One of the best examples of this I’ve come across recently has been the small businesses operating out of lockers at self-storage centres.
Lots of small businesses start out as kitchen table enterprises, or in my case a back-of-van-operation, but, if successful, the home office is quickly outgrown and the first milestone of growth can actually become a millstone if affordable premises can’t be found.
When I started Pimlico Plumbers, I found a basement underneath an estate agent’s office that became my first proper base. The rent was reasonably cheap and it was done directly with the building owner.
Unfortunately, transactions like that don’t happen as often today as they did 20 or 30 years ago and, now, unless firms want to set up in an unsecure lock-up in a back alley, new businesses tend to be shepherded towards business parks for available space.
While these come with the prestige of having modern and attractive business premises they also come with the additional, and sometimes, heavy costs that a small business could do without when it makes that first big jump in its growth.
Which is why the storage locker idea is straight-up entrepreneurial genius. Especially if you are running an online business where your website, rather than your premises is your shop front. It’s a great way of having somewhere to store goods and organise distribution.
While the High Street is suffering from a rise in empty shops it appears that the use of storage units is going in the other direction. Most significantly businesses operating out of these places don’t pay business rates. This is because this is the responsibility of the storage park owners who can therefore spread the cost between their domestic renters and commercial occupiers.
There is a VAT requirement on the rental of storage lockers, which was introduced by the Treasury in 2012 and will have affected private renters, but, of course, for VAT-registered businesses, it can be claimed back.
Of course, like most innovative business ideas, there’ll probably come a time when the Treasury’s ears prick up to this practice and want to classify these enterprises in a new bracket that requires them to pay rates.
I’d urge the Chancellor and his team to give these guys some breathing space, because of the positive impact they are already having on the economy through tax receipts and job creation.
It would demonstrate their support of entrepreneurialism, which is most definitely alive and well in the corrugated corridors of storage units up and down the country.
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