Making the right property decisions
Article Date: Jul 29 2005For many firms, business premises account for the second largest outgoing (after staff costs) and yet most are missing out on potential savings through inefficient use of office space, according to the Royal Institute of Chartered Surveyors (RICS).
'It's of the utmost importance that owners think long and hard about the future of their business when it comes to property decisions,' urges Paul Bagust, product development manager at RICS, 'as they will pay later for mistakes made at the beginning.'
There are a multitude of issues to consider when choosing premises, not least (as property TV programmes never tire of telling us) the location. 'Think about whether you really need to be on a high street or in a major city; look at the possibility of a business park,' Bagust suggests.
Consider how much your business is going to grow, what equipment you may need down the line and if you will be able to alter your premises. If you want to put a sign outside your shop, for instance, would you run into problems with planning permission? When it comes to staff, explore the option of hotdesking or of employees working from home to save on space.
'One of the first choices to be made is between leasing and buying; there are pros and cons to both,' Bagust continues. 'And something that many people don't realise is that they can negotiate leases. Increasingly, businesses are opting for shorter leases, but there are exceptions. For example, if machinery and equipment are on the premises or if you have a prime spot next to Marks & Spencer, you may well want to hang on to it for as long as possible.'
Make sure you understand business rates and whether you can appeal against them. 'Almost all businesses can save money, if not on business rates then perhaps on rent reviews,' believes Bagust.
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