It’s time! You’re ready to expand your business to a commercial space but what are the next steps? There are many things to consider when moving your business out of your home. You’ll find yourself reaching out to other businesses to support your own, including property agencies, designers and electricians.
Moving into a commercial space can also be an opportunity to expand your business’s profile and reach more customers.
When’s the right time to move to a commercial space?
Home businesses are increasingly popular these days, but there comes a point where your business grows beyond the limitations of a residential environment. You’ll start to realise this naturally as your business expands.
You might have noticed that managing your business from home is no longer feasible. There’s a lack of space, you have too many customers to continue managing from your home office, or perhaps it’s becoming difficult to balance your personal and professional life. Some business owners feel that in order to obtain and retain clients a professional environment is necessary.
You may be interested in hiring staff to grow your business but you will need a workspace in which to accommodate them.
You will need a space that works for you and the functions of your business, be it a nail salon or a consulting firm.
Planning makes perfect
As you will have found when starting up your business, planning is the best policy for ensuring professionalism and success. Before anything else, plan your move including budgets, timelines, task assignments, contacting clients and suppliers and engaging in thorough research. Factor in how your security, insurance costs and safety standards may change.
Consider how the move will change your business finances, you may be able to claim GST credits depending on your lease agreement.
You should also be aware of business restrictions in your area related to COVID-19.
Choosing the right space and location
Remember to keep the needs of your business in mind when choosing a space.
Do you need retail premises/a shopfront? An area for manufacturing, or a storage warehouse? A commercial office to accommodate staff? Or will a temporary premises like a pop-up stall or a market stand better suit your needs? Consider the limitations of working from your home and how a commercial space can overcome these.
Location is a crucial factor, as it is in any property decision. Would your business benefit from being close to a popular shopping area? Or should you be looking at industrial areas with close access to suppliers, storage and freight infrastructure? If you’re anticipating regular customer traffic then consider how accessible your space will be by public transport and ask yourself if there is adequate parking.
Wherever you choose, be sure to research your location before committing.
To buy or lease?
This is a major decision when moving to your first commercial space and there are advantages and disadvantages associated with both options.
- Purchasing: this incurs a major up-front cost and does not offer as much flexibility if you have issues with location or finances. Costs for ongoing maintenance will also be your responsibility. However, this puts the investment in your hands, offers you more control over changes to the space and you may be eligible for certain tax deductions.
- Leasing: A safer option for small business, leasing is cheaper and more flexible upfront, leaving you with more spare cash to invest in other areas of your business. However, bear in mind that rent prices can rise, the location investment remains in the landlord’s hands, and you may be subject to restrictions by your landlord.
Whichever option you choose, seek out professional advice to make sure you’re negotiating the best deal on your purchase or lease agreement.
Moving to a commercial space is an exciting time in the expansion of your business. By ensuring that you have taken a well-planned and researched approach to the move, you can look forward to improving the reach, professionalism and capabilities of your business.
“The opinions expressed by BizWitty Contributors are their own, not those of BizCover and should not be relied upon in place of appropriate professional advice. Please read our full disclaimer."