The purchase of a new, larger business facility or extending the current one is often the first indicator of expansion and success for many small enterprises. It is one of the first pieces of advice given in articles about successful business development because property remains a sound investment for many companies that are able to make the move. However, if you believe you are in a position to purchase a larger business location or make your existing one bigger for your expanding firm, there are a few things to consider. Here, we take a look at some of them.
Make sure you have considered the growth of the industry
You must first comprehend the potential growth within your industry before you can reliably estimate your potential business growth. You may be experiencing exponential growth in your own firm, but if the industry as a whole is starting to collapse, this is likely to have an influence on yours at some point in the future. You can execute contingency measures if you notice a market drop for your goods or services before you feel it yourself, which may involve delaying the use of the property to develop your business until you can guarantee more stability.
Make sure that you understand your own business growth
You can focus on your own company once you are secure in your industry’s stability or growth. Many business owners are tempted to cash in on a profit spike; however, this can be deceiving and perhaps unsustainable. Consistent, steady growth is the best position to be in to develop your firm later. Ignore outlier profit spikes and focus on your bottom-line profit and the overall trend over time. This will reveal whether you will be able to sustain a large business expansion in the form of real estate.
Think about your staff growth
Buying and launching a new business location will necessitate an increase in staff resources; whether this means hiring more people or expecting more from your current ones, you can not expect your current work structure to automatically expand to accommodate a larger space. Ideally, you would train employees to take on more responsibilities as the move progresses, such as overseeing the relocation, running potentially new departments, and maintaining current working standards in the larger area.
Consider your financing for new or extended premises
Once you are certain that your company’s structure and probable profit can sustain a major relocation, it is time to start looking for commercial space and securing the funds to buy one. Finding the proper building is one thing; ensuring that all of the acquisition costs are met is another – and one that can frequently be fraught with issues. You will, however, most likely seek financing from other lenders, just as you would when acquiring a domestic property. Shop around to find the finest solutions for your scenario before making any major decisions to expand your business by purchasing real estate. Of course, extending your current premises is also an option – you would need to seek legal advice to check that it would meet planning regulations and consider all the costs involved such as the contractors and steel reinforcement.