Wednesday, October 20, 2010


To own or not to own? That is the question. If you run a business, should you buy your own facility? When small business clients ask me that question, I generally advise them to rent, not purchase, their facilities. My rationale is two-fold:

• First, if your business is making widgets and you do it successfully, then keep your eye on the ball and focus on doing what you know best so that you can make your business grow. Real estate is often fraught with unanticipated consequences that divert your energies, emotions and capital; every dollar sunk into real estate will reduce your monthly income and produce additional fees/taxes and expenses. My belief is that you should invest your capital in your business, not what, in essence, is a speculative investment.

• Second, if you believe in yourself as a widget-maker, you most likely expect to expand your widget-making business over time. But along with growth comes the likelihood that you will outgrow your space. Then what? If you need to relocate, you may find yourself having to sell into an unfriendly economic real estate market, which may well scotch your growth opportunities.

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