Saturday I met with a client who is just starting a new business. I was going over the typical basics; record keeping, banking, financing, business plans.
But when we got to the location, we got into a more detailed discussion of what may well be the road for this person to become a multipreneur.
She needs a specialize facility and can rent one, but from a long term perspective it makes more sense to buy space spec out and then become the landlord to others as well as herself.
I have always been a strong believer, that owning makes more sense than renting. I know that there are those out there that believes that renting gives you the flexibility to grow or contract as needed for the times. But,working with my clients who rent, once they are in a location you are reluctant to want to move even if the space they occupy is inadequate. We typically fall into comfort patterns and the costs of moving and setting up things such as servers, computers and phone systems are complex and costly.
Where if you are going to stay put for a while, you might as well build up equity from yourself.
So this client may be in the market for a location to setup shop. I have informed her that this would be a second business, set up to further limit liability and protect current and future assets.
There is also the possibility of subleasing space and getting revenue from other tenants, so they are paying for your equity. This can be a great and wonderful thing if it works out as planned. Even if things don’t go as planned, the risk is minimal if planned out in advance.
The more income steams you develop I feel the better your chances of financial independence.