If you’re about to start your business and need premises, or have started up successfully at home and now need space to expand, this is an exciting time!
Moving into an office or retail premises for the first time says something about a business. It can make your operation seem more “real”, meaning your dreams are actually happening.
But getting premises brings a new set of pitfalls. You shouldn’t allow these to put you off; rather keep an eye out for things that could sour the experience.
The true cost of premises
Compared to working from home, the costs of premises can be huge… and not just the rent or mortgage. At home you have the advantage of using existing resources. You can use your existing broadband, desk, phone and computer. Yes there are the extra costs of phone calls, heating and electricity, but you don’t need new accounts.
In your own premises you will need to get phone lines installed and pay for broadband access. You will have to commit to contracts for the supply of energy (and some of the utility companies will try to get you to sign up for 18 months or more). There are rates to pay. You’ll need extra contents or office insurance. And even the costs of running your car will go up if you have to drive to work.
Watch out for costs increasing over time. Lease agreements may include options for the rent to be reviewed annually. And if you are locked into long agreements with utility companies, you may find you’re not getting the best deal over time.
Set up costs
The infrastructure of setting up your first premises can also be high. Office furniture or shop fittings soon add up (although like anything, do some research and shop around, and you can save a fortune). You may need to invest in IT infrastructure, such as installing a local area network to link all the computers together, and maybe a server and new PCs. Don’t forget the little things like getting a vacuum cleaner.
Just as when you buy your first home, the true costs of moving into premises for the first time can be a surprise. You may find your phone company which quotes £10 a month line rental then puts you on a £50 a month payment plan for your first six months (because they don’t know what level of phone calls you will make).
It’s smart to have some money in reserve, and keep a very close eye on your cash flow during your move.
The costs of moving premises
Just as when you move house there are certain moving costs that are hard to avoid. If you are shifting furniture from home to an office you will either need to hire a van or find a removals company.
You may also need to get stationary reprinted with your new address, update your website, and spend some time and money telling clients and key suppliers that you have moved.
Thinking too big or not big enough
Before you sign a lease think through why you need premises and whether the ones you are looking at really fit the bill. If you need a shop, is it going to hold enough stock to cover the likely bills? Is it in a good enough location to attract passing traffic?
If it’s an office you need, does the space fit your business plan for the next few years? If your plan is to hire three more people next year where will they sit? At the same time, beware of committing yourself to an office that’s too big now. You could be rattling around in a huge office paying a fortune for wasted space. This is what makes serviced offices attractive. Many have different sized offices within the same building, meaning you can upgrade as you grow without having to change address.
Getting the timing right
Moving premises can cost you something much more expensive than money – your time. To get everything happening when it’s supposed to is difficult, and requires you to be both organised and an excellent project manager.
Little things can quickly throw you out and threaten the continuity of your business. For example if you have a new phone line and broadband put in and the phone engineers discover a problem, you could find yourself open for business on day one with nice shiny premises… but no means of contacting the outside world.
In your premises planning assume the worst will happen and have a backup plan.
New things to think about
One last set of potential pitfalls is things that you haven’t had to think about before. These include things such as risk planning – where will you and your employees go if your offices are uninhabitable because of a fire? How will you get your data back if you are burgled? How quickly will your insurance pay out? Where will you go if your landlord serves notice?
It’s also important that you are aware of the various health and safety issues that you may become responsible for. The Health & Safety Executive has a useful set of downloadable guides to health and safety regulations here.
These seem scary. But like most things, if you can think and plan ahead, you could find moving into premises for the first time is a pleasant process.
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