A few questions about moving into a unit

[shaunb]

Hi everyone,

I was driving around today and found myself in a local business park and thought i would have a browse at what sort of units were on offer, so i was looking and thought i may as well phone up to see what the rent was like, and before i know it, i was inside one of the units taking a look around, i was in Riverside Park in Middlesbrough, and the estate agents were from Newcastle, but they had someone down for the day so they met up with me.

Anyway, i think the unit was around 450-500sqft and the rent was £50+vat per week which includes building insurance, and the landlord has said he will do the first 4 months at a 50% discount.

I was just wanting to ask what people thought about moving into a unit in the current state of the economy, is it worth it etc? i know that these particular units have been available for around 6 months now, so do you think there is any bartering to be had with the rental price?

Thanks in advance.

Shaun

 

[asonda]

Seriously it's all about if you need it and what the current prices are for other units in the area.

If you are working from home (which I assume you are if you don't have a unit/office) do you 'Need' a unit?

What will it add to your business? is it in a better location? passing trade?

All these sorts of things you need to think about..

 

[APC Nexday Overnite Ltd]

there are also other factors to take in, rates for example....the reason as to why you're gettin the first four months that cheap is because it will be costing your landlord a lot of money as they now have to pay rates on a property even if its vacant!

(funniest thing about this is that council units letted out by the council also come under the same ruling so out of our council budget we have to fork out for vacant properties rates!!!! which just goes into a pot then gets divided up again by the way ! each council can't reclaim what they paid in.)

How long also will he keep it at the price he's offering it you at now*(make sure you got this in contract not his word)?
Also what is the lease? especially if you're a sole trader which i suspect with first unit (sorry if not). If the lease is 12 months if you leave after the first month you will still be liable to pay 12 months rent/rates (not sure if you have to pay rates).

 

[APC Nexday Overnite Ltd]

if you can work from home i'd suggest you do so this obviously depends however on the type of business you got, how well its doing, your hopes/plans for it etc
e.g if your thinking of expanding and you've got a product that will do well in this climate than obviously get the unit.

 

[cricket]

I'd do some quick research to check how well anyone is doing in your particular industry or service. If they are doing OK, then you could think about a unit but as others have said, do you really need it?

One of the key issues about surviving a recession is keeping overheads to a minimum.

 

[shaunb]

Hi everyone,

Thanks for the reply's! Appreciated.

It was the estate agent i was speaking to who was telling me about the land lords rent and 50% off for 4 months etc. Its been at that price since i first seen it advertised a while back.

people are right in assuming i work from home, but the business that i am in, i hold quite a bit of stock, and it has already moved from my bedroom to the spare bedroom and it is quickly taking over that too. So the storage space would be nice.

As well, at the moment, my only trade is online and at computer fairs, as well as repairs locally. But i have no other means of selling parts/PCs/Laptops to the public, as i wouldn't feel comfortable people coming to my house for parts as i don't think they would either, i know i wouldn't want to go round someones house to pick up an oven or something, it would feel dodgy, even though it isn't, so it will open up a new door for me, literally as i would build in a trade counter/shop front.

Plus, it is somewhere for me to keep my van as that is just blocking the limited parking in my area as it is. i have also lost work due to me working from home. For repairs i always offer a free pick up and drop off service, but some people insist on bringing it themselves, so i tell them where it is, and they usually phone and say they cant see a shop so i tell them i work from home and a lot of the time i never see them, or thier laptop or PCto repair.

I do want to expand my business and i want to become a big online retailer for the industry, and think i would be able to do this at the unit, but as people are saying, would i get the business to cover it? There are other PC shops in the area that i am friendly with, which work out of both units and retail, and they say they are doing good, but they would say that lol.

With the unit there is 3 months notice for me to vacate the premises at any time. And my business rates would be around £350-400 the estate agent said as i can claim small business relief and get 50% off, so not to bad there.

Just read over the post and it is quite long, i apologise, but i am needing as much reassurance as possible as to whether or not it is a good idea or if i should wait til after christmas etc.

Thanks for reading if you got to the end!

Shaun

 

[bovine]

sounds good and pretty cheap to me.

Just remember to include costs for security, alarms, insurance etc. If you open a new unit with signage showing "bobs pc and laptop repair" then it may get some unwanted attention from the local chavs.

 

[i234i]

Ive got a 450sq ft unit, its almost double that price! (location is amazing though!)
Ive never seen something quite as low as it, and the business im in the actual unit doesnt matter as we're a studio we have to rip out and build in.

We prefer units that are in a sorry state as we do up as you usually get a better deal!

Sounds like a really good deal!! The landlords with the way things are want people in, you'd easily get a 3 month rent free period im sure if you take it on after that.

