Setting Up For Success In 2023!

To finish the year, it’s nice to reflect on all that you’ve achieved in the past twelve (12) months, but we also love to set aside some time to plan out the year ahead. Taking time to review your plans, clarify and improve your goals, or even start planning (if you haven’t already), is a great way to set yourself and your business up for success in the year ahead.

While this blog will mostly focus on aspects of planning related to your business premises, it’s important for the health of your business to review all key areas, including: your financials, your organisational structure (whether the current structure is effective or needs to be adjusted or grown to meet your goals), your team / staff (including any upskilling / development or recruitment), and your culture (your organisational values and purpose), to name a few of the key items.

If you need help on the above, don’t be afraid to ask for help. Ask for advice from your advisors, such as your accountant, an HR & recruitment specialist, a business coach and/or a mentor. While this work takes time, money and energy (and at times a good helping of humility, admitting that we don’t know everything), it is worth the investment to give your business every chance of success.
Below, we will touch on some important areas related to your business premises; the commercial property that you lease or own from which you operate your business.

Review your lease

• Do you know when it’s due to expire?
• Do you have an option term on the lease, allowing you to extend the lease if you want to remain in the premises?
  
  • If you do have an option to renew, make sure you understand how and when you need to exercise this further term so you don’t miss the window and so you know what to expect as the next steps.
  • If you don’t have an option to renew, you will need to rely on negotiating a new lease with your landlord (or their agent) to ensure you can stay at the property, or, failing that, understand when you will need to relocate and vacate the property.
  • For tips on options and renewing your lease, read our past blog Tips For Renewing Commercial Leases.

Are your business premises still suitable for your business needs?

• Have you outgrown your current premises, or are likely to outgrow the space in the near future?
  
  • Do you have enough floor space / storage space, adequate external storage, sufficient power supply, or accessibility for your customers, both for your present needs and forecasting for what your business will need in the next 1-3 years?
    
• If you need to expand to larger premises, you can either lease or purchase additional premises or relocate your business altogether.
  
  • If you’re in a lease term, there are options to deal with that obligation, including sub-leasing or assignment of lease, or possibly surrendering your lease (for an agreed cost). If you would like to know more about your options in this respect, and how to deal with your leasing obligations, contact one of our team for some advice.

• If you have outgrown your premises and need to relocate, you should consider whether your best option is to purchase or lease a commercial property.
  
  • In short, while it may be a great goal to purchase your own commercial property for your business, you need to carefully consider whether this is what your business needs, you need to carefully consider whether this is what your business needs. To help you with this decision, you can read through some great tips in our past blogs – Should You Lease or Buy Commercial Property and Renting vs Buying a Commercial Property.
    
  • Once you’ve decided whether it is better to purchase or lease your next business premises, do some market research and make contact with a local commercial real estate agent to assist you. While it’s great to rely on industry experts for advice and guidance, make sure you still use your own wisdom and discernment to get the right outcome for your business.
    
  • When reviewing different properties, make sure that the property you lease or buy ticks all the right boxes for your business needs. To help you with this, you can read another one of our past blogs – Essential Checklist:Buying or Leasing Industrial & Commercial Property

• If you are considering selling your commercial property in the year ahead, there are a number of things you should consider doing in order to prepare and to give yourself the best chance of success, including the following.
  
  • Consider your exit strategy from the property. For example, whether you are looking to sell your business and your property or just your property or just your business will determine who you need to engage with for assistance.
    
  • If you’re looking to sell your business, you should speak with a few business brokers to discuss your options. Make sure you ask them plenty of questions, including what their experience is in selling your type of business, as well as getting their feedback on the value of your business (if you haven’t obtained an independent valuation). You should also consult with your accountant to loop them into your plans, as they will be able to offer you advice on preparing your business financially before you sell.
    
  • If you’re looking to sell your property, similar to the advice above, you should speak with a few commercial real estate agents to discuss your options and to determine what agent will be the best fit for you. Again, if you haven’t had a formal valuation, these agents should all give you their professional opinions on the current market value of your property. If there is real disparity in the advice you receive, make sure you ask plenty of questions and satisfy yourself in respect of any uncertainties. You should also consider the advice you receive from each agent and how well it serves your genuine needs. Before you even meet with an agent, you should take time to consider what your objectives are and list them in a hierarchy from most important to least important (i.e. is timing the most important thing to you, or is the best price the most Important thing to you etc). This little tip will help in your review of each agent and whether the agent is genuinely interested in serving your best interests, or their own. For a few more tips, read our past blog – Choosing The Right Commercial Property Agent To Work For You.

• Consider the timing, both the timing of going to market and the timing for your business operations.
  
  • Following our tips above on finding the right agent for you, a critical item you should discuss with them is the potential timing for selling your property. They should give you some guidance, to the best of their ability, on what the relevant segment of the commercial property market is doing and whether there is an optimum time for you to look at putting your property on the market. Of course, the longer the time frame being forecast, the more chance there is of unexpected market conditions arising that could impact the optimal timing for you to sell (just consider what changes we’ve seen in recent times with the Covid-19 pandemic and ongoing fallout).
    
  • In respect to how the timing impacts your business operations, that’s a more complex issue that will vary from business to business. For example, do you have a busy season or a slow season in your business? Does this create a naturally optimal time for you to relocate your business? Of course, if you don’t occupy the property with your business, this may present a very different equation for you to consider. There may still be other timing impacts that you should consider, and this could be applicable whether you occupy the property with your business, or if you just own the property as an investment. An example of this would be settlement periods. Depending on your needs, a delayed settlement might help you achieve your overall objectives, such as allowing you sufficient time to find suitable alternate premises to relocate your business, or a shorter settlement may be needed to allow you to settle on another property you may be purchasing.

• Do you need to make any improvements to your property before you sell?
  
  • When you’re engaging with your agent, ask for their advice on what buyers are currently looking for (in your market segment) and whether you need to consider completing any works before you go to market in order to get the best value. This may be replacement of carpet or air conditioning (in an office) or a roller door (in an industrial property) or any number of other items that may impact the value a buyer would see in your property.
    
  • If there are works that you need to do before selling, discuss this with your agent and determine the cost and benefits of doing the work before selling, vs the risk and penalties for not doing the work. For example, if spending $5k on carpet won’t make you any extra money when selling the property, if you at least get your money back and it helps to sell the property in a shorter time frame, then it may still be a good decision. This analysis will be impacted by the cost of the works, the time it will take to complete the works, the value you will get back from a buyer and what impact it may have on how quickly you can find a buyer, so make sure you spend adequate time reviewing these points to make the best financial decision for your circumstances.

These tips cover a few of the more common points we discuss with our clients, but the list is by no means exhaustive. Naturally, every business and every client has unique needs and circumstances, so we always take a tailored approach to each client we work with. Hopefully, the above will get you thinking about what you do need to set yourself and your business up for success in the year ahead (and beyond, as this advice is really timeless). If we can help you with some personalised advice to assist you in your planning, please reach out to one of our team. We’d love to help, even if it’s just with some simple, preliminary advice.