Choosing Your Business Premises

Choosing Your Business Premises

Where are you going to set up in business?

  • Buying or renting premises?
  • Property Use Classes – A3, B1 etc
  • Serviced offices
  • Working from home
  • About Virtual offices
  • Legal Services / Find a law firm / legal document templates.

Buying or Renting Premises

Several new businesses start in spare rooms or garden sheds, but many start in small business premises where a feeling of independence can be gained and the ‘right impression’ given to customers, clients and prospective employees.

Acquiring suitable property can involve considerable outlay, so care is needed to ensure that expensive mistakes are not made.

The new business should consider modest premises where overheads such as heating, lighting and rates can be kept to a minimum. There is little point in moving into premises where much of the space is unused, yet has to be heated and paid for!

Should you buy or rent?

Generally, the latter is preferred by new businesses. This is because buying a property involves either a capital outlay or borrowing capital, or a mixture of both, which means less capital for buying stock and equipment.

What is a Lease?

A Lease is a contract between the property owner (landlord) and the occupier (tenant). The Lease document states the rules and regulations of the occupancy as well as confirming the amount of rent. Because the lease is a contract, either party to it can be sued by one another.


Rates are a form of tax and are paid to the Local Authority as a contribution towards the costs of providing services for the district such as street lighting, refuse collection, etc.

There is a legal requirement to pay rates and unless arrangements are made otherwise, the Local Authority will bill the occupier. The amount of rates depends on the type and size of the property and not the ability of the occupier to pay, so the more modest the premises the lower the level of rates.

Repairs and maintenance

Consideration must be given to the repairs of the premises. As a tenant, you may be responsible for some or all the repairs, and as an owner, you will certainly have to carry out all repairs. It is wise therefore to have premises surveyed prior to buying or leasing.

Establishing your own business has many advantages and one is being your own boss, and this will be brought home when you take occupation of your first business property and put your name over the door. However, there are many pitfalls in acquiring suitable premises and advice should be sought before any commitment is made. Location is usually the most important aspect of a retail/service business premises.

Property Usage

In the UK, there are limits to the activities that can take place within a specific property as defined by its Use Class. A property with an A3 Use Class, for example, can be used for “the sale of food or drink for consumption on the premises or of hot food for consumption off the premises”. Therefore, select a property that has the correct Use Class for your business purposes or ensure that you thoroughly investigate the possibilities of changing its official usage before you take it on. Read more about the various property Use Classes in the UK.

Serviced Offices

There are over 500 companies operating serviced offices in the UK alone.

Serviced offices provide immediately available and fully fitted turnkey offices, with telephone answering and secretarial services also available. Serviced office customers’ range from large blue chip organisations that need local representation, space for a project team or a short-term office to small start-ups that require space from one to 100 people.

They are also popular with rapidly growing enterprises and foreign companies seeking a UK base. There are also considerable cost savings to be made from accessing the serviced office market.

A report by the Chartered Institute of Purchasing and Supply (CIPS) shows that businesses could halve their accommodation costs if they opt for fully serviced offices rather than conventional office leases. The CIPS found that a company of 10 staff in a regional city centre can make an annual accommodation saving of 44%, rising to 82% for a one month stay. In a central London location these cost savings were found to be 57% and 9% respectively. These savings can continue to be made up to a period of three years.

On top of the purely financial savings, the use of serviced offices also allows new businesses to budget accurately and to make realistic financial projections.

Running a Business From Home

If it is possible to do so, running a business from home can be convenient and reduce your overheads.

Check your lease for clauses that may prevent you from running a business from home. You may also need planning permission.

About Virtual Offices

You may find the services of a ‘virtual office provider’ useful if you work from home, your business involves a lot of travel or you receive a large number of incoming calls from customers. You can often choose a package to suit your requirements from a range of services such as; mail forwarding, telephone answering and access to meeting rooms. Read more about virtual offices.

Assistance for business start-ups

Your local business advisory service may be able to help you find competitively priced premises with short term contracts. 


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