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One of the most challenging aspects of running a business is selecting a location. Factors such as the type of business or industry, accessibility to roads and highways, closeness to vendors or partners, and zoning regulations should be considered. Additionally, securing funding for a business location can also pose challenges.
These are some of the factors that must be carefully considered to ensure the business is well-positioned for growth and success. In this Balboa Capital blog article, we explain how to choose and fund a business space
Visit potential sites for your business.
After identifying potential locations for your business, it is important to see them in person. Reach out to the relevant parties, such as property owners, leasing agents, or real estate brokers, and schedule an in-person tour to explore the property. When you visit, take time to evaluate the layout, features, and condition of the space.
If any changes are needed, such as adding walls, expanding a space, or upgrading the plumbing, you will need to consult a contractor. They can help you understand the associated timeframes and costs.
Conduct a feasibility study
When you’ve compiled a shortlist of promising locations for your business, selecting the right one can be difficult. That’s where a feasibility study can help. A feasibility study provides an in-depth overview of the proposed location and assesses its immediate and long-term viability. The study examines various factors, including building costs, economic forecasts, market demographics, competition, accessibility, and return on investment (ROI), among others.
The results of a feasibility study enable you to learn the strengths and weaknesses of various business locations, allowing you to understand how each option aligns with your business objectives. This information can help you make an informed decision regarding a location for your company.
A feasibility study is a research-driven and time-intensive task. There are feasibility study templates and guides online that can help you create your own. If you lack the knowledge or the time to complete the study, consider hiring a business consultant.
Negotiate the agreement
Once you pick a location for your business, it’s time to engage in negotiations regarding the commercial lease agreement. This process involves clearly understanding the terms being offered, including rent costs, the duration of the lease, and any additional fees or responsibilities associated with the property. Commercial leases are priced by the square foot and are based on factors such as local supply and demand, as well as vacancy rates. That said, it is worth trying to negotiate a lower lease term with the property landlord..
If you plan to purchase the property and need commercial real estate financing, it would be beneficial to consult a business banker and begin the application process, as it involves gathering a wide range of documents. Additionally, commercial real estate financing can be used to expand or renovate an existing business space.
Move to your new business location
Once you have officially moved into your business location, it’s essential to let people know. You can do this by updating your business address and contact information on your company website and all online business listings. If your business uses social media, consider posting an update to announce your new business address.
Finally, don’t forget to update your address and contact information on all correspondence (e.g., stationery, business cards) and your business insurance policy, business bank account, business license, and any other relevant areas.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations of any kind for any individual or entity. Readers are cautioned to seek the counsel of their accounting, tax, legal and other advisors. Balboa Capital does not endorse and is not affiliated with any of the companies or organizations listed in this article.