The Economic Development department (or equivalent) at your local council may offer a variety of services and assistance to businesses, including information about business premises and sites.
A range of types of business premises is available; you should consider which would be most suitable for your business.
Industrial unit
Generally large and not especially cheap, therefore mostly used by existing small and medium-sized enterprises (SMEs) that are looking to expand.
Some businesses easily lend themselves to being run from home; eg, consultant, tradesman, freelance writer, as the home is used mainly for admin purposes.
The downside is that for most of us, our homes do not have sufficient room to devote to a business venture, as even if all you need is a telephone, computer, printer and filing space, this still requires space to set up.
There are a number of factors to take into account when appraising potential premises, some of which are covered here. The importance or relevance of any one aspect will depend on the type and nature of your business; a manufacturing business, for example, will have very different needs and priorities from a retail business. Use your common sense when appraising premises and try not to get too carried away with the excitement of signing the lease and putting your name above the door; this is arguably the most important, most costly decision you will make during your start-up activity and it is important that you get it right.
Buying - Pros:
• Generally appreciates as an asset, and so increases the value of the business over time.
• Avoids unpredictable rent increases.
• Provides security.
Buying – Cons:
• A large amount of capital is needed.
• Can be substantial security against which to borrow.
• Mortgage payments may be high.
• Ties up cash that could be used elsewhere in the business.
• Interest rates may go up.
• Attracts capital gains tax on sale.
Equipping premises
The start-up stage of equipping your premises is very exciting; it shows that all your meticulous plans are translating into reality and that your business is actually taking shape. It is very easy to get carried away and to insist on everything you might conceivably require, all brand spanking new. However, as with everything else, careful consideration is required.
What do you need?
Make a list, but challenge what gets included on it. It may be prudent to wait before purchasing some things you would ultimately like to have.
It is a good idea to discuss your requirements with a registered insurance broker. As he or she is likely to receive commission on any sales made, the time and advice given to you should be free of charge.
Public liability
Provides protection against claims brought by people other than employees (whose claims are covered by Employer’s liability insurance). The policy should cover bodily injury, loss or damage to property brought about by the operation of your business, and also any legal costs that might be incurred while defending against such claims.
It is your responsibility to discover any rules and obligations that may apply to your business.
Taking on premises has considerable financial implications, so take care to ensure you understand what you are doing.
The purpose of these assignments is to ensure that you give due consideration to premises and capital equipment.
Satisfactory completion of the set of assignments will demonstrate that you know and understand how to:
