Most start-ups I talk to automatically assume that they will be trading from glitzy, state of the art business premises.
• Having your own business premises is a very costly way of starting up. Many funders and financial institutions are very reluctant about lending money for premises to businesses that are just starting out. So, if you want premises expect to fund them yourself and don’t expect to be lent money to pay for them.
• Have you thought about running your business, initially from home? Not all business types are successful being run from home. Most start-up I work with actually benefit, in the first year, from working at home, saving the huge cost of business premises in the critical early stages of business. Many start-up business actually only need a phone and a computer these days to perform most “business functions.” Making garments in bedrooms is nothing new but in 2007 it makes more economic sense than every before.
• The local councils now acknowledge that many people run businesses from their homes and providing you are not attracting streams of people knocking on your door, you should be OK to operate. If you advertise “Come to Flat 9 for all the best bargains,” the local council will designate your flat as business premises, enforce Health & Safety Standards and charge you Business Rates rather than Council Tax. This is to be avoided at all costs. If you intend to run production machinery from your home, your neighbours may have something to say about it!
• I have run successful businesses from home and only moved into business premises when the business had reached breaking point in the bedroom. I went to see all my customers in their premises or met them in local hotels. Likewise, I would visit my suppliers in the same manner. With so many suppliers listed on the internet, it’s even easier to source from your own armchair now.
• I do meet many aspiring retailers, often driven by frustration at the lack of ‘speciality’ fashion items readily available in shops. I also meet many talented designers who expect to sell their collections from their own shops to all the ‘rich and famous fashionistas.’ I’ve owned a few ‘fashion shops’ in my time and am very supportive of independent fashion retailers but the costs of setting up a shop in 2007 are often far in excess of the money available to start-ups.
• In fact, opening a retail shop is the most expensive of all the business start up opportunities, with many large costs having to be paid at the beginning of the project. So, you find the shop of your dreams, in the ‘right’ location, with the ‘right’ passing trade, at the ‘right’ rental, then what?
• You must pay for the services of a solicitor, they are there to protect you and deal with all the required “legal stuff.” I still don’t understand exactly why this legal process, that surrounds all business premises rental, is so costly and I’m still unhappy about the length of time it takes to get sorted out.
• You will have to pay for all the legal stuff before you receive the keys to your new premises. Expect to have to pay up to 1 year’s rent in advance and then still pay your rent.
• First you will have to ‘make good’ the shop from a Health & Safety perspective, level floors, certified power supplies, all the 2007 building regulations, stuff like that!
• Then you have to fit the shop with whatever you need; rails, counters, mirrors, display stuff, appropriate lighting, heating, tables & chairs; not to mention signage, carrier bags and other branding.
Then you have to stock it.
Then you have to secure it with a system for the products themselves and grill and alarm system for the premises themselves. Your insurance company will tell you what security measures they require before they will grant you insurance cover.
