Starting a Business: Acquiring Business Premises
So, you’ve decided to start a business. You’ve had the brainwave, seen an opening in the market and you just need to get the idea off the ground.
This is where it can get confusing.
The important part has been done (having the idea) but you might need professional assistance setting up. One of the most frequently encountered hurdles a prospective business will face is obtaining premises.
Your ideal premises may be freehold and require a considerable financial outlay at the outset. More frequently, a start-up business will prefer to take a lease, with rent to pay instead.
When weighing up the terms of a lease, you will need to consider:
- The extent of the repair obligations you are taking on. Your responsibility will often depend on what proportion of the building you are renting and the way a repair clause is worded can have major implications on the cost to you of putting the property in order at the end of the lease. You may wish to have a schedule of condition put together and attached to your lease.
- Your ability to sell the lease on if you find you need to move.
- How long should the lease be? Ideally, you want the landlord to commit to a certain term and rent so you can budget accordingly. You may also wish to have the option to end the lease early in case things don’t turn out as well as you’d hoped or, alternatively, your business thrives and you need to move to larger premises!
- Whether or not the lease includes an automatic right to renew at the end of the term.
- That you may need to budget for insurance and service charge payments as well as the agreed rent. Service charge is a payment collected by your landlord or management company as a contribution towards maintenance of the structure, the car park and other common parts of the building and it can add significantly to your costs.
This area of law is tricky, and requires navigation by an experienced person who can interpret what a lease doesn’t say, as well as what it does say.
Get in touch
If you would like help with any element of starting a new business or taking on commercial premises, please do get in touch with our commercial team or visit our Business Law page for more information.
You can contact me direct on 01271 818372 or via email at holly.durrant@bhrlaw.co.uk. As a former small business owner myself, I know just what it’s like to start out in business.
You can also get in touch with Brewer Harding & Rowe through the Contact Us Page, or by calling one of our offices.
Barnstaple - 01271 342271
Bideford - 01237 472666
Braunton - 01271 812033