Tired of paying rent for your commercial premises and considering buying a premises for your business?

Owning a building works best if your business is well-established, you have money to invest, and you’re taking a long-term approach – it can take many years for this decision to pay for itself.

The advantages of owning a commercial property

• • You no longer need to worry about dealing with a landlord. You’re the landlord now, so your lease won’t end and you get to make all the decisions about how the premises is used. If you want to make changes to the fitout, it’s up to you.
  • You don’t have to worry about rising rent. Eventually, owning a premises will be cheaper than leasing. When you continue leasing, you can expect the rent to keep going up – sometimes the jump may be substantial.
  • If your business moves or closes, you still own the building. This can be a highly valuable long-term asset, depending on the type of building and the potential tenants.

The advantages of leasing your business premises

• • Leasing gives you more flexibility. You can move if your business gets too big for the space, or downsize if more people are working from home.
  • You don’t have to worry about paying building expenses like rates, warrants of fitness, and insurance.
  • Your rent is likely to be lower than the servicing costs for a commercial property loan, boosting cashflow so you have more to invest in the growth of the business.
  • The landlord will take care of repairs and maintenance on your building – when there’s a leak, for example, it’s not your problem.
  • Commercial buildings are typically expensive and financing is costly, so you’ll need to do plenty of research before you decide to make a purchase.

We can run a cost-benefit analysis

Could buying a building be the right choice for your business? We can work with you to analyse the costs and benefits of each option, to help you make an informed decision about which one will put you on track to achieve your goals.

Get in touch today, we’d love to hear from you.

The following content was originally published by BOMA. We have updated some of this article for our readers.

Being the boss means you get to make all the big decisions about your business – including how much to pay yourself in wages, salary or drawings.

As the owner, you might need to underpay yourself in the early stages of building your business, so you can reinvest the profits. But your time is valuable – and you need enough money to pay the bills. So how can you find the right level of pay? It has to be enough to keep the mortgage paid, while also building a thriving business.

If you’re trying to decide how much to pay yourself, here are a few questions to ask yourself:

• • What can the business afford? – You need to leave enough cash in the business to keep it ticking along, pay your basic costs, and meet your tax obligations. Once you’ve considered all those outgoings, how much does that leave you as a potential salary? We can help you work out what that number is, so you can establish a sustainable rate of pay.
  • What’s the market rate for your role? – What would you have to pay someone to do the work you’re undertaking in this business? Maybe you wouldn’t actually be able to find anyone to work the same long hours, but if you were hiring someone with your experience, to do the same sort of work for 40 hours a week, what would they expect to be paid? That number is a good starting point for thinking about your own salary or drawings. If you’re being underpaid, it’s time to think about ways to grow your profits. If you’re being overpaid, congratulations on building a highly profitable business!
  • Could reinvesting profits grow your income faster? – You can take all the profits out of your business, which should give you a strong and sustainable income. Or, could you reinvest your profits and grow the business faster, leading to a higher income in the long-term? You might choose to spend some of your profits on advertising, a better website, or developing a new offering, for example. Or you could pay for assistance in some area of the business. If the investment leads to higher growth, it might be well worthwhile.

We’ll help you run the numbers

We can help you figure out how much your business can afford to pay you, analyse the potential gains of a business investment, or weigh up the pros and cons of hiring someone to help you.

Get in touch, we’d love to hear from you.

The following content was originally published by BOMA. We have updated some of this article for our readers.