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Startup Space: 5 Pros And Cons Of Building Your Premises


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Starting a new business is always an exciting time in an entrepreneur’s life. That’s because they build a brand from scratch and watch it grow and succeed.

Many startups have humble beginnings. For example, Apple started from the garage of Steve Jobs’ parents’ home in California, and Coca-Cola began in a small pharmacy in Atlanta.

Of course, there will be times when startups need to launch from purpose-built premises. Deciding whether to build business premises from scratch or lease an existing building can often be challenging, as many factors (such as capital) ultimately influence the decision.

If you’re thinking of constructing some purpose-built premises for your startup business, it’s worth reading the following five pros and cons about doing so before you make your choice:

1. Customization

When you start a new business, you want its premises to look clean, modern, and presentable to your customers. Customizing its design and layout to your needs is always a good idea.

Pro: You Have Total Control Over The Design & Layout

The trouble with leasing an existing building is that you must fit your business around its layout, irrespective of how strangely each room or area gets sized.

Thankfully, custom-built premises for your startup means you’ve got plenty of space, and the design and layout will make sense.

Con: You Might Not Get It Right The First Time

Paying an architect to design your premises and layout according to your needs is one thing. But if they (or you) get it wrong, the ugly truth is you’ll have to pay lots of money to address that problem.

2. Cost

As a startup business, you want to keep your initial expenditure as low as possible. How will that impact you if you’re building your premises from scratch?

Pro: Owning Your Premises Offers Significant Cost Savings

People will always tell you that renting your home is a waste of money and that you should pay to own it instead. The same applies to commercial and industrial properties; you’ll save money owning your premises instead of leasing them.

Con: The Initial Capital Outlay Can Be Prohibitively Expensive

You might be lucky enough to organize a mortgage for your purpose-built premises. But if that’s not possible, you must remember that you must pay for its construction out of your startup capital. Construction costs aren’t cheap, so this might not be an option for you.

3. Scalability

As your startup business grows, you may find that space is at a premium and need more of it to continue enjoying the same growth rate. It’s no secret that purpose-built premises can allow you that scalability.

Pro: You Can Modify Or Extend Your Premises

When you own your business premises, you can scale it however you wish. Of course, that’s only possible subject to local government approval, but that’s better than having little to no choice compared with leasing your premises from someone.

Con: Your Expansion Ideas May Not Get Local Government Approval

If you try to expand your premises on nearby brownfield land, you may not get local government approval without remediation from environmental engineering firms first. Always research land use around potential land to buy to avoid such issues.

4. Branding

Brand awareness is crucial to growing any startup business. Can purpose-built premises positively impact your brand and people’s perceptions of it?

Pro: Purpose-Built Premises Can Increase Consumer Confidence

Purpose-built premises will instill consumer confidence in your startup brand because your target audience will assume a business that makes such an investment in its brand is professional and here to stay.

Con: It’s Not The Best Branding Exercise To Build Trust

Building a commercial property isn’t the best way to build consumer confidence in your startup brand. You must also concentrate on other areas, such as offering excellent customer service.

5. Energy

Lastly, the spiraling cost of energy is making startups think about how they power their offices, machinery, and equipment. Could constructing your own premises impact that cost positively?

Pro: You Can Build Sustainable, Eco-Friendly Premises

More commercial premises are investing in eco-friendly energy sources for their buildings. For example, solar PV panels on the roof can help provide electricity and hot water. Purpose-built premises can positively impact your startup brand’s green credentials.

Con: There Are Better Ways To Go Greener

If you want to promote your startup’s green credentials, you can do so in other ways:

  • Investing in robust recycling facilities;

  • Using LED lighting throughout your premises;

  • Minimizing waste from your manufacturing processes.

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