In most cases the location of your business determines the level of success you will attain in that business, depending on the goods and services you render. This article tries to answer a vital question; Should You Buy or Rent Your Place of Business?
Locating your place of business in an area that is not easily accessible to many is a red flag in business; you don’t want to know the bottlenecks involved. In fact, it will be foolhardy to start a business in a place people can’t easily get to, what would be your excuse, really?
When your business is in a location that is in tune with people from all walks of life, then success is only a step away. It simply means your customers would not have to go through thick and thin to find you. You will automatically drive traffic to your doorstep without having to do much work
Invariably, finding the right spot for your business is key to your success.
What all of these mean is, you have to identify your demographic (who your customers are), where they live and work, and where they typically go to find the type of product or service you’re offering.
Siting your place of business in a highbrow area doesn’t necessarily mean that business will thrive. You can locate your business in Lekki whereas your customer base is actually in Mushin.
However, the location of your business is really not the pivotal point of this piece. The question that forms the core of the argument as posed by the topic is the issue of buying or renting a commercial space, which is more ideal?
Why I started first from the angle of location is because the availability of a property for rent or purchase will eventually determine the location of your business to some considerable extent.
You may want to locate your business in Ikoyi and then you finally opt for Lekki or Ajah because of non-availability of a commercial space to run the business
In summary, the right choice varies from one business to another. Here are some questions to consider:
What can you afford?
When you rent or lease a property for the sole purpose of business, you either pay monthly or annually. Albeit before you decide on the location of your business, you need to ask yourself these basic questions
- Have you considered all costs of running the business from that location?
- Is the cost of the property(whether you are renting or buying the property) worth setting up your business in that location
- Will this investment help your business grow over time?
How long are you staying?
Put some thought into how long you expect to be at the location where you plan to set up shop. Do you expect your operation to grow over time, requiring more space for staff, inventory, or production?
Leasing gives you the flexibility to relocate without incurring significant cost, and may be a better choice if you think you’ll only be at a particular location for a short time. If you are certain that your business won’t experience any dramatic growth, and that there are benefits to establishing yourself in one location to build awareness and customer loyalty, then purchasing a property may be your best bet.
What do the experts recommend?
As with any big decision, it’s always best to seek the advice of professionals and your support network. Speak with an expert in commercial real estate and/or a financial advisor to weigh the costs of renting and buying that property with reference to the location and future predictions concerning the business.
There is actually a whole lot to be considered when the question of buying or renting a property for your place of business as compared to when you only need the property as your place of residence arises. The latter has a more direct approach to it.
Making a choice between buying or renting a property that will identify your place of business is not a decision that should be made in a hurry. You really have to weigh the pros and cons and also analyze the short term goals as against the long term goals of the business.
Taking quality time out to assess your options will help you make the best decision for your business.