Finding just the right spot for your new business – whether it’s a
store, an office or a shop – can be a daunting challenge. The
technicalities of tax codes and other regulations, as well as the
characteristics and quirks of local real estate markets, can seem like
a maze.
Here are some tips to help guide you through the process:
First, sniff out tax breaks or other incentives
There
are plenty of cities and states that will greet you with open arms,
tasty tax breaks and other incentives – if you choose a location on
their redevelopment agenda. Many of them are trying to attract new
business to revitalize their downtowns, commercial and mixed-use
neighborhoods. Start with a search of their websites for such
opportunities and the relevant contact information for the appropriate
government officials. Be sure to determine whether the tax breaks and
incentives require you to hire only local, resident workers. Then
broaden your search. You’ll find the phrase “research tax incentives
for commercial real estate” produces more than 6 million places to
start.
Now, go another step further in your online research
There
are many central, informative and timely sources of information on
national and regional real estate markets and their particulars that
can be found with a little online searching.
Among the virtually unlimited choices are: Black’s Guide,
which offers free access to timely information on a claimed 80,000
properties and 30,000 real estate pros in major markets nationwide; and
GlobeSt.com, whose stated mission
is to provide “in-depth and breaking commercial real estate news around
the clock in major and secondary markets throughout the country.” They
are by far not the only such info resources on the internet.
Find a broker who’ll be a “champion” for your needs
Interview several brokers before you choose one. Be certain they understand your type of business and what you need out of the real estate process. A good one will steer you to the right location at an affordable price.
“You
want to identify a champion, which is not necessarily a quick process,”
says Camille Hoheb, director of real estate for Medspa Development, a
skin-rejuvenation provider based in Irvine, Calif.
…but never take their word for it
You,
personally, must become an expert on the tax opportunities, codes,
ordinances and other specifics for your prospective area. Most cities
and municipalities have websites where you can find basic information.
Then
talk with city officials in zoning, licensing and inspections, and
others with locally specific expertise. You don’t want to find out after
the contract is signed and the first payment made that, despite your
research and your broker’s assurances, your choice location is
restricted from certain essentials of your business, or that tax breaks
and incentives are tied to provisions you missed (see local hiring
requirements above). Sandy Shaud, executive producer of
RealEstateInvestmentTV.com, in southern California, says bluntly:
“Never take the Realtor’s word or the owner’s word for it. Go right to
the source.”
And before signing or paying for anything,
compare the same information in competing locations: You may well find
that the tax breaks are better, and the taxman’s due smaller, in a
neighboring city or township.
So now you’re ready to make your big move?
Slow
down. You may find very quickly that you have to work with a city
council or township board to get approval. Going to town meetings can
be helpful groundwork. That’s getting down to often tedious research,
much of which will do you no good, but you’ll probably get the flavor
of what existing businesses, and other startups, have to confront in
doing commerce there.
Once again, talk to people who
already are, or have been where you’re going. You’ll be able to draw on
their experience and, armed with the information you’ve gathered from
zoning and other departmental officials who will affect your
operations, you should be pretty well-armed to go before the board,
answer its questions and address any concerns.
But if
you’re not absolutely certain where you stand, it’s well worth paying a
local attorney to draft a simple letter explaining your intentions and
why you qualify for the tax breaks or other incentives you seek, or to
appear with you to do most of the talking before the board.
Our Bottom Line
You
need to learn everything you can get your hands on potential tax breaks
for your chosen business site before you make that investment. Combine
a relationship with a knowledgeable broker, the results of your own
legwork in thoroughly questioning both appropriate officials and local
business owners, and online research, to make yourself an expert on the
subject. You can’t afford not to.
Kaitlyn Buss is a freelance writer for StartupNation.
