Whether you’re looking to expand your business, start a business, or invest in an income producing property, making the correct commercial investment is a risky and an extensive process. Investigate and analyze the potential commercial buildings to ensure that your investment is safe in the long run. This includes the land value and improvements required, as well as the lease criteria if applicable.
Now we have determined some questions that you should have in mind when choosing a commercial building. Here are some steps to ensure that your investment will be advantageous to your business plan and goals.
The type of business you operate will determine the commercial building you need in order to be successful. If you’re a retailer, it would be in your best interest to have a building with sufficient parking, pedestrian traffic and an attractive interior.
For a warehouse or manufacturing business, décor and busy areas are probably not required for the success of your business. Instead, think about zoning regulations and proximity to potential employees’ homes. If your industrial building is over an hour away from your labour force, you probably won’t be able to retain employees.
Finally, if you’re looking for a suitable office space, being located in a pleasant corporate setting would be beneficial. Somewhere so that employees will be able to network, have access to public transit and find a decent place to eat lunch will result in an enjoyable working environment. The Business Exchange has many commercial building listings to search from.
Now that you have chosen the building and location that satisfy the needs of your business, you need to decide if the building requires modifications or improvements. Also, you need to determine who is going to pay for these modifications.
If you decide to rent, and the premises need modifications, you can negotiate these terms with the owner. When negotiating, make sure you explicitly state in your lease: what needs to be done, the deadlines for the modification(s), and the penalties for not completing on time.
If you’re buying your property, make sure you employ an accredited inspection company to evaluate any potential defects. Any safety hazards, environmental risks etc, need to be outlined to avoid future headaches. These defects can also be used for negotiation purposes with the seller.
Taxes and utility costs vary between different cities. Some cities and areas cost a lot more than others. Make sure you consult with your commercial real estate agent to discuss taxes and utility costs required to operate your business.
It’s important to realize your future growth plans. If you forecast that your company is going to grow/expand in a relatively short time frame, making sure that your newly acquired facility has some extra space is a good idea.
On the other hand, if you don’t plan on growing anytime soon, there is no use in paying extra for more space when you don’t need it.
When entering the market for a commercial building, it’s easy to get overwhelmed by all of the options available. Developing an “essentials list,” for features that are essential to your business and separating your desires is a good practice to implement.
Once you have made your essentials list, grade each component on a scale of 1-10 based on importance. For example, if you have a big loading dock it will be rated a 9 or a 10 but if your business doesn’t receive a lot of big shipments, the relative importance should be a 2 or a 3. Do this for every feature and add up all the scores. The top three highest rated buildings are the ones you should consider when making your decision.
Shalini Madhav “Choosing a Commercial Property,”