You’ve heard the saying a million times before; location, location, location. Exposure for your business is essential for growth and longevity.
However, you also shouldn’t exceed your financial limitations, especially when first starting out. Every business is unique, and location importance may not prove as valuable to your company as other factors. Regardless of this, you need to determine whether or not owning or renting a commercial property for your business is the right move. There is no universally correct answer. Only the right answer for your particular West Michigan business.
Think to the Future
Before deciding on owning or renting, look to the future. Do you plan on staying in the given location for five, 10, 20 or more years? Additionally, what kind of staff would you like in the future? Will you need to increase staff members substantially if your business grows at a realistic rate, or can you increase production and sales without requiring more employees? These are important questions you need to consider before selecting the right property. If you have plans to move to a larger facility as the company grows, renting is the desirable option. However, if you don’t need to increase your business size, you won’t need to invest in more space or too many additional employees. The longer you envision a stay within one location, the more financially viable owning the property becomes.
Short Term vs. Long Term
Whatever the plans are for your business, staying in one location for short term points to a rental property. You don’t want to invest in owning the property only to move a few years later. Consider more than just the plans of the company. What kind of business do you operate? Restaurants and bars often have the shortest life span for business. Sometimes it takes multiple attempts to open a successful restaurant. Many restaurant owners rent their property due to this very reason. While you would like it to remain in the same location and open for 20 years or more, you need to know whether or not the market will support the restaurant, which means looking towards the short term is necessary.
Furniture Fixtures and Equipment
When investing in FF&E, you expect it to last for years. You will have more flexibility with the kind of FF&E you can invest in when owning the property. Some seating, tables and other internal equipment may require floor attachments. A landlord may not approve of this kind of FF&E. You will need to discuss certain equipment and furniture aspects with the property owner ahead of time. So, if you’re looking for a particular design style for your business, owning is best.
No matter the kind of business you run or the property you’re interested in, you need an experienced and reliable commercial real estate broker to assist. This individual can show you available options within your price range and help connect you with the best rental or purchase real estate option in West Michigan.