Most have heard of the real estate agent’s mantra: location, location, location. Why is it repeated three times? Because the wrong location can make the difference between success and failure!
A lot of people start out as a home based business and then move to a commercial space. Working from home isn’t for everyone. You have to be focussed and your family has to remember that even though you are sitting in the next room, you are working.
What are some of the advantages and disadvantages of being a home based business?
- It is very convenient
- Operating costs are lower
- Tax advantages — you can write off a percentage of your home expenses
- You can set your own hours (depending on your service) – no constraints
- No commute!
- Distractions are all around you — may be hard to stay focussed
- It is not as professional
- No room to grow and expand your business
- Clients know where you are and can visit at any time
- You may feel isolated and out of the loop
What are some of the advantages and disadvantages of being in a commercial location?
- Creates more visibility for your business
- You have more space to grow
- A more professional look for the business
- The business appears to be more established
- You can have signage
- Signing a lease or rental agreement can mean a 2 – 5 year commitment
- You will have more overhead expenses
- You will have to commute
- You must adhere to a schedule of when your business is open and closed
As you can see, there are benefits to both options… The question is, when is the right time to make the transition from being a home based business to moving to a commercial space? A lot depends on the type of business you are in. If you are finding that space is an issue and your clients are starting to complain about parking and accessibility issues, then perhaps it is the right time to consider a larger facility. There are some entrepreneurs who are able to create a professional business atmosphere in their home whereas others have found it difficult. You need to plan strategically for the transition and do your research.
Considering a commercial space? Ask these questions:
- Do we really need to move?
- Does the new location complement our business services and/or product?
- Who will be our business neighbours and what kind of reputation does this area have?
- Will this move allow us to service our clients better?
- Will this move affect our budget and do we have enough cash flow for extra unexpected expenses?
- Have we talked to others and received outside professional advice before finalizing our decision?
- How long will the lease/rent agreement be for and will we be guaranteeing it personally?
- Do we have the marketing budget to promote the new location?
In today’s economy, some entrepreneurs have started to consider sharing space with another business. The price, installation and monthly expenses such as phones, equipment and meeting rooms can be shared and this helps to keep costs down.
The Halton Region’s Small Business Centre is here to help you with all your business questions. One of the goals of the Centre is to empower small and medium-sized enterprises and give them the tools to achieve success. For more information about any of Halton Region’s other Small Business Centre resources and services, and how we can help direct you to the right resources, contact us at 1-866-4HALTON (42-5866), www.haltonsmallbusiness.ca, firstname.lastname@example.org or visit us at 1151 Bronte Road, Oakville.