Should You Buy or Lease Your Location?
When finding space to house your food service business, there is a lot to consider. The most important thing is whether to purchase or lease a space. Both are common in the industry and they each have their own unique advantages and disadvantages. Depending on your cash flow and your interest in making a long-term investment, there are other factors to consider that will help you make your decision.
If you have your heart set on a specific location, then your options may be limited. You may find that the only available spaces in the area are for leasing, or that they are only available for buying. Even if you do not have a specific location in mind, you may find that those locations that promise success will only give you the option of either leasing or buying. Obviously, the location of your business can impact whether or not you will be successful. Therefore, you may have to take whichever option is available to you at the location of your choosing.
Rules and Regulations
Rules and regulations may not play much of a factor if you choose to buy, but they can seriously impact your decision to lease. Many leased buildings have specific rules and regulations about improvements, modifications and expansions. You may be limited by more than what you can do on the inside. Some spaces will even have rules about what is allowed on the outside. When you look at a space for leasing, it is important to find out what rules and regulations apply to the space. From there you can determine if it is a good choice for you. It might be fine in the short term, but you should also consider the long term impact on your decision. If you think business growth will leave you with a need to expand or modify your space in the future and leasing doesn't allow for that, then you may want to look elsewhere.
When you purchase a space, you will need more up front money than if you choose to lease. In this regard you may find that leasing your space is more beneficial to your business and your budget. Aside from upfront, costs you also want to look at the other costs associated with making your decision. In some cases your lease will state that the building owner is responsible for building repairs and maintenance. This can be a valuable savings for a new business that is trying to establish itself. You also want to find out if your lease payment includes taxes and insurance. While purchasing gives you the ability to use your site as you see fit, you may find that leasing is more cost-effective for you.
The decision between leasing and buying is one that involves several factors. If you opt to lease it is important to make sure that you are protected from anything that could cause harm to your business. You want to be certain that the lease period allows you ample time to establish your business without worrying that you might lose your space. You should always have an attorney look over any documents, no matter whether you are leasing the building or purchasing it. This way you know that your business will be protected regardless of your decision.