Starting a business takes a lot of effort and involves more than a few decisions. As vital as each of these are, one that’s overlooked is where it’ll be based. That decision could be determined by practicality; you might only be able to afford to set it up at home, for example.
When your business expands, however, your home-based business mightn’t be ideal. That’ll naturally lead you to consider where your company headquarters should be. There’ll be multiple high-quality office and manufacturing buildings that you could choose from.
You’ll need to determine whether these will be ideal for your company. You might have several factors involved in your decision. Though some of these will be obvious, such as space and cost, a few things mightn’t be.
Coupled with that is whether you should buy your company headquarters or rent it. You’ll have to consider a few questions before you decide where to base your company.
How To Pick A Company Headquarters
Is It Close To Talent?
There’s a reason why many international companies choose to base themselves where they do; it gives them access to a large pool of qualified talent. That makes hiring high-quality and skilled employees much easier.
Some areas will have more unique and specific talent pools than others. Tech workers are typically based in Silicon Valley and the surrounding area, for example. Depending on your industry, you might want to consider setting up in a specific city.
While this could mean higher costs, it’ll lead to better employees, which will be more beneficial to your company than a more affordable headquarters. While this can be less important in the era of remote working, it’s still a factor that you’ll need to consider.
Will It Need Much Maintenance?
Once you’re using your company headquarters, it’ll put up with some wear and tear. There’s no way to avoid this, although you could minimize the amount of maintenance that it will need. If you’re renting, then much of this will be the responsibility of the landlord.
While you mightn’t have to pay for these, it’ll still affect your business. That could be seen in employee downtime and a lack of productivity until the issue is resolved. It’s recommended that you choose a premises that are as low maintenance as possible.
Newer buildings will typically be the better-recommended option for this. When you’re deciding, it’s worth looking for a few features in particular. New appliances and plumbing and electrical systems will be some of the more notable.
You should also pay attention to the roof, as this could need just as much maintenance as other areas. It could be worth picking a building with Thermoplastic Polyolefin (TPO) roofing. That could need much less maintenance while also offering additional benefits. You can find out more at the ultimate guide to TPO roofing.
Is It Close To Other Businesses & Services?
Your business will have suppliers and contractors that provide services to it. How close will your company headquarters be to these? The further you are, the larger the cost associated with them could be. Naturally, being close in proximity to them could also reduce these expenses.
It’s worth choosing a location that has multiple options for suppliers. By doing so, you can compare different choices and make the best decision for you. If you need a specific type of supplier and an area only has one of these, for example, then you’ll be forced to use them.
That could mean paying more than you should. With more options, you’ll naturally be able to negotiate more, which will be more than beneficial as your company grows.
Is There Room For Expansion?
You’ll want your company to be as successful as possible. That’ll typically entail scaling up to meet your customer base and growing market share. Will you be able to do that in the property you’re considering? If the answer is a ‘no,’ then you mightn’t want to consider it.
In the past few decades, many companies have based their headquarters in suburban areas. That gives them a blank slate to expand from. While this will be a choice primarily if you’re building your corporate headquarters, it could also be an option if you’re renting.
You’ll still need to consider what your needs are now. At the same time, however, you’ll need to consider your business plan and long-term goals. Will a specific property help you achieve these goals or restrict them?
Starting small and slowly extending your company headquarters as you scale could be a recommended option here.
What’s The Overall Cost?
The price of your company headquarters isn’t all you’ll pay for it, regardless of whether you’re renting or if you buy it outright. Instead, there could be multiple hidden costs and fees that you’ll need to be aware of.
Many of these could be related to maintenance and repairs. Coupled with that are utility bills. Larger premises will naturally require more electricity and heating, so your bills will be higher. You could also be surprised at how different your bills will be depending on where exactly your company is based.
While this will typically be seen on a city-to-city basis, it can also be seen in various neighborhoods. Renting or buying corporate premises in the city center, for example, will be much higher than if you were a short distance outside of it.
That can be seen both in the asking price for the property, alongside the average utility bills. In many cases, the overall cost of doing business in certain areas will typically be higher than in others. You should consider that when making your decision.
Even considering property a few miles away could have a significant impact on the overall expenses you’ll have to pay.
Should You Rent Or Buy Company Headquarters?
You might wonder whether you should buy or rent your company headquarters. If you’re a start-up, you mightn’t have the option to buy and may be stuck with renting. Should you have the opportunity to buy, however, then it could be worth considering.
Buying your company headquarters could provide multiple benefits. The most notable of these are:
- Long-term cost benefits;
- The ability to sublet, and;
- Being able to customize the property as you see fit.
There are several potential risks and disadvantages, however. These revolve around the upfront cost investment, alongside needing to perform regular maintenance. That could lead you to consider renting instead. Doing so has several advantages, including:
- Rent can be deducted from your taxes;
- It’s a more straightforward approach, and:
- There’s less work involved.
Which option you choose depends significantly on your circumstances. For start-ups and small businesses, it could be worth renting. With larger firms, however, buying could be increasingly recommended.
Figuring out how to pick a company headquarters could take more time than you’d think. Since you’ll want your business to scale and grow, you’ll want to think long-term with your decision. You can’t ignore what your needs and restrictions are now, however.
That could lead to the choice being a careful balancing act. It’s possible that you can have a temporary headquarters for now and get a permanent one further down the line. That could be recommended for several ways, especially if you’re a start-up or small business.
It could also lead to multiple negatives, such as the additional cost and hassle associated with a move. Sitting down with key decision-makers in your business and having a plan will be a priority here. Spending the time determining what your company’s needs are and the best path forward for the business will cut out a large amount of the headache and stress.