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Renting premises

Negotiating the right deal for your business

Working from home is not always an ideal solution, even for the youngest of businesses. Do you really want customers to be eyeing up your three piece suite or stepping over toys and wellies?

Quote�Do you really want customers to be eyeing up your three piece suite?�End Quote

Having your own business premises can help boost productivity and provides a sound launching pad for your plans for expansion. After all, you can't attract and retain the best staff from your back bedroom.

So how do you find somewhere that's right for you and how do you cope with the red tape it involves? Weigh up where you want to be. Ask yourself some of these questions first:

How close would you like to be to your customers and suppliers?

How much space do you need?

Do you need specific facilities - say parking for trucks, or communications services?

A big step

For anyone taking on their first lease, the number one piece of advice is get a solicitor to look at the paperwork before you sign anything.

Les Owen, Managing Director of Sign Metals and Plastics Ltd in Birmingham, says that as well as seeking legal advice, your local Chamber of Commerce can also be very helpful when finding new premises.

And according to solicitor Roger Gough, of RS Gough & Co, you should also seek advice from your accountant – can you really afford your desired base?

A foot on the ladder

"If you have no trading history then you may need to call on friendly suppliers to give you a reference when you want to move into your first premises," says Les.

"Your new landlord may also want a personal guarantee as security for their peace of mind that you aren't going to leave them in the lurch. They may only offer you a three-year lease as a maximum if you are a new company.

"But always remember negotiation is key. Treat getting a business premises as you would finding a new home. Whether or not you are going to be responsible for the repairs, get a surveyor in to make sure you know exactly what you are taking on.

Quote�If you haven't had a surveyor in when you first moved in, you could be taken to the cleaners!�End Quote

"When your lease is up, you'll be presented with what's called a schedule of dilapidations – which the landlord will tell you lists any damage or wear and tear that has happened while you've been there. If you haven't had a surveyor in when you first moved in, you could be taken to the cleaners!

"I leased premises for ten years before deciding to buy the building where we are now. Commercial property is an excellent investment and you can find out about buying as part of your pension."


Whilst leasing is the most popular accommodation solution for new businesses, there are other options to consider:

Working from home: great if you're not image conscious, but useless if you're not good at managing the work/life balance

Serviced offices: very glamorous but often cripplingly expensive

Buying a property: obviously expensive at the start, but potentially a great investment

The true cost

Never forget that your rent is only part of the cost of leasing a business premises. Ask about additional costs including:

Service charges

Power and energy costs

Any shared maintenance bills

Richard Lyons of Dunham, Guest & Lyons solicitors, underlines Les's advice. He says points to put on your checklist include:

Length of lease

Liability for costs for preparing the lease

The identity of what is to be leased

Stamp duty


Level of rent - is the amount in the document the rent agreed to be paid? Always remember it's the words in the lease which bind the tenant

Are there provisions for rent review?

Richard adds to his last point: "This is a desperately important subject. A tenant will be committing himself to future increases in rent. Specific advice about rent review provision is essential. Landlords want upward-only rent reviews."

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What next?

Business Link has a number of case studies featuring businesses that decided to rent premises. Learn from their experiences!

Stuck in unsuitable premises? Our advice will show you how to escape from the lease.

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