Build Your First Commercial Property
If you are venturing into the world of commercial property construction and getting ready for your first build – there is no such thing as too much information.
Constructing your first commercial building is an exciting thing, and once it is finished, a lot of income will come your way.
If you have been used to residential building construction up until this point, it can be a huge difference, and you need to know it is the right thing for your business.
A few things that aren’t uncommon are for the budget to get blown, delays and unreliable contractors.
Being agile is an essential part of taking a commercial property from a piece of land to a building ready for sale or rental.
What are your options?
The more cash you have, the more options you have available to you. For example, the early stages can be very time-intensive, ahead of the steel reinforcement, brickwork and flooring – you might not want to be on-site every day.
Most entrepreneurs have a lot of other projects going on, and being involved in the daily operations doesn’t always work out for the best financially.
A project manager with the right experience can make this process go smoothly and keep you updated with what you need to know or decide.
At this point, you might decide that rather than building a commercial building, you are more interested in renovating an older building.
If you opt for renovation rather than a fresh build, read this: 5 ways to improve your commercial property.
Even if you have the cash to pick and choose which option you want to move forward with, your bank manager or financial advisor might disagree.
When putting up a lot of the initial investment yourself, you might opt to get some amicable rates from the bank for your build.
In the end, the more realistic your financial forecast is when it comes to revenue, the more likely you will have a choice of backers.
A vital factor is that the build and potential budget issues won’t impact your other businesses.
Permits and Regulations
If you decide to move forward with the build, you need to have all of the permits ready. Each local authority and city will have their guidelines and requirements for buildings and mainly commercial buildings.
Depending on whether you’re building new premises, altering existing premises, changing the appearance of a building, or changing its use, the rules can be quite different.
And don’t forget to consider regulations relating to fair access to the property. Disabled access is a must, and you need to check the rules before installing anything that could obstruct access for people with disabilities. Additionally, your business must invest in accessibility features, such as wedge ramps that can be purchased from places like Chequer Plate Direct, for example.
Architect and Designer
It isn’t uncommon for first-time entrepreneurs to skip the costs of architects or designers. Usually, this quickly proves to be a mistake.
The job they do isn’t just about having some detailed drawings – architects take into consideration health and safety issues, materials used, and how many offices and toilets are needed.
An architect ensures that the build is efficient, functional and beautiful.
Don’t skimp on these costs because when there aren’t enough toilets to meet regulations, it falls on your shoulder to fix it.
It’s also crucial to ensure that costing is done correctly from the start. Minor details in the contract might hide the fact that the quote doesn’t include labour, materials, or other companies’ being contracted in.
If you feel like the quotes you have are too good to be true, they probably are.
Always keep in mind that you will need plan b and plan c.
However, it is not always possible to estimate costs; therefore, be careful to plan for unexpected expenses with a backup plan equal 5% to 10% of the entire project cost.
Even with a fixed-price contract, charges including landscaping, plumbing and electrical changes to facilitate machinery, and relocation expenses can be missed.
A financial consultant can assist firms in determining the feasibility of a building and the amount of cash required from idea to completion. Entrepreneurs looking for finance must expect to be able to present a healthy balance sheet and substantial profitability.
A qualified contractor is required. When researching online, don’t always look at the contractor’s quoted pricing. Additional parameters must also be considered.
Check to see if the company is licenced, financially sound, and ready to give testimonials for the work they’ve done. To protect yourself against cost overrunning, ask your contractor whether they give maximum cost assurances.
It is a precaution that will incentivise contractors to produce realistic figures and control costs appropriately.
And finally, one of the things you need is to be an absolute master in negotiation and know how to resolve conflicts quickly. It’s not uncommon for things to happen during large builds – typically, this comes down to a lack of communication.