How do you choose a commercial space for a growing business?
The start-up stage of your business is behind you. Now that your business has gained momentum, it’s time to rethink your strategy for your retail space.
Among all the decisions you have to make to support the growth of your business, the choice of your commercial space is a very important one. In this regard, here are some thoughts to guide you.
Analyze your activities to determine your space needs.
After some time in business, you have a better understanding of your company’s needs and you certainly have a good idea of the growth that is coming. Do you simply want to consolidate your place in the market or do you want to grow your business further? The answer to this question is an important starting point in guiding your choice of retail space. To ensure the growth of your business, it is wise to plan to move into a slightly larger space that can meet your needs in the short or medium term. Be careful : don’t choose a space that is too big, and probably too expensive for your current financial capacities, if you don’t think you’ll need all that space soon. Your profit and, by the same token, your capacity to grow at the desired rate will decrease under the weight of too much expense.
Should you lease or buy your next commercial space?
The answer to this question obviously varies from company to company. Despite your growth projections, the first consideration is your company’s financial capacity and cash flow. Buying a commercial space is more expensive than renting and can create uncertainty due to interest rates. It is certainly easier for an established business to meet these obligations and qualify for a loan from a financial institution. If your business is not yet strong enough, you may want to consider leasing. In addition, buying a commercial space may be an attractive option if you plan to stay in one location for a long time. Otherwise, leasing may be more appropriate. To help you in this decision-making process, it is important to surround yourself with experienced advisors who are aware of your situation, such as a real estate broker and a mortgage broker who specialize in commercial real estate. Business life is punctuated by decisions and risks. Real estate is one of them, for better or for worse!
