Storage Premises

[freelancesam]

I run an ebay furniture shop, currently I store stock in my garage but I'm quickly outgrowing it and struggling for space. I'm currently on a weekly turnaround for furniture (ebay 7 day listing, everything must go) but I'm looking for somewhere big enough to store furniture for longer periods to maximize profits whilst having the freedom to purchase more stock without being limited by space.

Commercial premises big enough are around £500 a month + bills which would eat around 50% of the current profits, Is it possible to rent an old barn or something on a farm as it's only the storage I need. If so, how does it work? Do I need to pay any rates or anything for it?

Never really done this before, just weighing up options to expand etc.

 

[james_firmsites]

Since you are running an online sales business the warehouse is rateable, as it is for stock storage not personal storage. https://www.gov.uk/introduction-to-business-rates/overview

 

[freelancesam]

Thanks James, does the same rates apply if I rented space on private land like an old farm barn or something?

 

[james_firmsites]

Yes, because it's not about the location or building type it's about the use of the building. You are using it for commercial activity and from their point of view it is no different than say amazon's warehouses (even if your not shipping from that location).

If they allowed the storage to be exempt if not used for shipping then you can imagine someone like amazon declaring 99% of buildings storage and then a small room as the distribution point saving a fortune.

Sorry, unless it's for farming any building is going to pay rates.

 

[freelancesam]

Ok thanks for clearing that up.

 

[IanG]

Would think you'd qualify for rate relief so long as you don't take on anything too large.

Farms are OK but unless you chose a particularly nice one, you may quickly become frustrated with the fact its a farm. ie. generally not as clean, leaky etc., and if you're retailing stuff to go in people's houses that may be an issue.

Self-storage places may be an option - but consider access to those.

If you can afford the unit and only eat half the profit that means you still have a reserve and it isn't a loss straight away. Wthout knowing your weekly goings-on its difficult to comment but how much time to you currently give it? If you can afford £500pm and still retain profit it might be that you can finish an item every day and not just once a week and there is your rent found. You're obviously buying at the right price to be doing those types of margins in one sale.

 

[Socio South West]

If you are prepared to sail close to the wind, and most of the agricultural community won't have a problem with that, rent the barn...
In time the council may catch up with you, and you would have to pay rates retrospectively, so bear that in mind: Planning laws have recently relaxed and change of use from agricultural to non agricultural use is very much simpler than it used to be. The Planning enforcement process if it ever was used against you is so cumbersome and long winded that you would have time to make other plans, provided you deal with the enforcement people with respect.
What I am saying is maybe use this route as a step to build up the business to be able to handle the fixed costs associated with an industrial unit, but know the potential pitfalls of taking this route.

 

[Billmccallum]

try

City Self Store Depot
Unit 2d/Knighton Junction La Leicester LE2 6AR
0116 288 8847

not too far from you

 

[james_firmsites]

Would think you'd qualify for rate relief so long as you don't take on anything too large.

By the OP's post I think they won't qualify since the storage will be their second location. https://www.gov.uk/apply-for-business-rate-relief/small-business-rate-relief > "you only use one property"

I think the self storage recommendation is best, you really don't want to play it fast and loose with the rate man, short term savings are not worth the longer term risk IMHO

 

[ianm10]

We have ex council garages near me rented out by the Housing Trust for about £30pm. They are supposed to be personal use only, but doesn't appear to have stopped builders, painters and decorators picking up their stuff daily for last 10+ years ;-)


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[james_firmsites]

We have ex council garages near me rented out by the Housing Trust for about £30pm. They are supposed to be personal use only, but doesn't appear to have stopped builders, painters and decorators picking up their stuff daily for last 10+ years ;-)

But they would get rate relief anyway, assuming they are just driving around job to job that garage is their only physical place of business and unless it's massive would be well within the rate relief sizes. Not saying they are doing it that way, just might explain why no one chases them for it.

 

[ianm10]

But they would get rate relief anyway, assuming they are just driving around job to job that garage is their only physical place of business and unless it's massive would be well within the rate relief sizes. Not saying they are doing it that way, just might explain why no one chases them for it.

The T&C's usually state no business use. My point was more it would still be beneficial the OP paying circa £30 as to use for "personal" use. In comparison to circa £500 p/m, this could be worth paying out of his own pocket (although am sure an accountant could somehow find a way to recover the costs). Obviously insurance would be an issue, but maybe a gamble worth taking if the cost saving looks favourable.


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[IanG]

Depends if the £500pm premises allowed more stock, more business, more of a retail situation where customers could turn up and take stuff without having specifically advertised it etc. etc.

The stuff is obviously going out the door, in which case do more.

 

[Concept Vehicle Leasing]

I had a big Yellow Storage unit for a similar business. You would be better off renting 2 big ones for around £340 or less (plus 4-6 weeks free at the right time of year). 24H access and enough space. Have you looked into this as an option?

 

[morespace]

The advantage of self storage for businesses changing in size, is that you can usually upgrade or downgrade your storage unit size, depending on the amount of stock you have that month. So you only pay for the storage space you actually use. There aren't normally any business rates to worry about either.