 

[APC Nexday Overnite Ltd]

£350-£400 a year for the rates I take it? don't know about your workings out but i got it at £3220 a year rent and rates for that unit thats with the £400 being the business rates for the year.
This seems good. Off your current profit could you minus at least £3220 (this is not including utilities, alarms, signage, advertising (inorder to bumf up business) and still be doing well?.
I've also got it as if you went bust the day you went in there and had to leave immediately i've got it at £805 you would have to pay for the rent and rates (rates being £400/4 for a quarter). This would have to come out of your own assets some way or another and obviously if you did go bust you obviously wouldn't also have a income coming in.
Not trying to be pessimistic just showing worst case scenarios, if anything that way you can plan against them or know the worst should something happen.

 

[shaunb]

i got 2400 for the year, for the rent and £400 rates, as the first 4 months are charged at a discount of 50%. I was planning on cutting back on spending in the next month or two as i wanted to have atleast 12 months rent and rates in the bank, just incase, as said above, need to think of worst case scenario. Does anyone know what rental prices are supposed to be doing at the beginning of next year? whether they will rise or fall.

i was thinking of seeing if i could get the first couple months free and then the 4 months after that at a 50% discount just so i can have time/money to move everything in and fit the place out.

 

[APC Nexday Overnite Ltd]

I added the VAT but ye both right. It's worthwhile asking! definetly our current landlord allowed us to do the same although we got a month's worth. I think two months would be a bit cheeky don't you? But why not give it a try the best; if he says ye, the worst; he says no and you have to go ahead with what you have budgeted for so far.
You have nothing to lose to be honest and he has everything to gain also just stress that someone else has offered you similar unit same terms.

 

[MH1]

Ask for 40% off for the first year.

Very cheap BTW, but they will struggle to get anyone in the next year.

 

[APC Nexday Overnite Ltd]

make sure also you ask how long the current pricing is fixed for. Do you know? Has he said a year? if so get it in writing. If he chooses to hike up the price next year you may be powerless other than to keep paying

 

[Steve2507]

As MH1 said they will struggle to get anyone over the coming year, so you are in a strong position.

As an aside to everything else discussed. Do you want or intend to have the general public visiting?

If, like us, you do not have customers visiting I would recommend having your limited company name (if you have one) as the signage. That way delivery drivers, supplier reps etc will know you but locals won't. This may prevent unwanted loacl interest.

 

[Write My Site]

This bit rings alarm bells for me. In my opinion, if you don't already have the business to "cover it", you shouldn't take the unit. Sure, it's cheap compared to other units but that's not the point. Growing your business so that you're a "big online retailer for the industry" will take more than just a unit - you'll also need to invest in marketing, maybe some extra staff, etc etc.

Your original plan of having 12 months rent and rates in the bank before making the move sounds sensible. There are other solutions to the problems you mentioned about working from home. If storage is an issue, look into cheaper alternatives like renting a cubicle from Access Storage and the like. If customers won't deliver to your home, just tell them you always pick up and deliver back for "insurance reasons" or something.

Bottom line is, you should only take a unit when your business is bursting at the seams and it's "grow or die".

I do want to expand my business and i want to become a big online retailer for the industry, and think i would be able to do this at the unit, but as people are saying, would i get the business to cover it?

 

[cricket]

I would wait until after Christmas because that's when I think we'll see how the 'real' economy is looking. Up until Christmas there is always a splurge in sales so it's hard to tell what will happen after this period.

If you're managing where you are, it's better to keep your overheads as low as possible. The chances are that there will be more opportunities with good deals from hungry landlords after Christmas.

Wait and see would be my advice.

 

[shaunb]

Thanks for the comments! Very appreciated.

I would be wanting the public to know who/where/what i am, so i would want to put proper signage up rather than another name. I have thought about the local chavs etc, but the court is gated after certain times and has 24 hour security/surveilance.

As well as the extra space, somewhere to go to work each day and a shop front, it would also give me a more business like address, would people do me a favour and have a look at the contact us page on my website. www.bcomputing.co.uk. And would you be able to tell me if you would think it was a business ran from home based on the address or whether you wouldnt think anything of it?

I think i will wait for christmas to pass before i start any real negatiotion with the landlord, the rent i got was set to increase 3% per annum. Think i will be in a much better position by then as well.

Again, thanks to everyone for thier advice, really helped me out! Nearly dived into it headfirst lol!

Shaun

 

[Goodegging]

haggle over price - 50% of for 3mths and then 10% of for following months

 

[Billy_Ben]

If you think it will help you if you move in to a new one then by all means go for it. Just require a written contract for assurance of what has been promised will be fulfilled.