For a small business it’s likely that the initial years of operation are done from a home office, kitchen or garage. When the time finally comes to advance your business to the next level, purchasing office space can be exciting but overwhelming. To make sure you set yourself up for success, we’ve laid out 5 factors that are important to consider before you purchase property to assist in the growth of your business.
#1: Down Payment and Financing
First and foremost, do you have the money for a down payment? In an attempt at growth many small business owners make the mistake of purchasing property before they are financially able to do so without putting their personal security on the line. A responsible business owner will hold off on purchasing until he is sure he has enough in the bank for a down payment.
Once the down payment is secured, it’s likely that you’ll need financing. Be sure to do your research on the alternative ways small businesses can secure loans. Here we have tips on the 3 things to consider when seeking capital for your business.
#2: The Extras
Besides your down payment and closing costs, it’s important that you factor in all of the expenses that go into purchasing a building. Most commercial building purchases require hiring a commercial realtor, lawyer and property assessor. It’s vital that you set aside the funds for these necessities.
On top of the initial investments that go along with purchasing property, you’ll also want to think about the material items you’ll need to fill the space. From décor to office supplies and building upkeep, you’ll want your overhead to be considered before you begin to property shop.
#3: Be Clear on Your Priorities
There are many reasons to purchase property including the need for a storefront, product storage, employee office space, or client meetings. Be sure to understand exactly why you want to purchase the property and what needs the building must support. When you are clear on how you will conduct business in your new space it will be easier to separate the buildings that will work from those that won’t.
#3: Envision the Bigger Picture
When looking at properties for your small business remember to consider how the building will support your long-term goals. Be sure to identify how long you want to spend in your first office and the growth goals you want to meet in that timeframe. If the building has enough space to support your business now but lacks the capacity for the growth you expect in the next 5 years you may want to keep shopping.
#5. Do you like it?
Although seemingly obvious, it’s important to be sure that you like the property. Dig deep and envision what it would be like to be the building’s owner; what would be challenging about the space and could you deal with those challenges? Try to find out why the current owner is selling and if the businesses surrounding the property are prospering.
If you plan on having clients visit the building, think about their needs for the building as well. Your clients’ happiness is a large part of your happiness as a business owner so you should be sure to take their perspective into consideration before purchasing.
When it comes time for your small business to purchase property considering these 5 factors will ensure the most successful outcome.