I'm looking into starting a business and will need to have premises to trade from.
I'm based in Central London so property is impossibly, eye-wateringly expensive.
I've spent a long, long time looking at listings and trying to find something suitable.
I've finally found a small industrial unit (1000 sq.ft) for a "reasonable" rent; at £27,000pa. already I'm being robbed
On top of this I would need to pay a £5,000 pa "service charge".
And then amenities and business rates on top of that.
Now, I'd finally got my head around the fact that I'd be paying out £32,000pa plus costs for a glorified shed when I discovered something referred to as "Lease Premium".
The landlord expects to receive an additional lump sum of £20,000 (plus VAT). It is non-refundable, it is not a deposit (that also has to be paid) and is a fee payable to the owner for accepting the transfer of tenancy from the “old tenant” to the “new tenant”.
In this case, for a lease that is for 3.5 years.
Bearing in mind that in commercial leases, the tenant takes over responsibility for the maintenance and care of the building - should the roof collapse, for example, that would be the tenants responsibility. So the tenant is actually paying to maintain or increase the value of the property, without actually benefiting from it (other than being allowed to use it for a set period of time).
AIBU to think that there is something very very very wrong with this?
How can this even be legal?
I must be missing something here.
(Also, I apologise for such a boring AIBU. Commercial land law, snore! But I'm aghast and needed to rant!)
AIBU?
to think this is grossly unfair and complete robbery?
RentANDBills · 08/11/2016 12:29
Owllady unfortunately not. The success of the business would be largely based in its location 
I'm almost positive that it would be very very successful (working on a business plan to look into everything in detail) but the upfront costs are absolutely terrifying.
BitOutOfPractice That's currently what I'm looking at 
it's madness to think it would actually be cheaper to buy than to rent! But at least we'd benefit from any money spent on the building.
LurkingHusband That's an excellent point.
We'd be hanging back for the next 6-12 months, partly because of this and partly to get a better idea of the market in general. My other small business is currently suffering from Brexit as all of my suppliers have massively increased their prices.
QueenJuggler That was my initial thought. I have huge long spreadsheets going over each detail. I've almost become a business stalker and analysed similar companies in the area. Despite the extortionate rental rates, there still seems to be a healthy profit to be made.
I'd actually written a colossal reply detailing the breakdown but realised that I don't want to bore you to death!
The summary is that by just offering one type of class the revenue would be £1050 after teachers were paid. All in (rent, rates, lease premium, utilities, service charge) the cost of premises would be £868 a week. I'd aim to provide several more classes plus other such ideas. So the basic expenses would be covered with one class, anything else is profit.
There is a real demand for it, I came across it after being told to join a 6 month waiting list for a pottery class!
A huge chunk of my problem is confidence. I've crunched the numbers, rounded up expenses as if I'm trying to convince myself I can't do it. I come from a working class background where I was taught that if I wanted to make money I needed to become a lawyer or a doctor.
There is an insidious line of thinking in my family that women can't do business either, which just fuels me.
Rant over 
BoffinMum That made me laugh. (Also a very good idea, I'll add that to the research list) I think some of the equipment is exquisite. DP gets slightly worried about me finding a Victorian letter press exciting.
Highfivethatfart Thanks its all a bit pie in the sky at the moment, I'm drowning in spreadsheets and bore DP to death with hours and hours of research in the evenings. I was talking in my sleep about it last night, apparently. I'd say I need to get a hobby, but this is it!
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Our local adult ed classes are closing from not enough students, and are pretty well subsidised, (although still not affordable to me 
)so I'n surprised you feel you'd be able to run a profitable business offering such courses when non profit making courses can't afford to run, are you in a particularly wealthy part of London then?!
Me and DD would love to do pottery, especially after watching that pottery programme on TV last year...but we are up north .
I m sure you have crunched the numbers, but would echo Adarajames concerns though, is there enough money to be made? Whilst I would love to do this I only have a small disposable income so there would be a ceiling on how much I would be prepared to pay. You definitely need to tap into the London money and be open from dawn to dusk.
Could you join up with an existing 'business', say as a teacher, to gauge demand - or 'rent a space' and build up clients?
Are there any start up premises
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