As a small business owner, one of the things you have to think about is the premises out of which you operate.
While some businesses rent their office, shop, or wherever, others own it outright. Generally businesses transition from renting to buying once they reach a certain size, but is that right for everyone? And at what point does a small business become big enough to take this particular step?
If you’re currently renting your premises, it could be that that’s the best deal for you right now. If you’re thinking of your future however and want more security and long-term benefits than renting affords, then you may want to think about buying your own office, warehouse, retail unit or whatever kind of property it may be, to own outright.
So while we may think of larger companies as being the ones that own their own premises – based, perhaps, on turnover or size of staff – it might be more accurate to say that those are the businesses that can be relatively certain of still operating out of the same premises in five, ten or more years from now.
When and if you decide to take ownership of your own property, in all likelihood you will want to take out a commercial mortgage. There are many benefits to buying commercial property using a commercial mortgage. Firstly, the commercial mortgages UK payment is likely to be the same as the cost of renting the property, but by buying, you get the additional bonus of owning the place at the end.
That not only means you have fewer bills to pay, but it opens up new options. What about undertaking building work without having to answer to anybody? Or how about being able to rent out some unused offices to another startup?
If you expect to shift premises every few months this might not sound so appealing, but this probably isn’t the case. You stand to save money in the long term by committing to continue operating out of the same place for months or years – something you may well have been planning to do anyway.
Consider also that if you rent a property then you are subject to rent increases which can harm your business. With ownership comes stability and predictability – which you’ll need if your business is to grow and remain profitable.
Overall, buying your premises gives you the best prospects and options – provided, of course, you aim to spend the next few years in your the same location.
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