Finding the right premises

Oct 17 2006 By Evening Gazette

Buying a property can often be the only way of getting the right premises for your business.

However, it involves greater risks and financial commitment than renting premises. Factors such as price, location, functionality and the availability of finance for purchasing premises will all have to be taken into account before you make a decision.

The Advantages of Buying

* Fixed overheads will help you to plan your budget and control your spending.

* You will have more control over the management and repair of the building, and provided your plans don't contravene planning regulations or other laws, can modify and redecorate it as you see fit.

* The value of the premises may increase and over time your purchase may prove a good capital investment.

* You could let the property in the future. If the needs of your business change or you decide to move, the property could provide an alternative source of income if it is let to another business.

* It may be cheaper than renting. Financing a mortgage may provide a lower monthly outlay than the costs of renting a similar property in the same area.

* If you choose to move, you are not bound by rental notice clauses.

The Disadvantages of Buying

* It is not easy to move or give up premises when you want to. This may make it difficult to react to changes in your business circumstances because of the time it takes to sell the premises.

* You need a substantial deposit. Commercial mortgages require larger deposits than residential property loans. This can tie up capital that could otherwise be invested in your business.

* You have total responsibility for the upkeep and security of the property. You will need to keep up to date with all legislation regarding fire, accessibility and health and safety issues.

Finding Suitable Premises

The main considerations to bear in mind before you start looking for premises for your business include:

* Location - do you have particular requirements in terms of passing trade, ease of access for employees and customers, parking facilities and proximity to public transport?

* Size - what are your requirements for floor space over the next five years? Do you just need office space or is storage space also necessary?

* Adaptability - can you use the space in different ways?

* Cost - how much can you realistically afford to pay for the property?

* Potential returns - could you let out the property in the future, sublet part of it while you trade, or sell it if you decide to move or close your business?

There are Numerous ways to find Commercial Premises for Sale, including:

* Commercial property agents: similar to estate agents, commercial property agents promote and offer commercial premises for purchase and lease. Premises offered may include offices, shops, factories, warehouses and land designated for commercial use. Agents can work on behalf of the current property owner or for the prospective buyer.

* Internet searches: there are numerous commercial property search engines, including ones that specialise in retail or office premises. Many newspapers include commercial property supplements. Alongside general news about the property market, these carry advertisements for properties for sale and lease, plus details of commercial property agents in your area.

Checking out the Building

* The property particulars from the sales agent will provide only a starting point for your assessment of each potential property.

* It is essential to look around the building yourself and to visit at different times of the day and week to get a feel for passing trade and traffic.

Planning Permission and Legal Compliance

* You should also look into the possibility of planning permission, as you may wish to alter the property at some point in the future to better suit the needs of your business.

* Consult the local authority to ascertain whether there are any restrictions on future developments to the business.

The building itself

* If unattended repairs cause significant deterioration, the property may prove difficult to sell if you later wish to move.

* You therefore need to identify and estimate the cost of rectifying any defects at the outset. It may be that, backed with a survey, you can negotiate a lower purchase price, or ask the owner to rectify any problems before you buy. A surveyor will also be able to advise you if you intend to make future alterations to the premises.

Get professional advice and support

* Talk to property agents and neighbouring businesses to get an idea of the character of the immediate area.

* The local Chamber of Commerce or council may be able to provide a detailed report on the area if you are not familiar with it.

* Paying for a full structural survey of the external and internal structure of the property is essential. If an existing survey is made available, check that it is up to date and that it has been conducted by an accredited professional surveyor. Do not rely on photocopied or outdated reports.

* A valuation should also be carried out. You should always ensure that you obtain valuation advice from an independent agent before making an offer, rather than relying on any lender's valuation of the property, which may be based on the security of their loan amount.

Business Link works with you to build an understanding of what your business wants to achieve and can help identify the most appropriate premises and, if appropriate, assist with the identification of funding to ensure you achieve your objectives. Call Business Link on 0845 600 9 006 or email info@tees.businesslink.co.uk to see to see how you can improve your business performance.