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How to work out what you need from commercial premises

Plush riverside office developments might seem appealing, but what do you actually need?

Three factors dominate the priorities of small businesses looking for premises: cost, cost and cost. Nobody ever has enough money, so there is an overwhelming temptation to go for the cheapest property. It is a mistake that can take decades to rectify – and even bring a promising business to its knees.

Ironically, some firms swing too far in the other direction, committing themselves to a heavy initial outlay because they believe image is vital – and image does not come cheap.

Finding the right premises is the real secret. That can, and will, vary enormously according to the type of business. But there are some general rules that apply to any operation.

Location

Shops need passing trade but high street premises are expensive. Do you need passing trade or will customers come looking for you? Rents fall quickly within yards of main roads. Offices are even more flexible, particularly if most business is done on the phone.

Manufacturing and storage relies heavily on access. Think about how vans and lorries will deliver and collect goods. Nearby parking can be important. As traffic restrictions tighten, public transport can be even more so.

Size

This is a crucial decision. Health and safety laws provide basic guidance on how much space is needed per office desk or manufacturing process. But allow for growth. The whole point of business is to expand, so try to be flexible. This will cost more, however, today’s outgoings must be balanced against the prospects of tomorrow’s earnings.

Growth

Every small business aims to become a big business but this prospect can be choked from birth if the wrong decisions are made. Building in flexibility at the start can be important.

Can a building be physically altered internally, such as knocking down walls, extending outwards or upwards? Is there spare land next door for expansion.

Landlords obviously hold the whip hand and it can be important to make agreements from the outset about what will be allowed and how much extra will be charged on top of the cost of rebuilding or alteration.

But planning rules must also be considered. Local authorities are not always open to discussion about the future of premises. They may have rigid rules about increasing density of development. The buildings may be in a conservation area or near housing, in which case it will be much more difficult to consider changes.

Even where no physical changes are required, it is crucial to consider restrictions on potential alterations in how premises may be used. Lease conditions and planning rules are usually quite specific about what goes on within a building. You cannot even change a shop to an office, or vice versa, without permission from the local authority and landlord. In fact, changes from one type of shop to another can sometimes fall foul of planning restrictions.

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