Don’t have business premises unless you absolutely need them. That is one of my mantras. I recently had my windscreen replaced. The process was interesting but the really interesting thing was to hear from the guy on the tools, how the screen replacement company has changed working practices and so reduced its property overhead quite dramatically.
Instead of having a portfolio of industrial units across the country for fitting glass, at a cost of millions every year, they all operate from vans. The orders are sent to the van and the materials are picked up from a sort of oversized safe-deposit box. There is an office somewhere dealing with the administration but, for that business, the industrial units are a thing of the past.
The rationale is that carrying a vast property estate makes the business cost heavy and therefore vulnerable. Better to run vans you can sell if you need to and flex the headcount to meet demand.
The main point being the company profits are increased by not carrying the massive liability premises represents, some of it unquantifiable, and using innovation and technology to deliver the service.
So, think about it – don’t have premises unless you absolutely need them! If you do, have the right premises in the right location, on the right commercial terms.
