What to know about buying a business with real estate

Purchasing a business can be complicated process, especially for first timers. When this transaction includes real estate, things can get even more complex.
While some think that it is a good idea to own the land beneath one’s business, there are an equal amount of reasons why this might be a bad idea for the business owner.

Milepost 31 storefront
 

Leasing during the start up phase of a business just makes sense

The vast majority of business owners lease space for their business. Doing so gives them the flexibility to move whenever they feel the need, and it frees up capital that is crucial for the growth of their start-up.

Despite what many pundits say, real estate is frequently a liability rather than an asset. Real estate booms are usually a short-lived phenomenon; the rest of the time, prices go up very slowly, and maintenance and repair bills associated with property ownership can chip away at a company’s fragile bottom line. For these reasons, we recommend leasing during the early years of a business.

When does it make sense to purchase real estate for a business?

There are circumstances when it does make sense to purchase real estate for a business. Acquire property when:

(1) There is a need to lock down a certain location

Certain types of businesses need to be situated in certain parts of a town or city in order to succeed. If an entrepreneur wants to get into the boutique jewelry business, they would do well to locate themselves in a prime shopping district.

In situations where vacancies are scarce, a successful business owner might want to consider purchasing real estate for their business to avoid having to open their business in unsuitable locations, such as high crime neighborhoods or industrial parks.

(2) Controlling other tenants in the building is a top priority

When space is leased for a business, the business owner will often have no control over other tenants that take up residence in the building.

It may not be desirable to have businesses such as a smelly sandwich shop set up next door if the business owner in question deals in high-value clothing that sells for thousands of dollars a piece.

If a business owner has sufficient capital or financing at their disposal, then purchasing an entire building in order to control who rents out the other stalls might be a gamble worth taking.

Appraise the value of real estate apart from assets of the business

When a business owner with real estate puts their company up for sale, they will often lump the value of their property together with that of their business assets. When this situation occurs, it is prudent to appraise the value of business assets apart from the value of the property.

While this can be a time-consuming process, the extra effort taken will protect the buyer from paying a price that is out of line with what the property and the business is actually worth.

What do Millennials look for in both work and life?

Many hiring managers regard Millennials to be a mysterious lot, as the values that this generation holds stand in stark contrast to what they have embraced throughout their careers. What exactly do Millennials want from their work and personal lives? This article will aim to shed some light on what this new cohort seeks to get out of life.

Coworking Space in Berlin

To contribute towards a higher purpose

Millennials seek to impact the world in a positive way, whether it is through their job or through volunteer opportunities. They want to work with companies that have a clear vision for making this world a better place, as this century has the environment and society at a crossroads.

Enterprises that can best articulate how they are working to help make things better will have an advantage over other businesses in securing top Millennial talent.

The pursuit of a high quality of life

Every generation seeks a quality of life that is better than that of the previous one. Millennials are no different, but they often seek to gain in areas such as time and location flexibility as well.

A decent salary is highly desired by millennials, but perks such as fitness centers, break areas with amusements such as foosball tables, and remote working arrangements often tip the scale in favor of companies that are bold enough to offer them.

To be connected to the things that matter most to them

The rise of the Internet occurred in parallel with the formative years of the Millennials, so it should come as no surprise that they value companies that are savvy with regards to its ability to bring people together.

The internet allows Millennials to be connected to the things that matter to them the most, whether it is the latest developments in the lives of their friends, a hobby that they are interested in, or recent advancements in their field.

Smart companies have taken advantage of this tendency by building social messaging platforms within their intranet. This provides Millennial employees a collaborative tool that enables them to get work done in a manner that is second nature to them.

Financial and employment security

While the above listed qualities are all things that Millennials actively seek in their lives, they desire financial security just as much as previous generations. The last 20 years have seen a shift in the global business landscape, with positions in many industries being automated, outsourced or streamlined.

This has created a climate of job instability, with many Millennials often being forced to shift from one temporary gig to another. Companies that wish to attract top Millennial talent should not discount the impact of offering salaries that are above the industry average, as well as providing a work environment that is forgiving of non-fatal mistakes.

This latter quality embraces the entrepreneurial spirit that many in this generation have adopted in response to the employment challenges that many of them have faced in recent years.