Dom Muscat on The Red Sofa
Interviewer: Hi Dom, are you able to give our viewers an insight into Bucks Biz?
Dom: Thank you for having me. Yes, Bucks Biz are a business centre owner and operator in the north and south of Milton Keynes.
What we do is, we will take a building, develop it into a business centre and create flexible office and industrial studio space that we would rent to a variety of customers. We currently have over 300 businesses that rent from us, ranging from a small beauty boutique to a large 60 person call centre and everything that you can imagine in between.
Interviewer: You used the term ‘business centres’ for growth potential. How do you back this up and what does this look like to a potential tenant with growth potential?
Dom: So with growth potential, that is the flexible license that we do. So basically, when you rent from us, we have short, rolling 90-day terms (longer terms if you want them). And what that means is that you can move into a small space, and as your business grows, you can then take a larger space because we build and develop the centres ourselves. We can do this sometimes without even moving you. So we can take a wall out, knock through it, mix and match. I make that sound much easier than it actually is, but we can do that.
The other thing, especially now with the brave new covid world; you could find yourself wanting to have a hot desk and expand that hot desk scenario, have separate offices where you could incubate teams and things like that. And we’re just catered for that.
Interviewer: You house many businesses – are there any common problems small businesses face and are you able to share any advice and guidance for these?
Dom: Well, I’m not saying it because you’re accountants, but accounts is the biggest problem. I mean, what we find renting to 300 businesses currently, we move about 100 businesses in and out per year across our three sites in north and south Milton Keynes and the issues are always the same. A business is a business, whether it’s a one-person sole trader or 10,000 person PLC. If you don’t have a good grasp of figures, you’re going to run into trouble eventually. And the issue you have in today’s market is with access to such easy finance. What I often see is somebody will move in, a medium-sized business which has been operating for a while, they win a big contract, and it’s the old adage, turnover is vanity, profit is sanity.
So they win a half million-pound contract, they then start expanding, leasing Range Rovers, employ more staff, and then somebody like yourselves comes in and gives them a bit of financial advice and says, hey, you’re turning over half a million, but your costs are half a million, and that’s where you have the issue. So it’s always keeping a grasp on finances is the issue we find with any business that rents from us.
Interviewer: I noticed on your website you offer licenses and not leases to your tenants. Are you able to enlighten us to the difference and the benefits that this can bring to new tenants?
Dom: Well, license and leases. So lease is a lot more stringent. It was viewed that leases were more long term, and it was always an aspiration for a business to take out a 25-year lease. In the modern world, that’s no good. Over 25-years, your business is moving so much in that time, growing, expanding, contracting, pivoting, whatever it’s doing. So what you find is if you take out a lease, they’ve come down in their terms. They’re no longer 25-years as the norm. They’re now five years or maybe a bit below. But you are still restricted. When you sign for that period of time with a lease, you’re stuck for that time.
So you sign on a ten-person office for five years on a lease. You then need to expand that space. But you can’t; you’re stuck there. Whereas with a license, there’s a lot more flexibility.
So the downside is people always viewed a license as being short term, and that it’s no good. But the short term actually gives you flexibility. Short term is a myth. I’ve got customers that have been with us for up to 20-years now, so you don’t have to worry about that.
The other biggest thing with a lease is what’s called self-repair and liability. So that means you are responsible for the building. When you rent from us at Bucks Biz, we’re responsible for all structural dilapidations. Like a private landlord, anything goes wrong in your building; air conditioning not working, windows falling out. That’s our problem, and we will cover the cost of repair for you. You have to pay for that yourself when you’re on a lease.
Depending on the terms, you might have to use the landlord’s approved contractors, which means you’re paying a little bit more than you should be paying. Or, more importantly, when you get to the end of your lease, the landlord then turns around and says, thank you for your business, but my roofs knackered; you owe me ten grand, twenty grand, thirty grand. These are normal figures for those repairs. You will be like, well, hold on, that roof was broken before I moved in. The leak was always there in the corner. If you didn’t do a full building survey before you moved in, if you didn’t get the full legal fees, which are all thousands of pounds before you move in, something you won’t get with a license and moving in with us, then they’re going to bite you further down the line.
I had a customer recently who came to us. He’s come off the back of a 25-year lease. He said that on the face of things, we’re double the cost to what he was paying on the lease. But when he factored in all of the business rates, service charges and everything he had to pay on top. Then all of the dilapidations you got hit for right at the end. We’re actually half the money.
Interviewer: With businesses embracing flexible working for their employees, how do you see this affecting the way businesses use their office space?
Dom: Flexibility is key. So obviously, giving maximum flexibility, and that’s what we’re built for; to enable businesses to grow and contract, that’s what we’re about.
Interviewer: Bucks Biz seems to have a real community spirit. What are the benefits to having multiple businesses in a single location?
Dom: The good thing is with 300 businesses; we have a closed Facebook group that we have for our community. We’ve tried many iterations of bulletin boards and network meetings. The Facebook group seems to work the best. And the way that works is when you rent from us, not just a business owner who’s going to be shouting, “this is what I do, buy from me, buy from me”, but also all of these staff and employees that use our buildings. We had one the other day a lady put up a post saying, “I’m looking for a plumber. I’ve got a leak at home. Can anyone help us?” And we rent to about six plumbers who have offices with us. So they all responded. It’s the Bucks Biz community, so we look after each other. And then, of course, you could be there saying, I need an accountant; people put their hands up, go down the corridor, and you can have a conversation. So it’s nice. And the community spirit we’ve got within our centres is good.
People have started to work together, saying hello down the corridors and things like that. It’s just a nice buzz to have around.
Interviewer: Is there anything new on the Horizon for Bucks Biz?
Dom: We’re always looking for properties. So if anyone knows of any buildings, do let us know because we want to develop more business centres. But at the moment, it’s recovering from COVID and seeing how businesses are now coping with what spec they need within their units. So it’s getting them back into the building and making sure that they’re still getting a safe environment that they’re happy with, but not restrictive that you’re not able to work.
Interviewer: Thanks for your time today, Dom. It’s been great getting an insight into Bucks Biz.
Dom: Thank you very much for having me.
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