Any Small Business Planner will tell you that starting a new business will involve spending money. Sometimes a lot of it. So now you’re planning to spend money. You’re planning all the material goods you may need – from a pencil to your premises – and everything in between. This is the time to be conservative and smart!
Startup expenses for a business can add up quickly and almost always exceed projections. This is the time to be conservative. Wildly extravagant expenditures on everything from office leases to the latest and most expensive IT toys are a potential disaster. Minimise your costs and risk by making a hard, cold analysis of what you need and being ruthless when crossing things off your list. You can always upgrade when your new business has started to make a profit.
A small business planner will tell you that your location should be a priority. Signing a lease and paying rent is a financial burden – but a part of doing business. Signing a lease and paying rent in the wrong location is a financial disaster – and can signal the end of doing business. There are certain criteria to consider when you are selecting a location. Ask yourself:
- What exactly does your business require from its location?
- Are you convenient for your customers? Can they get to you easily? It’s no good being located in a place that is cheap to rent but inaccessible.
- Parking is a vital consideration.
How about employees? Can they get there easily?
- Have you room for inventory storage?
- Does the location comply with zoning, safety or health laws, etc.?
- How’s the security – for your business, customers and employees?
- What about future growth? Will the present location still be appropriate?
List any negative aspects of your location that can affect sales. Try to find solutions. Reconsider if you cannot resolve the negative aspects.
More Insights: Successful Business Planning for Startups: 9 Must-Do Steps
A small business planner should advise you that you should resist the glamour of high-profile buildings and locations! In most cases, renting less expensive premises in another area is better than moving up to more up-market premises when your business starts to make a nice profit. However, the opposite – getting too cheap a place – can also cause a problem. You might save money but find it doesn’t suit your business image or appeal to customers. If you are renting, ensure you have a good, written contract lease agreement. It must specify all the details: length of the lease, rent increases, the due date for rent, conditions, etc. it’s well worth running it by a lawyer before you sign.
Also, think about the length of your lease. The cost of moving (both financially and concerning losing customers) if you relocate at the end of a short lease may be enormous.
In Case You Missed It – Here is some more Advise from JTB, a Small Business Planner: