How to Save Money on Business Premises

In tough economic times business people throughout the UK are striving to find ways to cut business costs.  Premises are often one of a business' biggest overheads and it makes sense during the current downturn to see what steps you can take to reduce your premises costs. 

These ten tips for reducing premises costs could reduce cash flow pressures as well as create a firm footing for securing property bargains in the future.

1. If you are about to move premises, particularly in the office sector, take a short term lease rather than buying. Prices in commercial property will continue to fall throughout the year and you should be able to pick up some real bargains at the start of 2010. 
2. Negotiate hard for concessions for any new lease. Rent free periods of six months or longer are common and are a real boost to cash flow in the short term.
3. Renegotiate existing leases.
   Related Coverage

   • How to Rent Commercial Premises
   Given the current economic turmoil, Poele many find themselves without a job. Often start their own small businesses to survive. The job loss is not always their fault and they must do something to get the bread on the table. When a trader to lose their jobs, do not sit and sulk, get up and do something about it. These small start-up, each a sort of office space and has the good fortune to wor
   • Industrial Cleaning Supplies – Saving Money and Keeping Your Premises Clean
   The industrial cleaning products you use don’t have to be damaging to the environment or to your bank balance. It can be affordable and still give you the most clean and hygienic environment ever.
   • How Vulnerable Is Your Business Premises
   While burglary is not very common in offices and business locations, it still happens. While an alarm system may not be able to keep the thieves out, it can at least deter them and discourage them from gaining entry into the establishment.
   • Political Manipulation Through Implicit Premises
   There is an old joke that starts by asking you, "Have you stopped beating your wife yet?" Whether you answer yes or no it sounds like you are admitting to being a wife beater. It's a practical joke based on the use of an implicit premise - that you beat your wife. The technique is used for more than a laugh though. It's also a favorite of politicians, who use it to manipulate public opinion.
   Ask your landlord if you can pay rent monthly rather than quarterly. This approach is being adopted by major high street chains with some success. 
4. Transfer existing premises into your pension fund. If you've built up a cash rich fund then it may be worth selling any premises you own to the fund and leasing them back to the business. This will release valuable cash for the business to use. Obviously you should take advice on the taxation and other consequences of this step from a financial advisor specialising in pension matters.
5. Negotiate open market option agreements. Whether you are looking to secure business premises or buy a development site, the best policy in a falling market is to negotiate the right to buy the premises at some point in the future at whatever is the open market price at the time. This secures the property for you but saves you having to guess now how much further the market will fall.
6. Use lease renewals to take advantage of falling rents. Rent reviews are still almost always 'upwards only' but when a lease is renewed it's your best opportunity to negotiate a lower rent. Make sure you take control of the renewal process to achieve this. 
7. Adopt strategies to avoid business rates on empty property.
8. Take advantage of tax breaks such as Business Property Renovation Allowance.
9. Minimise your initial SDLT liability on new leases by agreeing a shorter term with an option to renew. 
10. Explore renting out surplus space in your premises. Websites such as wantdontwantspace dot com offer a marketplace for surplus space.

 So don't just sit back, take a proactive approach to your commercial property commitments and you could make substantial savings.