For many growing businesses, leasing commercial premises is an exciting milestone. Perhaps you have outgrown the kitchen table, your team is working remotely and would benefit from collaborating in one place, or you are planning to recruit more staff and need room to grow.

Whatever the reason, signing a commercial lease is a major financial commitment. Looking beyond the monthly rent and understanding the full cost of occupancy can help you avoid unexpected expenses and ensure your business remains financially secure.

We work with growing businesses to help them make informed financial decisions. Here are some of the key areas to consider before signing on the dotted line.

Make sure the premises support your growth plans.

It can be tempting to choose a property that suits your business today, but it is worth thinking ahead.

Will there be enough space if you recruit more employees? Is there room for additional stock or equipment? Is the location convenient for staff, customers and suppliers? Choosing premises that can support your business over the next three to five years can save the cost and disruption of relocating too soon.

Understand the true cost.

The rent is only one part of the picture.

Before committing to a lease, calculate the total cost of occupying the property. This may include:

• Business rates
• Service charges
• Buildings insurance contributions
• Utilities
• VAT on the rent
• Rent deposits
• Legal and surveyor fees
• Fit-out costs

Many commercial leases also require rent to be paid quarterly in advance, which can significantly impact cash flow if you are not prepared.

Think carefully about flexibility.

No one knows exactly how their business will develop over the next few years.

Consider whether the lease includes a break clause that allows you to leave early if circumstances change. Also check whether you have the right to renew the lease and whether you can assign or sublet the premises if you no longer need all the space.

Having flexibility built into your lease could prove invaluable if your business grows faster than expected or your requirements change.

Budget for future increases

Commercial leases often include rent review clauses, which allow the rent to increase during the lease.

Understanding how future rent will be calculated and building this into your financial forecasts will help you assess whether the premises will remain affordable in the years ahead.

Don’t overlook repair responsibilities.

Many business owners are surprised to discover they may be responsible for repairs and maintenance, even if they do not own the building.

You should understand exactly what your repair obligations are and whether you could be required to return the property to its original condition when the lease ends. These costs can be substantial if they have not been planned for.

Check your cash flow.

Moving into commercial premises usually requires a significant upfront investment.

Alongside deposits and professional fees, you may need to purchase furniture, equipment and technology while maintaining enough working capital to continue running the business.

Preparing realistic cash flow forecasts before committing to a lease will give you confidence that the business can comfortably meet its ongoing commitments.

How we can help

Leasing commercial premises is about far more than finding the right building. It’s about ensuring the numbers work now and in the future.

We help businesses assess the financial implications of leasing commercial property, forecast future costs, review affordability and work alongside your solicitor to ensure there are no unexpected financial surprises.

If you’re considering your first commercial premises, speaking to your accountant before signing the lease could help you make a decision that supports your business for years to come. If you would like our advice, then please do get in touch by calling us on 01623 490 120 or by emailing This email address is being protected from spambots. You need JavaScript enabled to view it.