Securing an industrial property is one of the most significant decisions you'll make as a small business owner. Whether you're manufacturing products, warehousing inventory, or running a distribution operation, the right space can fuel your growth—while the wrong one can drain your resources and limit your potential.
Start with Your Actual Needs
Before you tour a single property, get clear on what you really need. Calculate your current square footage requirements and add 20-30% for growth over the next 3-5 years. Consider ceiling heights if you're stacking inventory, loading dock requirements for shipping and receiving, and power capacity for equipment. Many business owners underestimate electrical needs and face expensive upgrades later.
Location Matters More Than You Think
Proximity to major highways and your customer base affects shipping costs and delivery times. Check local zoning laws carefully—some areas restrict certain types of manufacturing or have noise ordinances that could impact your operations. Also investigate the labor pool in the area. Can you attract and retain the workers you need at wages you can afford?
The Buy vs. Lease Question
Leasing offers flexibility and preserves capital for growing your business. It's often the better choice when you're in growth mode or your space needs might change. Buying builds equity and provides stability, but requires significant upfront capital and commits you to a location long-term. Consider your 5-year plan honestly before deciding.
Hidden Costs to Investigate
Property taxes can vary dramatically between locations. Ask about CAM (common area maintenance) charges if you're in a multi-tenant facility—these can increase annually. Get a professional inspection to uncover deferred maintenance issues like roof condition, HVAC system age, and parking lot quality. Budget for tenant improvements; most industrial spaces need some customization for your specific operation.
Negotiate Smart Terms
Whether buying or leasing, everything is negotiable. For leases, try to secure options to renew at predetermined rates, flexibility to sublease if your needs change, and landlord contributions toward tenant improvements. For purchases, consider asking the seller to carry part of the financing, which can offer more flexible terms than traditional lenders.
The right industrial property becomes a competitive advantage for your business. Take the time to evaluate your options carefully, and don't hesitate to walk away if a space doesn't truly fit your needs—the carrying costs of the wrong property are far greater than the patience required to find the right one.