Starting a business at home leaves you with very few overheads to account for. This is a great setup for many people, especially working mothers who want to get their careers back on track! It’s a flexible way to live and work at the same time, and you can still turn a very good profit whilst never needing any traditional business assets.
That being said, there may come a time when your home business gets a little too needy for your home. You’re running out of space, you can’t quite get any privacy, and you’re needing to meet more and more clients face to face. When you think about it, your home just isn’t cutting it anymore!
That’s when you have to make a hard decision: to invest or not invest in commercial property. Most home business owners try to put this off for as long as possible, but when your growth is telling you it’s time to move, it’s best not to ignore it.
Which is why we’ve come to you with a post like this. If you’re new to the world of commercial real estate and you want to be sure you’ve got a good understanding of what it’s going to cost you, check out the guide below.
Photo by Photo By: Kaboompics.com
You’ll Have to Start Accounting for Business Rates
Commercial property comes with a lot of costs. There’s the usual when buying a new property, such as taxes and stamp duty, as well as estate agent and legal fees. These are all costs people often know about in advance and have the budget there to account for.
But there will also be a cost you may not have heard of before – or at the least, not have had to pay before: business rates. These replace the council tax levied on residential properties in the commercial world, and you can usually pay them month by month.
You can also apply for a relief on the tax, if you’re a small business and your property’s value has been found to be below a certain level. You’ll want to do some research here to find out what your property investment is likely to be rated at, and you can always contact the council you’ll be operating under if you’re not sure how to proceed.
You May Not Get a Location You Really Like
We mention this now so we can say that the cost of a dream office or shop location is going to be quite high. As such, you may have to ‘downsize’ your dreams a little and find a place that’ll actually work within your budget.
That could mean having less visibility from the street, having less space within the building than you’d really like, and not having the kind of view or facilities you really hoped for.
Of course, compromising too hard on these things will mean you’re right back to square one. If moving your business out of your home means you’re not going to get a better working setup, there’s no point in doing so in the first place!
That’s why this is such a careful balance. You need to see some clear pros in order to put an offer in, but be prepared to accept a couple of hard cons.
You May Need to Renovate the Space
And then we come to the behind the scenes work. The cost of a commercial renovation will account for all of the hidden things like plumbing and the electrics, and that’s going to cost you a big amount of money if you’re unprepared.
After all, the property itself may need accessibility and convenience features added to it. It may also need a boost to its utility system. It’s not just a matter of putting some new flooring down and making sure the walls are painted – your budget has to go just as deep.
Thankfully, there are a few ways to cut the cost of a job like this.
Firstly, head to an electrical supplier who sells goods wholesale and check if they have the parts you need. You can work closely with your contractor for this, to ensure you’re selecting the right cables, wires, switches, and fixings, and still have some budget left at the end.
And speaking of contractors, make sure you’re working with one experienced in commercial projects. You need to know they understand how different commercial work can be compared to residential undertakings. It’s also nice to know that the price they’re quoting is going to come with real value!
You Can’t Let Maintenance Wait
When it comes to your home, a bit of maintenance work is easy to put off. You can notice there’s a hole in the wall or a cracked tile and think you’ve got plenty of time to take care of it. And that usually works; many people don’t put their DIY skills to the test immediately after noticing small issues like these.
In the commercial world, however, maintenance cannot wait, especially if you have employees relying on you as well. You need to prioritise maintenance and repairs above all else, if only for the reason that the longer they go ignored, the more value they’re going to drain out of your investment.
And remember, in a commercial setting, it’s best not to try DIY in most cases. You’ll want to ensure your premises are always up to code and you’re covered by both the law and your insurance. This often means hiring a professional to do the work for you, or relying on your policy to recommend the best course of action. Either way, you may have to pay out of pocket for this work.
If you need to buy a commercial property for a home business that’s rapidly expanding, make sure you weigh up these costs very carefully. They’ll help you ensure you’re not wasting money or overshooting the budget, and they can let you know instantly when a commercial investment would be nothing but an expensive mistake!
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