When it comes to business expansion, space plays a very important role. Very often many businesses expand just because they got a big enough space that spurred and motivated them to grow into it. The space in question varies depending on the type of business obviously.
For companies that specialize in certain professional services and are looking to accommodate more staff, office spaces are a natural fit. However, businesses that deal with the manufacturing of products most often need warehouse spaces when planning an expansion. These spaces are used for manufacturing, storing, and distribution of products.
The expansion stage of a business is very exciting one that lifts the spirits of every staff member. This is because it is an indication that there is a need that the business is helping to meet and is by obvious factors doing well at it. In this euphoria it is easy for business owners to miss a few important details especially when it comes to leasing or buying warehouse spaces.
Searching out a warehouse space can be a difficult endeavor; however, it might be a lot easier than you think, especially if your business is already located in a manufacturing district or zone. Start by asking around and you may find a warehouse shop for rent near you, and if that doesn’t work, you can always hire a tenant representation broker to do all the hard stuff for you.
In this article, we’ll cover a few things you should know before signing on a property’s documents.
Square Footage
Of course, the first thing you would want to be sure of is the actual amount of space you would be needing for your expansion. In deciding the amount of space you need, you need to consider the type of product you’re manufacturing and the type of storage that best suits the product. In order to be sure of the amount of space you’ll be needing, ask yourself the following questions:
- How feasible is it to stack the product?
- Would we be investing in forklifts? If not, how much space is needed to store all the products within arm’s reach?
- Will the amount of space I’m considering buying be enough to accommodate future growth?
Another important consideration is confirming if in the event of further expansion, you would be able to pay for more space at short notice. Lastly, be sure you are paying for only the square footage you would actually be using because sometimes, a landlord may charge you for the space taken up by the walls of the warehouse.
Local Climate and Weather Conditions
While expanding, you wouldn’t want to damage your products, would you? To avoid damages that may arise from storage, ensure that the local climate and weather conditions where the warehouse is located is suitable for your kind of product.
Humidity, heat, or cold are common weather conditions that compromise the state and quality of many products. Ask the property owner if the warehouse has heat, ventilation, and air (HVAC) systems, if your product require some sort of temperature regulation when stored. If the warehouse meets every other requirement but doesn’t have a HVAC system, discuss with the landlord how to go about installing one.
You can click here to learn more about HVAC systems.
Accessibility
Before leasing a storage space, you should consider its accessibility. If you’re planning a big expansion, you would want a property that is wide enough for trucks like an 18-wheeler to move freely about. Also, ask yourself if the space you are getting will be used for only manufacturing or storage, or both.
If it would be used for both processes, you would want to consider getting a large space. Overall, ensure you consider all the possible scenarios for which the space may be used. It pays to have an area that would do just fine for anything you plan on doing in the future. Ceiling height should also be duly noted especially if you plan on carrying out production with large equipment. If that is the case, then a building with high ceilings will help in ventilation.
Lease Length
How long you plan on making use of the space is another very important consideration. Sometimes, a manufacturing company may need extra storage because demand for their product tends to increase at certain periods of the year. For example, chocolate and toy manufacturing companies are very like to need extra storage spaces because demand for these two products explode towards the end of the year.
If you’ll need the warehouse for only a few months, make sure that the owner of the property is fine with that. On the other hand, if it would be a long-term commitment, make sure to negotiate a lesser price as you would be entering a long-term relationship with the landlord.
Naturally, property managers will try to convince you to sign a longer-term deal and they can be very persuasive. If you’re not confident that you will hold your own against them, go with your lawyer. Finally, do your due diligence before even entering the negotiation stage. Make sure you know the market prices for the type and size of warehouse space you are looking to lease. Visit https://www.bdc.ca/en/articles-tools/money-finance/buy-lease-commercial-real-estate/how-to-negotiate-commercial-lease-effectively to learn more about negotiating a warehouse lease.
Bills and Utility
Ensure you establish the bills your company will be responsible for and those the landlord will have to cover. Very often, you will be responsible for covering trash expenses. If you will be carrying out production with heavy equipment and machinery in the building, make sure the building is equipped to handle your electricity needs and workload. You wouldn’t want to risk damaging your equipment to faulty wiring and poor circuits.
Final Thoughts
Most times, companies do not have a lot of time on their hands to plan the amount of square footage they require for proper expansion. To save time and energy, outsource the job to a tenant representation company. These companies have expert knowledge in figuring the out the amount of space you’ll need, finding the most suitable space, and getting the best lease terms.
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