There is no doubt that choosing the right location for your business can make the difference between success and failure. But the right location is not the same for every type of business. Before choosing where to set up (or move) your business, you need to consider the following questions:
- Who are my customers?
- Do I need to be close to my customers?
- Are my customers coming to me or will I go to them?
- Is passing traffic important?
- Does the location gel with my brand?
- Are there venues I need to visit often?
- Are there services I need nearby, e.g., transport, decent internet (this is a very important consideration for regional or rural setups), suppliers, etc.?
- Where are my competitors?
Lease, buy, or share?
Once you have found the perfect area to locate your business, you need to decide whether you will lease or buy premises, or share a working space. Sharing a working space can be a smart move for many reasons. It allows you to cut your overheads, reduce capital expenditure, and minimise risk because you don’t have to commit to any long-term leases. A shared workspace can be an office, clinic rooms, hair salon, art studio, or warehouse. When sharing a workspace, you have access to facilities such as a kitchen, restrooms, and reception. Sometimes, an answering service and office equipment are also provided. You would pay a licensing fee to use the facilities, but these facilities are not for your exclusive use. If you only use your room(s) on a part-time basis, then they can be rented out for use by another party when you’re not there. In this situation, these terms would form part of your arrangement and (ideally) be included in the written terms of your Licence Agreement. The downside of sharing work space is you don’t have full control or exclusive use of the premises. The landlord or other people renting the space can access the premises freely. Another disadvantage is you don’t get to choose your co-workers, and that could have a negative effect on your business in a worst case scenario. If you want more control over the space, then you will need to lease or buy your premises. Leasing gives you exclusive use and an interest in the land or premises that is second only to actual ownership. Entering into a lease is a legally binding arrangement–there are minimum terms, rent and other obligations that you must meet. Be aware that a lease and a licence are two entirely different transactions. A lease is classed as a registrable interest in the land with certain statutory protections to the tenant. It gives the tenant the exclusive use of the premises for a definite term and at a specified amount of rent. A licence is a non-exclusive right to use or occupy the premises in a certain way for a set fee. Whatever you choose to do, make sure you enter into the arrangement with your eyes open. Ask questions and be clear about what your obligations will be, particularly your monetary obligations – beware of rent/licence fee increases over time and any upfront costs or hidden costs as these can undermine your economic viability.
