10 questions to consider when choosing a new location for your business
According to the Property Council of Australia’s latest Office Market
Report, the Australian CBD vacancy rate is 10.7%. Vacancy rates are an important indicator of economic activity with low rates often leading to competition for spaces.
Even in times of high competition, it’s crucial to examine each property to determine whether it’s a good fit for your company. The wrong choice could cost you clients, partners or employees. During your search, you should consider the property itself, the lease, the location and the surroundings.
With most commercial leases falling somewhere in between two to five years, business owners moving locations should consider these 10 questions before they sign a new lease.
- Sharing: Is there an opportunity to share an office?
Sharing a space with another company can save money on weekly rent costs, as well as upkeep costs. Think about whether there are any complimentary businesses that you could team up with. For example, a personal training studio and a massage therapist is the perfect combination.
- Communication: Does the space reflect my company brand?
The space in which you operate your business should reflect your company’s brand. Let’s say you’re a graphic design agency with a fun, adventurous company vision. Your customers come to you for your youthful and energetic designs, so this should be reflected in your location and office space.
- Accessibility: Is the space easy for my employees to get to?
Where does your key staff have to drive from? A long commute is not only expensive it’s draining for the driver, which may prompt them to seek employment closer to where they live. Don’t risk losing your key people and try to factor them in before it can become an issue.
- Accessibility: Is the space easy for my customers to get to?
Convenience is just as important to your customers as it is to your employees. Your new location should be accessible for your customers, both in distance and parking. If you’re moving from the city to a suburban location, consider whether your customers are willing to make the trip out of the city. The lower rent expenses could be an opportunity to pass the savings onto your customers by reducing the cost of your product and services.
- Parking: Is there enough parking?
We’ve already mentioned the importance of accessibility for your employees and customers. Parking is central to this discussion. How many parking spaces does the location offer? Is there an opportunity to negotiate additional spaces? Your real estate agent will be able to help you if parking is of importance for your business. For example, parking is more important to a furniture store as opposed to a pharmacy.
- Hidden costs: Are there any costs I don’t know about?
Add up the full cost of the location including rent, utilities, maintenance costs, and any other costs that may not be obvious. Some buildings and office spaces require mandatory updates every year, so this is something that should aware of before making your decision.
- Company growth: Is the space big enough?
Many businesses fall into the trap of basing their location choice on their current business situation without factoring in future growth. To avoid being stuck in a small space or having to move again, consider your long-term company vision when choosing a new location for your business. Are you looking to employ more people? If so, you might need a bigger location. If you can’t afford to take the extra space now to give you room to grow, you might want to consider a shorter lease.
- The unexpected: What happens if I sell my company?
If you’re considering selling your company in the next few years, make sure the lease reflects responsibility on the company owner to avoid disputes in the future. The last thing you want to happen is to be stuck with a lease long after you’ve sold your company.
- Security: How secure is the price?
Don’t forget to ask the question of rental increase rates. Although rates are usually discussed at the beginning, it’s important to discuss the frequency of increases and if there’s cap on the increases.
- Cost: Can I afford this price?
One obvious and important question to ask yourself, “Can I afford it?” If you haven’t already calculated your projections as part of your business plan, calculate a figure before you start looking for new spaces.
Every business owner should work out how a location will contribute to the success of the business, and choose a spot accordingly.
Contact your local real estate agent to help you find a suitable space for your business.