3 vital factors to consider before deciding on a new business location

Moving into new business premises can be an exciting prospect. Perhaps your startup now has enough cash flow to move from a bedroom business to an actual office, or you’ve had recent success with your business and need more space to expand your offerings.

No matter the reason, it’s important to check these three important factors before excitedly signing on to a new business premise. We strongly advise considering these as they could save you from making a very expensive mistake.

  1. Local competition

This is extremely important to consider. If you’re a small cafe looking to upscale, there’s very little point moving right next door to a Starbucks. The power of the brand name alone will drive customers there rather than a local cafe not many people have heard of in the area yet.

It’s all about finding that fine balance between moving somewhere that new customers will find you and not having too many large scale competitors in the same area. You also don’t want to move so far out of the way that it puts people off coming to your premises.

If you aren’t 100% familiar with the area you are considering moving to, perhaps have a walk or drive around the surrounding streets to see who is set up there. Take note of any major competitors and how busy they appear to be. 

The same goes for B2B companies – are there a lot of people going in and out of the premises for meetings? Is it obvious they are based there or does it look like a general office building?

  1. Proximity to new clients and customers

On the opposite side of the coin, you also want to be easily accessible to new clients and customers who may stop by just out of curiosity as the ‘new business on the block’. Being easily accessible by public transport and car can really help – bonus if you have free on-site parking, which can actually be a huge incentive. 

A good way to balance this and the above point is to be based slightly outside a major city centre, around a 10-15 minute drive, but still within a widely accessible range.

Although these sorts of premises do tend to be more expensive, they can actually increase the value of your business if you aim to sell one day. A prospective buyer will see that the location alone provides plenty of opportunities for new customers. You might want to consider checking the value of your business plus the potential new post code just to get a general idea.

  1. The flexibility of your contract

If you’re absolutely certain that this will be your business premises long term, and that you won’t need to upscale, a freehold can be an attractive option as the premise will eventually belong to you.

However, for startups and businesses with a growth mindset, a freehold can be the more attractive option due to its flexibility. Check the small print several times and ask a few more pairs of eyes to check it just to be on the safe side as there can often be hidden clauses that mention additional costs or cancellation fees.

Provided by Hammerschlag & Co., Inc.