The best location for your business  

Finding the best location for your business, we believe, can either make it flourish or cripple it. However, there are always exceptions.

When finding the best location for your business, the one golden rule to remember is:

• Locate as close to your target market as possible.

Your target market depends on your business type which means that different locations will benefit certain businesses more than others. Having a café on a busy high street with local residents, office workers and weekend shoppers will provide regular footfall. You will generally pay a premium for this type of location as the competition for such a location is high. However, there are always exceptions where businesses will thrive in areas that do not seem to fit their purpose. The reason for this is usually down to the individual who runs the business.

Here are some examples of some prime locations for different businesses:

Pharmacies

Within existing health centres, or the closest pharmacy to an existing health centre. Once people have collected their prescription from their doctor’s surgery, they will often use the first pharmacy that presents itself to them.

Dental Practices

Within the community that it serves, so often you will find High Street locations, or more recently close to retail parks. However, converted residential properties within residential areas also work. Parking is important as is the surgery being within walking distance.

Restaurants

Within town and city centres that act as a Leisure hub for the local community. Or within village and rural locations where people will travel if the product is good enough or the chef well known enough.

Pubs

Very dependent on which sector within the pub market that you are trying to win over. Community local, within the local community or housing estate. A city centre is a great location for a late-night venue. A good quality, food led pub is best located within high value town or village locations.

These examples of prime locations may seem obvious however we believe it is important to keep the location in mind. Finding your business location takes time and there are always compromises to be made. The more you have thought through options to work out what you are willing to compromise on the more prepared you will be when you find the “right place”. Do your research check with local councils for any future developments that may change or increase your target market.

Leasehold or Freehold

Deciding on a leasehold or freehold premises will depend mostly on your financing. When you enter into buying a business premises it is cheaper if you are purchasing a leasehold property as there is less finance to raise, but you are without the stability of owning your own property. Borrowing money when buying a freehold property however is often easier as banks will often put a charge on the property.

The decision on buying freehold or leasehold comes down to several variables which we have laid out here:

Freehold

Freehold is a full-ownership title certificate with no time limit. When you buy a freehold, you are simply acquiring the ownership of the property. You can sell the property as leasehold or as a freehold if you want to transfer the ownership. Freehold is best for buying a property as a long-term investment. However, there is a considerable difference in the price of the business as you are buying the property element also.

Leasehold

Leasehold is a type of title certificate that states you as the owner of the property for a predetermined number of years. Apartments, flats, and several houses as well as commercial buildings come with a leasehold certificate. The lease period can be anything from 5 years to 999 years depending on the leasehold deal you are getting. At the end of the lease period, you may be able to renew the lease subject to the Landlord and Tenant. Before you buy get solicitors to confirm that the lease is renewable and has not been “contracted out”. You may even have the option to buy the property as a freehold after the lease period is completed.

In general terms lenders prefer freehold deals as they have a property element to secure the lending on, however they are often happy to lend on leaseholds if the lease terms are favourable and they can take a charge over it. When deciding on the best location for your business keep your target market at the forefront of your mind and research the area for any future developments.

You may find links below to articles we have written helpful and if you would like our articles sent by email consider signing up to our monthly  Newsletter

Business and property decisions

Small business tips: Starting your own business