So, you’re thinking of setting up shop at a new location, maybe it’s your first location. Jason Harris-Cohen, Founder of professional house buying company Open Property Group, lists five very important factors to consider.
Despite the rise in ecommerce, and claims of the ‘death of the British high street’, the need to find the perfect brick and mortar office is still as important as ever. Location plays a huge part in the search, and it can be overwhelming when considering all the options – do you want to move into a co-working space or rent or buy a commercial property of your own? Should it be in a rural or city setting, and in which town? Here are five key factors to consider to make the decision-making process that bit easier.
Volume of passing trade
If your company relies largely on passing trade, then a high street location may better serve your business goals than an office in an industrial estate, where you’ll struggle to draw in the crowds even with an enticing shop front and visual merchandising. However, be careful to not compare all high streets as like-for-like and to consider the footfall of locations as this will directly affect your passing trade. The British Retail Consortium (BRC) publishes monthly Retail Sales Monitors which include footfall figures that can help you evaluate the seasonal peaks and troughs of your prospective location.
Transport links and accessibility
An office location that is conveniently near transport links can make your company a better place to work for staff and appear more attractive to prospective employees who may be deciding between taking an offer at your business or one of your competitors. However, entrepreneurs and SMEs must also consider the accessibility of their office for what their day-to-day operations entail. For example, a city centre location might be perfect for customers and clients to find but if your business expects regular cumbersome deliveries, will you require a space with a loading bay? When choosing a location, it’s also worth researching how far away the local universities are too, as they can provide a pipeline for future talent as your business grows.
Nearby, well-established competitors that rival your new or smaller business can make your marketing job exhausting as you attempt to prove yourself as an industry leader. This, however, should not scare away the entrepreneurs that are not afraid of a bit of competition. If your business serves the restaurant and entertainment market, then a location near competitors could be advantageous to attract their overflow of customers with your own deals and quality customer service.
Before you begin your property search, it is crucial to calculate your budget carefully to ensure you do not waste your time looking at office locations that your business cannot afford. Certain areas are more expensive than others – such as comparing the regional price differences between the North and South of the UK – and this should be taken into account. It is critical to consider the potential business rates tax that will be incurred by certain locations too. Business rates are the tax charge placed on commercial properties that can roughly be half of the value of their annual rent. When deciding to rent or buy, entrepreneurs and SMEs should take into account their current capacity and plans for growth. If you foresee your company growing within a few years, it is not advisable to buy a commercial property if you know you will outgrow it. This is discussed in more detail below.
Potential for growth
As mentioned above, it is not recommended to outright buy a commercial property if you foresee that you’ll outgrow it within a short amount of time. Likewise, SMEs should not optimistically bite off more than they can chew with a property that can eat away at their profit margins in hopes that their company will grow. Alongside your plans of growth, entrepreneurs should also consider the potential to take on another, or bigger unit, within the building (especially relevant to those that choose co-working spaces), and whether future planning permission is likely to be approved.