Builder man, you are quick to judge. I have not failed, I'm doing well, I am moving to a larger premises in alexandria which we own. I am merely giving my opinion of the current market. Sure, you will always have businesses that will do better than others, but for a newcomer the climate is a bit risky. By all means give it a crack, but beware of the implications if you don't have sufficient funds to bank it up.
Small Warehouse
- Thread starter newbuilder2012
- Start date
What is a good business to start up and run in the current economic climate?
A tattoo studio in the Cross 
Job service agency for Centrelink. Lots of money making rorts to be had there.
How does centrelink pay if you have a job agency?
Hi newbuilder
>I just did a search on realcommercial.com.au for factories for lease under 400 sq meters in NSW, and it came up 2483 factories for lease
> Victoria came up 1183 factories for lease, less than half. ( this could be due to Sydneys high rentals )
> your rentals for new factories in Sydney are a lot higher than Melbourne. Sydney does about $105 per square meter per year while Melbourne does about $75 per square meter year ( $65 for older style brick factories ). These would be "outer suburb" rental prices.
> Our family owns 12 factories in Melbourne. From 100sqm to 300 sqm, and we always have them leased out. No trouble getting a tenant.
> What most tenants do if they start up a new business, they do a 1 year lease, with 2 year * 2 year options after that. The options are if the business goes well, then you can stay on. Renting a factory also includes paying for all " outgoings" ( council rates, insurance, water bills, body corporate etc ) Add this cost onto your rent !!!
> if the business goes badly ( or move to larger warehouse), then the tenant will have to pay ( about 1 months rent ) to re- lease the property.
> What ever business you do, you must know the cost of the product you are selling, and then know what every body else is selling it at. From there you can figure out your " mark ups " . This will allow you to find out how much Sales you need to "break even" . Google "break even formula", or ask your accountant.
> You will also get a rough idea on how many hours you have to work, to "achieve" those sales !!!! 70 hour working weeks are quite common for new business owners.
>I just did a search on realcommercial.com.au for factories for lease under 400 sq meters in NSW, and it came up 2483 factories for lease
> Victoria came up 1183 factories for lease, less than half. ( this could be due to Sydneys high rentals )
> your rentals for new factories in Sydney are a lot higher than Melbourne. Sydney does about $105 per square meter per year while Melbourne does about $75 per square meter year ( $65 for older style brick factories ). These would be "outer suburb" rental prices.
> Our family owns 12 factories in Melbourne. From 100sqm to 300 sqm, and we always have them leased out. No trouble getting a tenant.
> What most tenants do if they start up a new business, they do a 1 year lease, with 2 year * 2 year options after that. The options are if the business goes well, then you can stay on. Renting a factory also includes paying for all " outgoings" ( council rates, insurance, water bills, body corporate etc ) Add this cost onto your rent !!!
> if the business goes badly ( or move to larger warehouse), then the tenant will have to pay ( about 1 months rent ) to re- lease the property.
> What ever business you do, you must know the cost of the product you are selling, and then know what every body else is selling it at. From there you can figure out your " mark ups " . This will allow you to find out how much Sales you need to "break even" . Google "break even formula", or ask your accountant.
> You will also get a rough idea on how many hours you have to work, to "achieve" those sales !!!! 70 hour working weeks are quite common for new business owners.
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People often underestimate the amount of hours and work needed to run a successful business. Besides the business of the actual business itself, there is a lot of other admin stuff, staff management, bas statements, workcover, computer breakdowns, etc.
My husband did some work for a reasonably successful business in WA. They had tried quite a few business ventures over the years and ALWAYS rented their business premises in case things didn't go well. It also freed up cash for other ventures including property investment from which they also did very well. If it was me I would try and keep overheads as low as possible to start and then evaluate things after 12/24 months.
As a side note, if you do go ahead and buy a commercial property, I learnt the other night that owning it inside your SMSF can be quite beneficial
My two cents worth anyway. Good luck
As a side note, if you do go ahead and buy a commercial property, I learnt the other night that owning it inside your SMSF can be quite beneficial
My two cents worth anyway. Good luck
