Article Link: http://exchangepress.com/article/to-own-or-to-lease/5021484/
The question of whether to lease or own a facility to operate your business �" and the decision’s impact on the business operations and future value of the business �" remains the single most confusing topic among educational business owners. Rarely is this question asked when a school is in the initial planning phase, as most start-up business owners lease their facilities as a means to preserve capital. The question is much more common as a company grows, builds some capital for growth, and wants to make smart decisions regarding preservation of capital for business growth and long-term value of the business and real estate. In our opinion, there is no correct answer. Everyone should consider his or her capital needs and future business strategy.Case Study: Martha is new to the education industry and wants to open an after-school center. She is seeking a lease for a small facility to get started conservatively and wants flexible terms that will allow her to move to another site if she has more demand for enrollment than the initial site will allow. She has personal savings for the purchase of the start-up equipment and supplies and for initial operating costs, but does not have ...