Getting the right space - 3 things growing businesses need to know
24 May 2018
We spoke to Tim Bottrill of Colloco to discuss the challenges small businesses face when looking to grow - and specifically, what they should consider when looking for and securing a commercial property lease.
Tim has loads of experience working with start-ups who are making the transition from a home-working or incubator space into premises of their own. Here, he shares his top three tips for anyone in that situation.
1. Make sure it’s the right time for you
If you’re at the point where you are thinking about moving into your own business premises (whether it’s an office, workshop, warehousing or retail space), it probably means that you have grown the business to a reasonable size.
Maybe you’ve taken on staff, have partnered with someone, or secured some additional investment.
It’s not a move people tend to make before they can reasonably project their business growth and can make a clear case for the investment.
Ensuring that it’s the right time for you and your business is paramount to your success. It’s not uncommon for a business to use an incubator or co-working space, or even work from home in the first few years.
And actually, unless your business needs a ‘physical space’ for stock or employees or customers, this is a great way to stay lean and agile whilst you grow.
Setting up shop, so to speak, isn’t necessarily going to be the next logical step for every business.
2. Get the right place for your specific business
This sounds obvious, but the commercial property landscape has changed considerably over the last 5 years and it’s imperative that you make sure that you are securing somewhere fit for purpose in this new world.
In the most part this change has been driven by the needs of employees and this should factor into your decision making massively.
To give you an example, a few years ago car parking was a major consideration for the firms I helped to relocate. More recently, it has fallen off the agenda and I’m now talking to people about whether there are bike racks, change facilities and shower rooms. The way people travel, and the way people live has changed the way businesses think about their spaces.
If you have a long-term vision for the type of people you want to employ, you should factor this in at the very start of your journey. This is especially true in the business and professional services sector, where the quality and location of your workspace might be one of the only USPs you can use to attract the employees you need.
Likewise, retailers aren’t just looking for passing trade anymore (although this can obviously still be important), what they want is a location and a building that fits with their values and will appeal to their customers; this might not translate to the ‘high street’ as it once did.
So… see your business premises through the eyes of your current and future customers and employees; this will help guide you to get the right place.
3. Know your legal responsibilities
A commercial property lease is not so dissimilar to the more commonly understood private rental lease, but people can easily become unstuck if they don’t understand their legal obligations.
A lease taken out by a Sole Trader, for example, means that the person signing is personally liable for the entirety of that lease. Even if you are a Limited Company, it is highly likely that a commercial landlord is going to want some personal guarantees and that means there will still be a level of personal liability.
I’ve sat on both sides of the table, as a landlord and as someone helping businesses like yours negotiate these leases. It’s a contract at the end of the day and like anything, you shouldn’t enter it without being sure you can deliver.
I think the best bit of advice I can give here is to make sure you understand the finer details: Does the lease include a service charge? Is broadband included? Is the broadband width sufficient for your business or is this an additional cost you’ll end up paying to boost connectivity? Above all else – understand your liability and, if in doubt, seek legal advice!
If you are a business looking to expand, you may want to consider contacting Business Sheffield’s Launchpad service. It’s a completely free service and their role is to help businesses in the city set up and grow. They can help you work through your business model and connect you with the right people to find the property that’s right for you. Take a look at their website here http://www.welcometosheffield.co.uk/business
Business Sheffield delivers the Launchpad Service in partnership with Sheffield City Region Growth Hub. The Launchpad project is supported financially by the European Union and has attracted £2,358,962 in investment from the European Regional Development Fund as part of Europe’s support for the region’s economic growth.