As a new business owner, buying a new business space is a rollercoaster of mixed emotions. You are nervous for the future, on-edge because you are looking for the right price, and excited for a new start all at once. This can lead to many unwanted impulsive buys and unnecessary emotional decisions. Known as commercial real estate, we have to understand that there are many factors that go into this area of owning and running a business. Overall, it’s more about being able to avoid mistakes than it is making the right decisions. With this in mind, it is never a bad idea to take advice and tips on the best way to purchase the right building. More importantly, when we think about it, buying a new space can either make or break your new business. As the saying goes, “It’s all about location.” Simply put, choosing the right building is crucial to the success of your business. So, with all that being said, here are 10 tips for purchasing the right building for your new business.
Tip #10: Hiring A Real Estate Agent/Firm
While it’s cool to say that you built a business from scratch, from the ground up, sometimes it’s a better idea to relinquish some duties to more qualified professionals. Well, when it comes to commercial real estate,hiring a real estate agent or firm is one of those times to do that. Frankly, there shouldn’t be much thought into this decision other than to understand the fact that real estate firms know more about real estate than the average business owner. In fact, this process can be as simple as searching for your local commercial real estate agent in Cincinnati, for example.
Tip #9: Do Some Inspection Work
One of the most missed tips when it comes to buying a new building for your business is doing some inspection. Now, this doesn’t mean checking out how nice the building looks from the inside and out, this means doing actual research of any prior damage and other similar situations. Not only does this help you avoid problems in the future, but it can also save you money since finding any actual damage or disturbance with the building devalues the building.
Tip #8: Identifying The Appropriate Building Size
Depending on the size of your business, it might be best to look into getting a smaller or cheaper building. In fact, identifying the appropriate building size is also another way to cut down on costs. If we look into it, there is no need for a small business of around 10-20 people to work in a building fit for 200. In the same breath, you also have to consider how fast your business can grow or is looking at growing into. In that case, you get a pass in getting a bigger building size.
Tip #7: LLC Your Business Before Getting A Building
The reason this is a great tip is that it allows you to own a building under the name of your company. Believe it or not, there are preferences given to owners of an LLC business over owners without one when it comes to purchasing a building space. In extreme cases, it can mean the difference between paying thousands of dollars more for a building compared to paying around value price. In general, there are more advantages to owning an LLC business as opposed to not.
Tip #6: Save More Money Than What You Think You Need
Not having enough money is another of the most commonly made mistakes in commercial real estate. In many cases, business owners who have around 50% of what their building costs, immediately the go after loans to pay the other half. While this could work, it is far more beneficial to save for and, have extra when it comes to buying a building. While this can take longer, it will benefit you as a business owner in the long run.
Tip #5: Bring In A Lawyer
As we can see, buying a building can be quite the process. It can even be overwhelming to some business owners. By bringing in a lawyer, specifically when it comes to signing any contracts, you make two important things happen. One, you save yourself from any legal problems that may arise in the future. Second, you have the benefit of finding any loopholes in a contract that can work out in your favor. As a matter of fact, you shouldn’t even consider buying a space for your business without first looking at working with a lawyer.
Tip #4: Knowing The Type Of Building You Want
While this tip is similar to knowing the size of building you want, it’s different in several important ways. As far as identifying the type of building, we are talking more about knowing the sector of commercial real estate. In other words, this means knowing whether your building is an office type, industrial type, retail type, or any other category your business falls under. Knowing this then helps you identify what building size best fits your business.
Tip #3: Considering Financing Your Building
Even though we discussed the fact that saving for your building is by far a better option, that option doesn’t always fit every business owners financial situations. In fact, most of the time, business owners need financing as a way of getting their desired building. As an overall rule, try to save more than the necessary amount needed to purchase the building. If this is not an option, don’t completely skip over financing as a way of getting the building.
Tip #2: Consider The Risks
As we’ve come to understand, there are many factors to consider when purchasing the right building for your business. As is often the case in these situations, there will also be many risks to consider as well. From financial burdens such as building costs and maintenance to other risks such as your business falling under, not being aware of the cons of buying a building can leave you in a bad place as a business owner. Overall, consider the fact that nothing is guaranteed in an industry as competitive as the business industry.
Tip #1: Enjoy The Process
Perhaps the most crucial tip of them all, it is of utmost importance to enjoy the process of buying a building. Despite the many factors we have just discussed that go into buying a building, even if you manage to follow these steps, not enjoying this special time as a business owner can be make everything feel as if it was not worth it. Worth noting, this is the last thing you want as a business owner. If you make a decision, it is best to commit to it and be proud of it. This goes for buying a building for your business.
Your Building & Your Business
One more thing we have to remember is that there is no perfect building. In addition to this, we have to also remember that owning a building as a business will not define how successful your business is or could be. That comes down to the professionals running that business. So, if you feel like you can’t find the perfect building for your business even after following these steps, it’s not the end of the world. In turn, hard work and proving your worth as a business can lead to investors buying a business for you.