What may have started as a small home business may now be leading you to making a decision as to whether it is time to find a new location. There can be a lot of reasons as to why you are in this position. It may be that you need a better quality professional setting to meet your clients in, production space is a requirement, or you are needing to hire employees.
While running a home business you have been entitled to certain tax deductions and have had certain tax obligations. You will still have tax responsibilities but these may change as you will have new and additional CRA rules to adhere to.
You will also have many additional decisions to make regarding your new business location. The first one will be where the ideal location will be for your business, and the next will be are you going to rent short term, enter into a long term lease, or perhaps buy the required space.
Your present financial position will play an important role in your decision making. The renting option makes it possible for you not to have to use up your readily available cash and you are only making a short term commitment to your business. A lease is somewhat the same but for a longer period of time, and you can lock in the rates you are going to pay for the space for a longer period of time. If you decide to buy then you are definitely making a long term commitment to your business and the area that you are setting your business up in.
Many types with a lease it comes with a lot of perks that you don’t have to pay for. If space is not at a premium in the area you are thinking of then the incentives will be much more lucrative to entice you to lease.
If you are purchasing then you are going to increase your assets by being the owner of the property, but also your liability for the mortgage you will be faced with. Also, many of the things that are covered in a lease will be your responsibility as the property owner. Maintenance responsibilities will be one of these.
Purchasing commercial property or even signing a long term lease means that you also have to give careful thought to the future. Is the space going to be big enough for any potential growth that you are expecting for your company. Is the area going to remain stable for the type of business you are operating?
These are just a few of the many questions that you are going to encounter. You don’t have to make this decision alone however. There are many facets of expertise that you can rely on for advice and your small business accountant is one of them. Take advantage of their experience and knowledge concerning the financial status of your business.