Once a business has grown enough that it cannot be run from a garage or extra room in a house, owners must make a decision: rent, or buy? A wise decision takes into account a variety of factors that may conflict with each other. Here are some of the considerations businesses should include in their decision-making process.
* How big is the business?
The size of the business can influence whether renting or buying is the right choice. Smaller businesses may not be able to afford the up-front cost and long-term expenses related to buying commercial office space. Further, owning the office space means that the business is responsible for the cost of maintenance and necessary upgrades. By renting, smaller business can avoid the potentially prohibitive cost of ownership by accepting the slightly higher monthly cost associated with rental.
* Will the office space be sufficient in the future?
Another factor that must be considered is how quickly the business is growing; will the office space be sufficient for long enough to justify a purchase? The cost and hassle that arises when a business sells its existing office to move to a new one can be expensive, and many businesses simply decide to remain in cramped quarters longer than they should. Rental provides the flexibility to change locations once the lease has expired or even earlier for a relatively small fee. This flexibility can be crucial for businesses that may need to hire additional employees to keep up with demand.
* Will the business move at some point?
Businesses that have clients over a wide geographical area may considering moving to a new location in the future. Internet-based businesses in particular can benefit from the flexibility that rented commercial office space provides. There are a variety of reasons that a business might consider moving, including lower tax rates and a desire to market their services toward local clients. A business that operates with clients in their current region, on the other hand, will often do fine in a fixed location.
* How is the commercial real estate market?
In many areas, the value of commercial real estate is growing rapidly. Businesses that operate within these regions may wish to consider the investment worth of various office locations. Even businesses that may require flexibility in the future might want to consider purchasing, as they may be able to make a profit if they move. Businesses should be advised, however, that the real estate market is sometimes fickle and difficult to project. Conservative business operators may be uncomfortable with the prospect of losing money if they decide to move.
The decision to buy or rent is difficult, and it can have major ramifications on a business. It may be worth hiring a consultant to help crunch the numbers and make the right decision for a particular business. Fortunately, there are a wide range of options available for both buyers and renters, and businesses in medium-sized locations should be able to find an acceptable commercial office space regardless of which path they choose.
This post is brought to you on behalf of Talbot Court CorporateStudios, offering furnished and modern office spaces for businessowners in London Ontario. http://www.talbotcourt.com/