By Geoff Kirbyson
Buying your house might be the most important investment you ever make but purchasing your first business location is likely a close second.
Instead of looking at neighbourhoods and rating them based on schools and proximity to family, entrepreneurs hoping to hang up a shingle will want to be where the action is but that will differ greatly depending if they’re in retail, office or industrial.
A good first step is get a realistic idea of the space you’ll require and come up with a monthly budget that takes into account the potential growth of your operations. It’s much easier, obviously, to buy or sign on for a five-year lease if you’ve got a steady business but if your forecasts call for sales going to the moon, you’ll need to take expansion possibilities into consideration before making your final decision.
Trevor Clay, Commercial REALTOR® and chair of the Commercial Division Executive Council, recommends entrepreneurs seek help from a professional commercial real estate agent who is knowledgeable in their business area.
“If you want warehouse space, that’s different than office or retail space. You’ll want to find somebody who knows the market you’re in and have the right professional advice from lawyers, accountant, architects and engineers. You have to have the right people on your team to understand the potential costs and roadblocks you might encounter when setting up your space,” he said.
Entrepreneurs look to expand for a variety of reasons. Some home-based business owners feel the need to lease a commercial space to elevate the level of professionalism of their operation or if they’re concerned about bringing staff into their homes.
“Leasing an office space can give your staff a professional environment to work in. It also gets you out of the house,” Clay said.
If you think finding the right real estate is expensive, try finding the wrong real estate. You might think you’ve discovered the perfect space but if you sign a lease without reading the small print, you could find yourself out of pocket for a malfunctioning HVAC unit. If you’re buying the space, make sure to get a property inspection before finalizing the transaction.
The nature of your enterprise will dictate where you look to buy or lease. If you’ve got an industrial business, your options are the southwest, southeast and northwest parts of town where you can have easy access to truck routes and minimal disruption from most traffic.
Within industrial spaces, however, there are various zoning categories that need to be understood. For example, some areas are zoned for light industrial while others are zoned for manufacturing.
“If you’re in a distribution business, you couldn’t locate in a downtown office building from a zoning perspective, even if you wanted to,” Clay said. “You have to look at the city’s zoning bylaws to make sure you can operate your business in that type of zoning. You might have to look at variance and conditional-use permits that are time consuming and very expensive. That can set you back in terms of timing.”
Office space is found either downtown or in the suburbs while retail outlets tend to be in several quadrants, including the areas around CF Polo Park and St. Vital Shopping Centre, where they can get maximum visibility and traffic counts.
“Every company looks at (office space) differently. Some want to be downtown because their employees are spread out across the city and want to be easily accessible by bus while others want to be in the suburbs, because that’s where their clients are,” he said.