Starting Your First Business: What You Need to Know About Commercial Property

Going into starting your first business is a hugely exciting and challenging venture. You’re building a brand and then you’ll be hiring your first employees, which means that there is no shortage of important decisions that you need to make. However, one of the most critical aspects of launching a successful company is choosing and managing your commercial property.  Whether you’re going to open your own storefront or lease an office space, or even purchase a warehouse, the property that you pick can significantly impact your operational efficiency. It also impacts employee productivity, customer experience, and long-term financial performance. Beyond location or layout, you also have the other element that deserves attention right from the get-go. Commercial foundation maintenance. It’s not the most glamorous of topics, but the condition of your building’s foundation will make or break your business, quite literally over time. Here are some of the things that you need to know as a first-time business owner.

1. Location is about so much more than just foot traffic. For a brick-and-mortar business, location is critical, but don’t stop at foot traffic and visibility. You need to look deeper than that. Is the area zoned properly for your business type? Is there easy access for deliveries and customers with disabilities? Are there parking regulations to adhere to or local ordinances that could impact your operation? You want to be thinking long term, so research potential development plans in the area, traffic trends and whether the site will support your five year business plan.
2. Understand what you’re really buying or leasing. Not all commercial spaces are created equally, even if they appear similar on the surface. Some are sold or leased as is, which means you’re responsible for existing wear and tear. Before you sign any agreement, you should have a professional property inspection done. What if there are issues with concrete? What if the foundations are sinking? Failing to evaluate the property’s condition can lead to unexpected repairs, operational downtime or liability issues that could have been avoided at the beginning.
3. Get to know the zoning and compliance requirements. Commercial properties are governed by zoning laws, building codes, and fire codes. There are even health regulations to consider. If you violate any of these, there could be fines, forced closures, or expensive retrofits. Before you commit to a property, make sure it’s zoned appropriately for your type of business. For example, a retail business may have different requirements than a food service operation, manufacturing facility, or daycare. If you plan to remodel or make tenant improvements, you might also need permits, inspections, or code compliance upgrades.
4. Understand your maintenance responsibilities. If you are leasing, the lease type determines who is responsible for what. Some leases put the full responsibility on the tenant for property maintenance and repairs, but others may choose the landlord to foot the bill. For owners, the responsibility is entirely yours, so if you decide to buy a commercial property, you need to be able to afford it if things should go wrong. This includes everything from snow removal and landscaping to roof upkeep and commercial foundation maintenance.
5. Evaluate your utility systems. You should never overlook the infrastructure that’s built behind the walls. Commercial spaces need more than just square footage, but it needs reliable systems. Check the age and condition of the electrical wiring, plumbing, and heating. If your business relies on specialist equipment or higher than average energy consumption, make sure that the builder can handle the load. Upgrades to these systems can be prohibitively expensive. 
6. Don’t forget to factor in insurance and liability. Your commercial property has a big impact on your insurance costs. Insurers will consider the building’s age, location and previous damage and risk factors. A well maintained foundation, roof and mechanical system reduces your premiums and provides you peace of mind. On the flip side to that, ignoring those issues can lead to claims denials or major out of pocket expenses, including regular commercial foundation maintenance in your facilities plan. This shows providers that you’re managing your risks responsibly.
7. Plan to grow from day one. It’s always tempting to lease or purchase only the space that you need right now, especially as start up budgets tend to be pretty tight. But growth happens fast in a successful business and you want to plan for that type of growth even just to manifest the idea of success. Make sure that your property has some flexibility so that you have room to scale up if you need it. Moving your business because you’ve outgrained your space can be expensive and disruptive, and you can avoid it if possible.
8. Understand the costs. Your property’s monthly lease or mortgage payment is just the beginning because you also have to account for taxes, utilities, maintenance, repairs, insurance and in some cases, association dues or city assessments. Don’t forget those capital expenses like HVAC replacement, roofing upgrades, or major structural repairs. 
9. Build up your team of professionals. You don’t have to be an expert in commercial property to make a smart decision about it, but you do need a reliable team to work with. Usually this includes a commercial real estate agent, real estate attorney, commercial inspector, and a CPA. Having an expert evaluate a property before purchase or lease can help you to avoid major pitfalls. They can also help identify any hidden risks like zoning restrictions or needed repairs. You should consider hiring a facilities manager or a contractor where possible, as they’ll be familiar with commercial foundation maintenance and general property upkeep. With their insight, you’ll be able to guide through the preventative maintenance needed and avoid any costly surprises down the line.
10. Think for the long term. When you’re launching your first business, it’s very easy to focus on short term needs, getting the doors open, generating revenue and gaining traction. Commercial property decisions are long term commitments, however, so typically these will involve multi year leases or significant upfront investment. Properties that work well today become a burden tomorrow and can store your momentum if you’re not careful.