When you are considering whether to start a business and writing your business plan, one of your main considerations will be your business premises. You will need to carry out some research and also spend time to consider what you will need (and also what you can afford!!)
What kind of premises do you need?
Draw up a list of everything you would need from your premises.
Type - office, retail, industrial
Size - how much do you need, what for, the best layout for your business, heights of rooms
Utilities needed - gas, electricity, water, number of telephone lines - plus socket points etc.
Facilities - toilets and kitchens for your visitors or staff comfort
Legal Permissions - planning codes, health and safety
Location, Parking and Deliveries Access
Can the space be expanded or altered if the business grew.
Whether you can afford to buy or rent is dependent on your own long-term financial plans but you will need to consider a number of costs when putting together your budgets and cashflow forecasts such as:
Purchasing price - monthly mortgage repayment charges
Professional fees - solicitors and surveyors and possible planning applications
Alterations to fixtures and fittings
Fitting the premises out - office equipment, retail shop fit outs
Rents and Service charges from the landlord
Utility fees - gas, electricity, water - all properties should have an Energy Performance Certificate so that you can get an indication of how energy-efficient the building is and its services are - which will provide some indication of the likely costs to heat the building
Business rates - always check with the local authority to ensure the correct classification
Business Rates
Ongoing maintenance and repairs
Building Insurances
Contents Insurance
I think the key question is whether you need to initially run your business from any premises, once you have done the research you may find that the costs are too high to contemplate a purchase or even renting property which may put an end to your ambition of starting your own business.
For some businesses, such as those manufacturing/industrial you may unfortunately have no choice but to buy or rent, but for many service companies or retailers there is another option. Virtual addresses.
What are virtual addresses? This is a business address for your business so that your company can look more professional and perhaps larger than it actually is. You would work from home, so protecting your home address, but all mail would be sent to the virtual address and mail forwarded to you when requested.
Compared to the costs of renting the actual price is very low and enables a new start-up time to establish their products without a major cost overhead and the associated financial worry. Once the company is more established and has access to finance via profits or a financial product, as a loan or mortgage, then re-evaluating the need for premises is a useful exercise to perform.
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