Business expansion is often looked upon with apprehension. Yes, it is a gargantuan task with no shortage of factors to consider – so it’s serious business! One thing that gets most business owners is the upfront cash outlay required.
You know the drill – anytime you start or expand your business, you’ll have to take out the checkbook and start making huge investments right? Well, not necessarily.
Turning this age-old thinking on its head is the decision to rent vs buy.
In this article, we look at one of the main things that business owners struggle with in the rent vs buy decision – industrial/warehouse space.
If you’re looking to expand and increase the number of products you’re shipping out, a warehouse is typically the best option. Whilst buying may seem like the more logical choice, there are numerous unique benefits that come from renting out a warehouse. Below, we’ll look at why you might want to consider renting over buying.
It makes sense financially
If you’re considering expanding, it’s likely because you’ve seen a boom in profits and you’re in a good financial position to invest in additional space. However, you need to factor in capital. If you use up all your money buying a warehouse, you may not have the cash available for working capital or other business needs.
Therefore, it makes a lot more financial sense to look to rent in this instance. The initial costs won’t be as huge and it also gives you a back-out plan in case the expansion isn’t successful, or in case anything changes.
It enables you to set up in a more favorable location
Another huge benefit of renting, is you’ll have a lot more choice of where you want to base your warehouse. Buying in popular areas can cost a significant amount. By renting, you can break up that upfront payment into multiple, manageable payments. As your business matures and generates cash flow, you can use that to cover the rental of the premises.
You know what they say: Location, Location, Location!
Location is everything in business, so if you’re looking to set up in a prime location, you’d be better off looking for a warehouse to rent.
It reduces your risk, and increases your flexibility
Buying any type of property always come with some amount of risk. If your business needs change, or the expansion goes even better than expected, you’d have to wait potentially months to sell the warehouse. With renting on the other hand, you can simply move to a bigger, or smaller, warehouse quickly.
There are a lot of companies which offer warehouse rentals, so it’s a good idea to compare them before making a decision. One company you’ll want to consider when looking for industrial units to rent is LCP properties. They are renowned for their affordability and exceptional reputation.
Overall, renting a warehouse can definitely work out a lot cheaper than buying one. It also enables you to have more flexibility in case anything changes, and set up in a more desirable location. So, if you haven’t considered renting, now is the time to find out more.