Assuming your home is zoned appropriately for your type of business, it can be a great place to start a business – especially if your customers don’t need to come to your office. Carefully consider what your customer interactions will look like, and resist the temptation of many small business owners to purchase or rent a business space. Lower overhead allows you to ensure there is a market for your business before you invest time and money into a space you may not need.
Rent/Buy an Existing Location
For many small business owners, the first thought in their mind is finding a location, usually to purchase. Renting a location, however, can help a business maximize cash flow and borrowing capacity. Additionally, the business owner can test a location before investing in a full purchase. When the business is ready to grow, consider purchasing a permanent location.
If you are looking to rent, you may encounter property owners who use the term “lease” instead of rent. While they are often used interchangeably, a lease is usually for a longer period of time and has more contractual language. Rent is more frequently used for a shorter period of time and offers more flexibility. You may also hear the term “triple net lease” or net-net-net, which simply means the tenant is solely responsible for all the costs associated with the property. Consequently, the tenant will pay the monthly lease fee, the real estate taxes, the building insurance, and for maintenance. Understand the terms before signing any lease agreement.
Build/Create a New Location
Building or creating a new location can require significant overhead and tap into a company’s borrowing capacity. However, sometimes it is necessary to build when there is no suitable existing location. The Rush County Chamber of Commerce can recommend contractors and other tradespeople who are familiar with building in the Rush County area. The Rush County Economic and Community Development Corporation can provide information on land or existing locations that may suit your needs.
There is a trend in entrepreneurship toward using a location you might share with others in a unique relationship. Whether you open a retail kiosk in another retail shop or rent a commercial kitchen during off-hours, there are benefits to pursuing non-traditional space. One, you can try before you buy. Two, you might be able to partner with another company for a mutually beneficial relationship. Three, you can conserve cash while building your business. Depending on your business model, there may be other benefits as well. Think creatively when you decide where to locate your business – it could make a considerable difference.