Finding and securing the perfect commercial space for your newly established small business is key in having a successful market entrance.
The process however can be riddled with challenges, and can be catastrophic to your business especially if you pick the wrong typeof premise. You then have the added hassle of getting the legals right with commercial conveyancing!
Fortunately, you do not have to be a Conveyancing Solicitor to pick the right space for your business. Check out these clever tips from the commercial lease solicitors at Express Conveyancing to find out what to look out for before you shortlist and start negotiating Heads of Terms with a potential Landlord.
Which space is right for you?
Not all commercial spaces are created equally. Depending on the type of businesses they were originally built for, the proposed premise will have varying use classes pre-approved by the local authority by way of planning consent.
Depending on what type of business you are trying to carry out from the premise, you will either require the property to come with pre-approval or apply for change of use class prior to commencing any trading activity. In most cases, the latter would require you to pay for such planning changes instead of your Landlord.
Assuming the property already has the relevant planning consent’s, you should also consider the following when it comes to picking the right space for you:
- How big does the new space need to be? Isthere be enough room for you to grow and expand when business starts picking up?
- Do you need large open spaces, such as in the case of open office plans or specialistequipment installed at the premise?
- If so, you need to take in to consideration the cost of carrying this work out and most often, dilapidation costs to the Landlordto return the premise back at its original state at the end of the term of the lease.
- Do you require warehouse facilities for your operation?
- Will you need parkingfor your employees or customers?
- Are you comfortable sharing the space with another business or do you prefer having a space just for yourself?
Location, Location, Location…
Location is key when it comes to renting any type of property, but for businesses, it’s even more important. Depending on the type of business you are planning on however, there are some key considerations to make.
Though you might have your eye on the perfect, high street, retail premise, this might be an unnecessary cost (and burden) on cash flow if you predominantly operate online. Similarly, and vice versa, if you are planning on setting up a takeaway, you might not want to lease a premise in an industrial estate!
Some key things therefore to keep in mind when it comes to shortlisting a location for your business premise are –
- How will your client’s primarily find you? Online or at your premise?
- If your business is client facing, check what average foot fall is like on different days and times to ensure consistency.
- If you are a retail or distribution business, would your suppliers have easy access in and out of your premise?
- How many of your competitors are located around the same area? For example, you might not want to open a hair salon on a street where there are already three established ones!
Unless you are from the locality, don’t just rely on what the Landlord says and seek advice from a local expert if necessary. This also applies if you want to expand your business to a new location.
Details to discuss with the Landlord
Most commercial Landlordssimilar to a residential Landlord, would use a commercial letting agent to market and find a suitable tenant for the premise. There are however instances where the Landlord would himself decide to manage the letting process.
When a potential tenant makes a bid on a premise, the bid would usually entail other details such as the proposed term of the lease (how long the you would like to take up the lease for), break clause suggestions, rent free periods, deposits, warranty details, so on and so forth.
The Landlord will then either accept your bid as is or revert with counter terms. This process continues until both parties have agreed on terms (Heads of Terms) following which it is now time to instruct solicitors.
Do you need help from a Commercial Lease Solicitor?
In theory, it is possible to do your own conveyancing, but keep in mind that it is time-consuming, and more importantly, risky business. Commercial Conveyancing is an unregulated part of property law, meaning, you have little to no recourse if things go sour.
Your conveyancing solicitor will also almost always renegotiate the terms of the Heads of Terms on your behalf. The Landlord and their solicitors would be initially drawing up documents which are always favourable to them and usually biased.
Once the above process has been repeated a few times, both your solicitor and the Landlord will hold an identical copy of the ‘agreed form of the lease’. This in effect is your final version of the document which both you as the tenant and the Landlord will sign.
You can now start operating and trading from your premise!