The Right Time to Acquire a Premises For Your Business
Taking on a premise for your business is a big step. Whether you are buying an additional premises or looking into setting up your first premises, it is a substantial investment involving several stages and raises some questions. For example, should you rent or buy the premises? What type of premises would best suit your business? If you are currently running an online business, how will establishing a physical premise add value to the business?
If you are literally only just setting up your business, then how will paying out for a premise affect your cash flow? You must make sure that acquiring a premise is the right choice for your business, and of course, at the right time.
The Typical Process
Firstly, it would be a good idea to shop around for your premises. Look for advertisements in local newspapers. The Internet will have some good leads also, especially if you are planning on relocating. Bear in mind the location of the premises; will you be able to reach your target customers here? Will suppliers be able to get to you easily?
You will also need to assess how you are going to pay for the premises. Renting may be the more attractive option for you if you are only just setting up your business, as purchasing a premise outright can create a substantial impact on your working capital if you are a start-up business. However, if you are in a fortunate position to be able to pay the full amount for your premises then this can present some benefits. For example, you will have more control over the premise and may save money in the long-term.
You should consult your local bank too to see what financial assistance they have in place for this type of payment. The local government may also have some grants / bursaries available.
You will also need to look into licensing for your premises. This is especially applicable if you plan to sell licensable products / services. Your licence should be kept up to date and should be displayed at the premises.
If you are currently running as an online / virtual business it is important that transferring the business to a physical premise is the way forward for your particular venture. For example, will moving into a premise allow the business to expand further in the near future? Are you planning on taking on more employees, in which case a premise would allow more effective monitoring of day-to-day activities?
Another key factor in your decision may the type of online business you are running, and whether it can be effectively converted. This may depend on the type of products / services you are working with.
A Final Thought
Whether you are a start-up business, a virtual business or a multinational business, taking on a new premise requires carefully considered decisions and must be done at the right time with financial aspects and future opportunities taken into account.
If you have any ideas or tips regarding where to look for premises opportunities, or anything else related to today’s article, please let us know!