It’s a time honoured cliché but when looking for a property, be it residential or commercial, there are three things that you must take into consideration before anything else – location, location, location.
When looking to relocate to new business premises, or acquire additional premises due to expansion, the issue of location becomes more than just one of a ‘gut feeling’. Your new commercial property needs to meet the needs of your business, both in the short and long term.
And it’s because of this that planning is of prime importance. Business owners need to take a look at where their firm is predicted to be within 5 or 10 years, because if the location is only going to work for the next 12 months, there is simply no point in considering the property at all.
Not forgetting that it’s extremely unlikely to secure a commercial property with such a short term lease, the expense of relocating could seriously eat into a business’ profits.
In this article, we’ll take a look at a few typical business models, and how a closer look at location can help avoid some major business issues later on. Naturally, as leading commercial property consultants in London, our team will get to know all we can about the needs of your business. We’ll talk about where you are now, and what is – and perhaps more importantly – is not working for you in your current location.
Armed with that knowledge, we’ll be able to help you source the perfect location for your business. It’s reassuring to know that you don’t need to do any of the homework, but if you’d like to, here’s our advice on how to get it right first time.
Although a location may seem perfect in the beginning, it is essential that you can ensure your business’ success in that location for the foreseeable future. As leading commercial property consultants in London, we know exactly how to help you find the perfect location for your business, so here’s our advice for getting it right first time!
Take a Look At Your Finances
Sharing a postcode with other well regarded companies can do wonders for a business’ profile. In a bid to work with higher profile clients, many firms will look to trade off on their location.
Indeed, such thinking has given rise to the popularity of virtual offices. For example, Soho in London’s West End is well known to be home to a large number of media production companies, particularly those working in television.
Many production companies simply cannot afford the high rents associated with that area, and so utilise a West End address on all of their marketing literature and stationery.
But of course, many firms actually require a physical presence in a particular area, so whilst it may seem like the most obvious question – can your business actually afford it?
The sad fact is that many companies run into trouble because they over extend themselves at the outset – falling in love with a location which will only work for them if every single other aspect of their business works perfectly – it’s optimistic at best, but delusional at worst.
What Are Your Needs?
Aside from the physical building, you will also need to establish whether the actual location of the property will meet your business needs.
Let’s say that the commercial property that your business is considering is an office space. Your firm needs desk space for 100 employees plus meeting rooms and staff breakout areas.
You would have the option of taking a self contained office unit which provides all of these facilities, or you could consider taking one or two floors of an office building that’s playing home to multiple tenants.
But what are the considerations from the perspective of location? First and foremost, your staff need to be able to reach the office comfortably. This means being positioned close to public transport links, and whilst it is also valid to provide adequate parking for your people, many members of your team might not drive, or would simply prefer not to spend their mornings and evenings stuck in traffic, so being within a half mile’s walk of a station would make any commercial property unit particularly desirable.
Bear in mind that it’s not just your members of staff that need to be taken into consideration here. Your firm needed meeting rooms, and that may well be because you regularly welcome clients into your offices. If reaching you becomes problematic for them, they may eventually take their business elsewhere.
Thinking about location is important for any business, but none so much as when it comes to retail. Opening a store without fully investigating the area can lead to disastrous results.
First, you need to take a look at the rise and fall of other shops within a one mile radius of the unit that you’re considering. How many new shops have opened in the area in the past three years, and more importantly, how many have closed down?
It’s no secret that the high street is suffering at the hands of on line retailers. It’s important to move into a shopping district which is buoyant and witnessing exciting changes.
If the centre of town is about to be pedestrianised, it may well be because the road infrastructure in that town can no longer cater for the growth in population of both residents and visitors. This is a clear indication that a retail unit in this location will be well positioned to take advantage of an increase in foot traffic.
Conversely, if one end of a high street has a number of vacant units available, this could raise alarm bells. How often have you looked at a new shop opening up and thought to yourself that they’re going to fail, simply because you’ve seen three other businesses suffer the same fate in the same location?
Now that is not to say that location was the crippling factor for those businesses, but it is crucial that you investigate the failures in an area, just as much as you look at the successes. You may well think that you have a business model which is unlike anything that this town has been before, but don’t allow yourself to be blinded by ambition.
If you’re looking at opening a restaurant, then it’s likely that you will have found a commercial unit which has already got the classification for a restaurant, which is A3. Yes, not all restaurants open on the site of previous restaurants, but because reclassification takes both time and money, many business owners seek to avoid the additional complication.
In the case of restaurants, it’s important to consider the location in terms of its demographic. If, for example, your restaurant is located close to a lot of offices, then your lunch time trade is going to be substantially busier than your evening trade. The same is true if you’re located on a busy high street, where you’re likely to attract impulse diners throughout the day.
If you’re situated closer to large residential neighbourhoods, then it’s more likely that your evening trade will be busier, and of course this can mean each customer having a higher value, as they’re more likely to treat their meal out as an event, rather than grabbing something very quickly in the middle of the day.
For those businesses working in logistics, the question of location is tied intrinsically to the question of access and transport. Warehouses that form part of a national distribution network will need to be located close to motorways, whereas those concerned with international distribution will need to be closer to either airports or sea ports, depending upon the nature of their merchandise and its size.
Many warehouses are in somewhat remote locations, and this can be a problem, as it means that staff have to travel long distances in order to get to work, so it can be important to strike a happy medium here.
It’s important to look at the competition to your business that exists within the area. Competition is not necessarily a bad thing, as rivalries between local firms can cause each business to improve its range of products and services in order to keep up with trends in the market.
Moreover, there are often synergies which exist amongst competitors; each one recognising that they don’t pose a mutual threat to each other but do, in fact, bolster the local economy simply by not allowing the other party to have a monopoly.
And will that bolstering actually mean that your business is set to grow? If so, then your new premises will need to take that into account. If, from day one, you’re utilising every square inch of space within your property, then you have no room for expansion, and that means either consolidating assets – which can include staff, or you’ll be looking for new premises very quickly.
If the location you’re considering offers the opportunity to expand, then you’re in luck – but be mindful that your landlords could be looking to fill that empty space with additional tenants, which could prove to be problematic later on.
If you are finding it difficult to make a decision on whether a property is right for your business or not, feel free to get in touch with our experts today. We’ll be more than happy to advise you – or even help you find a better property that is more suited to your needs.