Tuesday, December 16, 2014

Size & location

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     from experience in small businesses.

     Renting the space you need for your business can be nerve-wracking. Size and location are two of the main considerations. Cost is another concern, along with length of lease and landlord.

     Location: Some businesses can be run out of your garage. Others benefit from a high traffic location. Still others are unique enough that your clients/customers will seek you out, no matter where you are located. And then there are those that only ship out to fill incoming orders.

     Consider locating or expanding your sporting goods store in a farmer's country barn. A used car lot might benefit from being located on a busy thoroughfare, but a travel agency can attract people to a website in your home office. A frozen yogurt operation can do well on a small town's Main Street or in a mall, but a shop that machines widgets can be just about anywhere.

     Two things are of major importance when considering location--your business plan for the future and pertinent zoning regulations. Is there a location impact in your plans? Is the neighborhood in transition--where is it headed? Are there plans afoot to raze the building in 3 or 5 years? Talking with a local real estate professional can provide some answers.

     Size: Some business owners walk into a prospective space, make an intuitive guesstimate about the size, and sign on the dotted line. A much more prudent approach is to look to your business plan. 

     If you are opening a restaurant, what's the number of tables you need to generate the income you've projected in your business plan? What percentage of the tables will be filled? If you are performing accounting services for clients, how much space do you need as you hire additional employees? 

     If you are a therapist or chiropractor planning to expand into a wellness center in the future, can this space accommodate those plans? Will you need open spaces? A big reception area? A series of offices? Will you be able to expand here or will you be searching again in 3 years?

     Every business needs space in which to operate. Even a virtual business operated entirely on the Internet requires a place somewhere to operate--and I don't mean making calls and contacts over the Wi-Fi in the local cafe. Translate your current and future business plan into a floor plan that will accommodate today and tomorrow. 

     Elsewhere in this series, I have discussed how to negotiate with a landlord. Even if you work at home, you need to set aside space and pay yourself some rent--talk to your tax professional about how to do this so you don't run into problems later on. 

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