Taylor&Emmet’s highly experienced commercial property team has been advising those in the manufacturing sector on the acquisition of suitable business premises for a number of years. In this time we maintained it is essential that manufacturers adopt a logical and strategic approach to identifying suitable premises. There are a number of factors which need to be considered:
Location in terms of ease of access to raw materials, skilled workforce, transport links and to markets is critical. Most manufacturers will be looking to be based at an out of town industrial estate. Those companies involved in highly specialised/skilled manufacturing may decide to choose a location that is in close proximity to centres of research so that they have access to the latest developments and technology in their field.
Choosing the wrong location could jeopardise the success of your business.
Before starting your premises search it is essential that you prepare a specification detailing your specific requirements. You will need to consider the size of premises for your workforce and any requirements for housing your plant and equipment. You must also consider the businesses need for parking and facilities for loading/unloading goods and materials.
You must be clear about your business strategy. It is important to consider your future manufacturing plans and whether the property is capable of expansion or whether you would have to move to larger premises if business was successful. On the flipside, you must consider your ability to exit the property in the event that your business was unsuccessful. Advances in technology and manufacturing processes could render the property obsolete/unsuitable.
To purchase or lease?
Are you better off buying or leasing commercial premises? This is one of the hardest decisions a business will make and there are pros and cons with each option.
Leasing is often seen as the most suitable option for new start-up businesses. Where there is less initial capital outlay, saving on cashflow can help free up money to be used elsewhere in the business. It is also often easier to relocate where you have a lease and having such flexibility is important with industrial buildings where design trends change quite a lot rendering a property obsolete.
Buying a property may be the best option for some businesses. Ownership may allow you to make a return on your investment in the long term. You will also you have greater control over the property in terms of its use. The property will not require landlord’s consent before extending or carrying out works (although planning permission and other statutory consents may be required).