Given that taking on a lease can be a huge financial commitment for a small business where every penny counts, Sarah has provided some top tips on what to look out for in a business premises before taking on a lease to help avoid dissatisfaction at a later stage and; how to get out of an existing lease as cheaply as possible if their commercial premises isn’t meeting current requirements.
1) The leap from moving a business that started in your home to office premises is considerable. With leases typically lasting five years, this is a huge commitment for a small business. So it’s worth considering temporary office space until your business is at an established level.
2) Before taking space, check if the landlord can rent out by floor so when your business grows, your office space can too.
3) Landlords will rarely upgrade or refurbish an office with tenants in the property so make sure you’re happy with the current status of the property before moving in.
4) Check whether the premises has the most up to date infrastructure for your needs. For example, raised floor for sockets, suspended ceilings for broadband; speed and adaptability of broadband and other technology.
5) Leases typically last five years. If this is too much of a commitment, tenants can assign the premises to another business during this time. But be aware that some new tenants might be unwilling to assume building dilapidation liability (and the costs this could bring) if taking an assignment of the property for a shorter period.
6) Some businesses may want to downsize. It’s worth checking if the office space can be sub divided to another tenant or it would be worth contacting a local business organisation to see if it would develop an online forum, whereby businesses can talk directly to each other about swapping premises.
7) It can be tempting to move if unhappy with the premises, but before taking that leap, businesses need to consider Stamp Duty Land Tax (which can be considerable); potentially losing employees if the new location is too far away and the practical costs of moving – all could have a huge impact on the business.