THE GUIDE THE ULTIMATE BUSINESS START UP MANUAL
Lease A lease is a long term, fixed contract that offers security of tenure. It is a credible option, with long term stability if you do not expect your circumstances to change. In the recent economic climate, lease lengths have reduced considerably as have incentives like rent-free periods, making them a much more attractive proposition.
Nevertheless, whatever the period, you are committed: there may be a break clause, but it will incur financial penalties if exercised. The deposit and rent is payable up front – as with serviced – but is paid quarterly, so the figures are higher.
Additionally, you will pay for rates, utilities, fit-out, legal fees, surveyor fees, insurance, service charge, IT infrastructure, upward only rent reviews along with dilapidations (repair and restoration) on exit.
Things to think about are what restrictions are on the space (can you make changes to suit you (especially difficult in a listed build- ing), what are the break clause penalties and can you re-assign the lease.
Purchase
This is the most expensive option short-term, but cheaper long- term, and you own the asset once the mortgage is paid. You have complete control, a long-term investment (in theory at least), and the option to become a landlord if you do not need some or any of the space.
Bear in mind though that this is a long term commitment. It ties up cash and market fluctuations can add to costs or decrease value, affecting your ability to sell on. Additionally, all costs, including maintenance, repairs and any problems, are yours.
Serviced Well, the service model is what we are talking about here, so suf- fice to say that serviced offices offer a very flexible, adaptable and controllable option with no unwieldy up-front or exit costs. You also benefit from a lot of onsite, centralised services which, with lease or purchase, would be your sole responsibility.
It would be disingenuous of us not to acknowledge a few down- sides to serviced space. Although business centres are not branded, the spaces are still homogenous in many respects and – in some circles – do not have the same status as leased or purchased space and many business owners will undoubtedly see ‘serviced’ as a stepping stone.
And it has to be said that serviced offices may not be economi- cal beyond 20+ workstations and at this point, any business still growing would need to review their situation carefully. This is not strictly a negative, simply a part of the business journey, but does need thought.
For more information on offices available in your area please contact us:
yourofficefinder.com.
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