Stop Renting Your Business Future: The ROI of Owning Your Operational Space

It is almost 8 am, and you stand in your unit holding a rent-increase letter and sipping your coffee. The roller door is open; there is a delivery arriving shortly. People are already walking past you. There is nothing different than normal about the morning. However, that single piece of paper alters how the next twelve months will look for you.

This is often when the transition of thought begins. The decision to pursue buying your operational space usually doesn’t occur from a formalized grand plan, however, rather through the repeated experience of frustration associated with renting the space your Business needs to operate out of and making improvements which ultimately seem like they could be removed at any moment.

The Payment Of Rent Prevents Businesses From Viewing Long-Term Planning With Permanence

Because the rental agreement is continually expiring, you delay improving shelving because you don’t want to spend money based on an unknown future. Similarly, you may settle for having a “good” front office instead of an excellent one because it is difficult to rationalize investing money in someone else’s building. Those small delays add up.

Once you purchase the operational space, this type of decision-making becomes less difficult. Since you now control the building, you can design operational space based on how your business operates as opposed to designing around a lease term.

What You Pay For Rent Will Leave No Legacy

Rent allows you to keep the doors to your business open each month; however, each month’s payment leaves very little. Each month’s payment to rent represents an ongoing expense, as opposed to an investment or a legacy.

In contrast, a portion of each monthly commercial mortgage payment to finance your building represents a tangible investment in your business. In addition to providing you with additional responsibility as the owner of the commercial building, ownership provides you with a longer-lasting form of equity (or value) in your business. Therefore, the monthly expense related to operating a commercial building is transformed from an ongoing expense into a lasting legacy.

A More Efficient Space Can Enhance Everyday Business Operations

While most commercial buildings come with minor inconveniences, such as a poorly designed loading dock or stock must be transported through a circuitous route, etc., these types of inconveniences become an accepted part of doing business. While none of these individual items appear dramatic by themselves, collectively, they slow the day down.

Since you now have complete ownership of your operational space, you can design your operational space around your specific workflow needs. For example, you can design a layout that allows for greater efficiency, improved access, etc. You can even design customer-accessible areas of the commercial building to project an image consistent with the level of quality represented by your business. The benefits of increased efficiency are reflected not only financially but also in terms of reduced stress/frustration and in a working environment that meets the needs of the employees performing their respective jobs.

Long-Term Stability Provides Significant Benefits

Knowing that you are building your business on a foundation where you are not under pressure to renew your lease can provide great confidence in how you allocate resources towards investments in equipment, staffing, and within the building itself.

If your business is well-established and appears to remain located in the same location, purchasing your operational space is among the more pragmatic business decisions you can make. When you purchase your operational space, you are not simply paying for a place to go to work each month. Rather, you are establishing a base for your business which has long-term potential for retaining its value while simultaneously continuing to support the daily activities of your business.

Via Unsplash

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