch a new business is nerve-wracking and exciting – even more so if you’re planning to open up shop in the capital. You’ll already know that the market is exceptionally competitive, and that only 53.7% of businesses in the UK survive their first three years. You may even recognise that these odds look even less favourable in the capital, but if you’ve done your research, you’ll be preparing for success: London offers one of the most likely environments that successful firms will achieve exceptionally high-rate growth.

The premises you choose for your venture can make or break your path to success, and something you will have to decide pretty early on. We spoke to London property experts, Daily Move, to see what advice they have for entrepreneurs looking for a place to call ‘work’.

1. Do you want to buy, or rent?

The biggest decision you will have to make when it comes to finding your business space is whether you want to buy it or work there on a lease. As with most of your choices when starting a business, there are benefits and downsides to both.

Buying

For example, with buying a property, you can enjoy the freedom of modifying and refurbishment as you wish. Providing you can afford the initial investment, any increase in the property’s value can directly boost your company’s worth, and you can even recoup some costs by renting out additional space to another start-up. However, should any problems arise you will be fully responsible. Major repairs with fundamental aspects of the building (like roofing or heating) can easily reach into the thousands, which may not be affordable for your business.

Renting

Renting may be seen as more flexible – if your business grows quickly then you can simply move to a bigger space. It can also be a more stable financial decision, as your monthly rent is a fixed amount (commercial rents have also been increasing at a much slower rate than inflation over the last decade). The drawbacks are that you are still tied into a lease, which may restrict your company’s physical growth. At the end of this lease, your landlord will decide whether your rent will increase (and how much by), which can make it difficult to forecast finances long-term. Thanks to the competitive market in London, buying a good commercial property can work out to be a lucrative investment. Protect your money carefully though, and make sure you’re not about to gamble the future of your business on a crumbling wreck – always hire a surveyor to check that the building isn’t hiding serious defects. If you don’t feel like your money is safe, you might be better renting for now.

2. Does the space work for everyone?

When it comes to viewing a commercial property, don’t get taken in by lots of space and beautiful architecture. Walk around all areas and consider how they will work for all aspects of your business.

• Do you personally feel at home during the space? Can you envision where your desk would be, and how the layout would work to represent your business? If not, move on. • Will it meet the needs of your employees? If you have specific departments, will each team have a suitable working space? Are there enough break areas and toilet facilities?

• What about the business facilities available? Does the existing layout and infrastructure support flexible meeting areas, specialist wiring or production requirements?

• Are you expecting your customers to visit you here? If so, does the premises give off the right message?

How does it work for business partners and suppliers? Does it make you look like a reputable company to partner with?

• What about potential investors? Does opening your business in this particular area add value to what you do, in terms of location or proximity to partners? You might not be thinking about it yet, but there’s no harm in considering the future, especially if you’re buying the building.

 

 

3. How’s the neighbourhood?

Consider how the area beyond the building could impact your business. This includes the actual address of the building, your neighbours, and the street right outside your door.

• Will people be able to locate your business easily, or are you on a confusing residential or commercial estate that will require signage and detailed directions if people come to visit? • Is the area busy enough, or even too busy? Consider how much the nature of your work relies on people ‘stumbling’ across it, versus customers making a dedicated trip to find you.

• Are you brushing shoulders with your competition, and will this help or hinder your work? • Does the address lend the right tone to your business? Certain areas come with a degree of prestige (think about ‘Harley Street’ or ‘Silicon Valley’), is this important in your industry?

• Is there enough parking for your staff and clients? • Will the premises be safe, both in terms of the security of your office contents and the personal safety of staff and clients? Look for open, well-lit areas and on-site security. The ideal scenario will of course be very different depending on the kind of business you’re running. A pub will benefit from being in a residential area with high foot traffic, while an accountancy firm will likely prefer an address in Canary Wharf. Make sure you’ve thought about what kind of location will benefit your business the most, before picking a property simply because it’s nice.

4. Can you afford it?

Before signing a commercial mortgage or lease agreement, check in with a commercial financial advisor to ensure that you’ve considered every conceivable expense. You’ve probably accounted for the property’s business rates and estimated utility costs, but have you looked into cleaning bills or landscape maintenance? Outgoing expenses like internet charges, signage and waste disposal can quickly add up, as can discovering that you need to make costly renovations to accommodate additional production or server storage.

The future of your business can very definitely depend on every little decision you make at this stage, so don’t rush. There is a huge stock of commercial property all over London, so rather than rushing into a property simply because you’re itching to get started, hold out for the right property that will help you shape your success story.

 

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