Light industrial units - cost?

Hudson1984

Hi all, I've started a little online store and it's going really well! selling £1000 a month so far (yup got an accountant on board)

I could increase this by having a fixed set-up i.e a store. (i've made previous threads on this) but wondered about using a light industrial unit to run from instead. The store wouldn't actually make huge amounts of money during the day but would provide a hub (and much needed storage space for stock!) But it would mean I can open for "flash sale" type things at weekends which is when most of my customers tend to shop.

So just wondered if anyone could give me a bit of a breakdown of costs I should expect. As if it works out too high then the spare room will be the way forward for the foreseeable future lol

Any help would be great. Sorry if this is in wrong place too

Carer

This is far too wide a question to answer really without more detail.
It depends on area, demand for units but most of all the square footage that you are looking for.

Easiest way is to look on rightmove for commercial property in your area and see what the results look like.

Hudson1984

its' not the rent i'm looking for. it's the costs in addition to rent, surely these would be comparable?

chalkie99

If you are turning over only £1,000 a month then you cannot even be earning a living wage so think long and hard before taking on liabilities like a unit.

Depending on location you could typically pay around £4500 a year for a three year lease on a small unit (say 600 sq ft) which means you are instantly legally liable for £13,500 as soon as you sign.

Rates on something that size are free at the moment but should probably be budgeted for in case government policy changes.

Then you will have service charges - say £1250 per year, commercial waste contract (compulsory), gas/electricity contracts for heating and lighting, telephone line, card terminal for payments, water rates, insurance, .............

Honestly, don't do it until you are far more established.

Hudson1984

oh i'm not lol, I work full time, this is a sideline really. Just thinking out loud and wondered about the costs involved for the next step is all.

I just like to have an aim. Knowing approximate costs make it alot easier to see where things need to go before making the plunge is all.

I'm in no way thinking of doing this tomorrow lol, just interested to see what I would need to be bringing in to venture out and if it's too expensive I won't bother.. Just trying to educate myself on the matter so I can make the most informed decisions and drive the business in the right direction - no point aiming for a unit if the figures are never going to balance. But without knowing those figures I can't say

paulofessex

In relation to space needed for stock l wonder if you would be better off at this time looking at Self Storage, some places accept deliveries for you and plus your stock would be insured.

Your accountant would be able to advise you on what tax relief you could possibly obtain.

Hudson1984

Yeah I had read an article in the Telegraph about people using self storage as actual shops and gyms etc. So it's possible.

thanks for the comment there, exactly the sort of constructive comments I was after. I'm not wanting to do this straight away, sales need to increase before any of this, just want to head in the right direction etc

COOLTRIKERCHICK

you can at least the same amount and a bit more than what your rent costs you.

This is where a lot of sideline businesses come unstuck. I would go on rightmove, and have a look at commercial premises to rent, and then do a 'general' inquiry about rates, service charges, don't forget rent, service charges etc are subject to vat...

Also even if you don't use any utilities you will be subject to the meter standing charge, and water rates etc. buildings insurance, which is normally payable to the landlord, and you have no control over, if the premium goes up.

personally I wouldn't be looking at units with that type of monthly turnover, as its not high enough to warrant renting a unit...

Hudson1984

I'm sorry but I had said it's a case of looking into it for the future to see if it is at all viable and if so what turnover I would need in order for it to work for me... I don't mean to be rude as I am grateful for the feedback but people on here do jump at things sometimes.

I had asked the question purely as a "ok this would cost me £xxx a month, this means i'd need my turnover to increase to £xxx in order for it to be worthwhile"

I'm sorry if I've not been clear but please, for future replies...Be aware this is not something i'm planning, it is something I'd like to see if it is worth planning or if I should steer in another direction as the overheads would outweigh the benefits etc

COOLTRIKERCHICK

bottom line is, not how much you turn over, its if you make enough profit to cover your costs...

You say you are selling £1000 worth of goods etc per month, do you know how much of that is actual profit, after taking into account ALL expenses???


I think you are being rude... you asked for our opinion and advice and you got it... We are just trying to be honest and realistic to save you getting yourself into a financial pickle..

No one can give you accurate figures on how much it will cost, its like asking how long is a piece of string.. units can go from £1.10 per s ft to £15 per square foot around here.. and you can have units from 300 square foot to 40,000

earthstorm

Until we know your stock rotation and markup it would be hard to work out actual costs of a unit compared to your actual profit.

But for me after all expenses for every £1,000 taken about £300 is profit. I was looking at small units so i can sell direct from my online stores, but decided just to keep to dropshipping, although i am in talks with a large factory who has a factory shop and some spare rooms that they are willing to rent out. the room is 15ft x 15ft and they want £150 a month, trying to get this down to £100 a month. The say i can also sell some items in their factory shop. so if the OP wants a unit then see if any local factories have a spare room to rent