There are many difficult decisions to make when you start in business. You’ll need to choose between logos, employees, and of course, whether to buy or rent a commercial space.
None of these decisions is easy, not least the battle between renting and buying. The main problem is that there are strong points on each side. You might think you can view more properties from each team to make your mind up, but even that’s unlikely to help. When it comes to what’s on offer, there’s not much between the two. Whether buying or renting, there’s sure to be some strong contenders on the market.
Hence, it’s essential to get deeper into the matter. Arguments on the rental side lean towards lower upfront overheads and an ability to move around if you need to. But, getting into the nitty gritty often reveals buying as the apparent winner of the battle. Why? Read on to find out.
Costs are easier to manage
When you commit to renting, you tie yourself to a set monthly payment for a determined duration. The trouble with this is that profits in new businesses rarely remain at an even rate. As such, there may be months where you struggle to make the rent. By comparison, buying ensures those payments are easier to manage. If you’re lucky enough to pay up-front, you’ll only need to worry about bills. And, that will take a tremendous amount of pressure off your profits. Even if you have to get a mortgage, you may be better off. This way, you can be sure of how much you’ll pay each month for the fixed-term of your mortgage. Rent, on the other hand, can shoot up at your landlord’s discretion.
Freedom to use the space how you want
You’re also limited in what you can do with a rented space. Unless you get your landlord’s permission, you won’t even be able to decorate. Given that you need your business to stand out if you want to success, this is far from ideal. When buying your commercial property, you’ll be free to do as you please. You could paint the building pink if that’s the colour of your logo. You won’t even need to think twice about hanging hefty signs outside your door. That’s important given that steps like these are essential for getting your company seen.
A nice slice of collateral
Perhaps the best benefit of buying is that you then have collateral. When you rent, there’s nothing to protect you. If your business starts to struggle, you’ll have nothing to fall back on. At least if you own the building, you can sell that and use the profits to prop your company. Even if you have a mortgage to pay, it’s likely you’ll see some return after selling. Collateral like this is also essential in the business world as it brings some level of respect. You can be sure you’ll need all the respect you can get when first building your reputation.