Business Location, Location!

Location, Location! you see it when real estate agents are advertising the features and benefits of a well located property they're selling - close to shops, schools, public transport, parks etc.

Similar features often apply to the location of commercial business premises.

If your business relies on attracting customers into your premises when they are passing by or if people are going to be visiting your showroom, it is important that it is presentable and well located.

However, if you can do without commercial premises - perhaps by working from your home office or garage, then this is certainly your best option ... and if so, you can skip the rest of the page.

The costs of leasing commercial premises vary considerably according to, among other things, location. Costs usually include all outgoings (ancillary costs such as building management fees, maintenance fees, rates etc) and can add up to a BIG overhead expense that a new business can do without.

If you determine that you do need a good commercial location, analyse it thoroughly before signing a lease.

Considerations should include:

• Are there any competitors nearby? Nearby competitors are usually good for business. Their customers will usually make an effort to visit you too and people are attracted to areas where they have more than one choice to shop for a good deal.
• Are the customers I want to attract passing by my door? Although most commercial areas usually have a varied mix of potential customers, some areas often have a predominant demographic group. eg. If you are targeting teenagers, you need to locate your business where teenagers are likely to be passing. eg. near an amusement centre, cinema complex or another business that also targets teenagers.
• How many potential customers pass by in a given timeframe? Spend some time watching and counting the numbers of potential customers that pass by.
• Will this location enable me to attract customers into my business? See how many passers-by actually enter other businesses. If you locate near a railway station, although there may be a lot of passing people, they may be in too much of a rush to catch a train rather than visit your business.
• Is it easy for road traffic to stop and park? Many business are located on busy road with a lot of passing road traffic. However, because the roads are so busy, it's often difficult to stop. Parking is also something you must consider - make sure there's plenty of easy parking nearby.
• What signage can I have? The amount and size of signage on most commercial premises is controlled by local government authorities (local council) and the management body that has control over the building (usually the body corporate). Check with these to find out your rights and limitations regarding advertising signage.
• Is my type of business permitted from this location? All commercial properties are "zoned" according to their permitted use. This protects surrounding residents and businesses from having unacceptable or offensive business opening up in the area. Check with the local government authority to find out your rights and limitations regarding permits and type of businesses allowed.
• Will there be clear access to the premises? This is not usually an issue. However, we heard of a case recently where someone had leased a property with rear access via a laneway. He assumed that the rear access was part of the deal. It wasn't until later, he discovered that the laneway was part of the property next door and the person leasing that property was only prepared to provide right of way on payment of a substantial annual fee. Make sure you check your rights to use all aspects of the property prior to signing any lease.

If and when you sign a lease, negotiate beforehand to ensure the conditions are in your favour as much as possible - eg. an initial short-term lease with flexible options for each renewal period. Also the rental amount should by linked to the "Consumer Price Index". This way, the landlord shouldn't be able to increase the rent unfairly at each renewal period.

Many leases are standard printed forms and agents will tell you they can't be changed. This is not true. Before signing any commercial lease, have it checked and evaluated by a professional who expert in this area and negotiate for a deal that suits you ... and get the best location!

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