New research from QualitySolicitors shows that demand for flexible, co-owned workspaces is set to soar, with 71 per cent of UK SMEs predicting this to be a top business priority in the future.
It shows that it’s no longer all about location when it comes to find new premises. In fact more than two-fifths (42 per cent) rate having a flexible, adaptable space where they grow as more important. It’s also clear that SMEs don’t want to be tied down when negotiating their lease, as more than half (54 per cent) want flexible, short term lets and 53 per cent would demand a break clause.
Unfortunately, it seems the increasingly complex needs for modern SMEs may be putting many off moving, which could hinder their business grown.
Almost half (47 per cent) admit to being put-off or stopped looking for new premises altogether, blaming the cost and time associated for this decision.
Here are my top tips to help guide SMEs through the process.
(1) Know what you want
Think about what you really want out of your workspace before you start looking for a property – be it location, price or space – and draw up a list in priority order. This will enable you to be more efficient on your search and better negotiate the terms of your occupancy.
(2) Negotiate rent terms
Some landlords are willing to compromise on rent to secure a new tenant, especially if the building has been empty for a while or is in a less desirable postcode. Take this opportunity to negotiate a reduced rent or to limit any increase at your rent review. If your landlord is not willing to budge on this, request a rent-free period at the start of the lease. This will allow your business to settle in and fit out and will relieve your landlord of having to pay business rates on an empty property.
(3) Flexibility is key
The standard length of a commercial lease is between five to ten years; if you think this is too long, you should try to negotiate a break clause. This will give your business the flexibility to be able to grow, restructure or re-locate if needed.
(4) Request lease renewal
Many leases give you the right to renew, but you will need to stipulate this during negotiations. If your landlord is refusing to renew your lease, you should take legal advice.
Learn how to be clear on what you are paying for, how to check planning permission and existing exit terms on page two…
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