You're growing, so you want to expand your business. Maybe you want to buy or prefer to rent business premises. Or you're expanding at your existing location. In this article, we discuss the options you have and the things to consider.
Expand business at your current location
For many business owners, the most logical step is to first investigate whether expanding your business at your current location is possible. This often saves a lot of time, cost and energy. You need to consider two important factors.
First, the physical space has to be there. It is important to have a good forecast of the space you will need in five to ten years. It makes little sense to invest a lot now in an expansion that is actually suboptimal, causing the same problem in a year or two.
Second, the so-called "environmental space" is important. Laws and regulations surrounding emissions are becoming increasingly stringent. Therefore, you will have to investigate how much more you are allowed to emit or how much extra noise you are allowed to produce within the current permit and determine if this is enough for your future growth.
Is your business in its current location built in on all sides by your neighbors? If so, you can still investigate whether they might want to sell their land to you. If not, you have no other choice and will have to look for a new location.
Finding new location for your business premises
When you start looking for a new location for your property, you are faced with all sorts of choices. It starts with the rational side of things: is there a location you can go to and grow in the next five to ten years? The distance from your current location is an important factor, which many entrepreneurs tend to overlook. After all, your employees must be willing to travel to the new location. For most employees, they are willing to travel about 30 to 45 minutes. If the relocation of your business means that your employees will leave, then you need to figure out how to accommodate this loss.
In addition, emotional issues also play a role. Perhaps you are completely wedded to the region, depend on local raw materials or serve a very local market. Take these issues into account as well when choosing a new location for your business.
Found an existing property
Once you have found a suitable location, you again face a number of choices. Have you found an existing property that meets all your requirements? Then that is often the cheapest and easiest option. Usually you can rent such a building with a relatively short contract. So you don't have to commit yourself for years. But finding an existing building that is suitable is not for everyone. An IT service provider that only needs to move a few desks, so to speak, has an easier time of it than a company with a very specific and high-quality production process.
Getting new premises built: renting or buying?
If you can't find a suitable existing location to expand your business, you can have a new building built. Many entrepreneurs prefer not to have a building on their balance sheet, so they look for an investor who will build a building for them. As an entrepreneur, you can then rent this premises from them. However, there are usually additional requirements from an investor, such as a multi-year lease or limited options. For example, an investor will not want to build a very specific building for you that he will not be able to find another tenant for in ten years. Buying a business building is especially interesting for entrepreneurs who, for example, have a special production process and want full control over the construction of the building.
Involve congregations in your choice
If you can choose from several locations in different municipalities, you have a nice bargaining position. After all, a municipality welcomes new employers, so perhaps they can somehow make it extra attractive to choose the location in their municipality.
Investor needed to expand your business?
In many cases, you will have to deal with investors when expanding your business. Want to know what's in store for you when you start working with investors? Then read our white paper and find out what impact investors have on your business!