As well as researching the market local to where you’re planning to open your shop, you should also find out as much as you can about your future landlord. Don’t be shy about this. Remember that when you make an offer to lease a shop you will be asked for references and there will be background checks, credit checks and deposits to pay, while you will be provided with no information whatsoever about who your landlord is.
Purchasing a Freehold Property
The obvious advantage to purchasing a freehold property is that you won’t have to pay rent. However, unless you’re sitting on a pile of cash it’s likely that you will need some sort of finance to fund your purchase.
Commercial mortgages are available in exactly the same way as you’d get a mortgage to buy a private house. You could of course find a property which has a shop with accommodation over it so you can live above your business or rent the accommodation out as additional income.
Purchasing a freehold property is a drastic move for someone setting up their first business. If you have the sort of money needed to purchase a freehold shop then you’re better off buying an established profitable business. This way at least you substantially reduce the risk and your money starts working for you from day one.
How do you find shops that are available to let? There are number of ways including:
- walking through suitable areas looking for agents’ `to let’ boards;
- contacting commercial property agents and asking them to put you on their mailing lists;
- checking on websites such as Business for Sale and Daltons Business for which a relatively small fee may have to be paid. (http://www.businessfor sale.com, and http://www.daltonsbusiness.co.uk.)
My final advice on taking on a shop lease, as opposed to buying a successful business that’s already established and profitable, is to think very carefully before going ahead.
Tips of the day!
A lease agreement is legally binding and even if you cease trading after it your first few months you will still be liable to pay all outstanding rents for the duration of the lease period you entered into.
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