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To keep costs low, our 2 person business started off with a virtual office arrangement, i.e. work at home, communicate via Skype, etc. Just wondering, what are the deciding factors that requires a company to start renting a physical location for use as an office space? |
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The only requirement I would say, is having the ability for you to be able to get your work done in an efficient manner. Right now by working from home, you have plenty of benefits: lower operational costs, tax deductions, as well as the ability to control your working hours more easily. You can simply use a UPS store for mail, and that costs 25 dollars per month, but you can actually write out your address using a Suite 2xx, instead of box 2xx. I'd say, before getting a space of your own, look at the requirements of your needs. Maybe you just might need a conference room, which you can signing up with an executive suites service. It's a virtual office, which get's you your own phone number, an operator to answer your calls, allotted times that you can schedule conferences in a conference room, fax, etc. Google executive suites, or virtual office. They run anywhere from 100-200 bucks a month. Alternatively, you might get to the point where you do need some type of space, you can also find places that rent out cubicles. They typically run from 350 to 500 a month, and usually come with phones, the fridge, security, just like if you worked at the company who is hosting it. Renting an office runs about 400 - 1200, depending on the location and the size of the office, but usually only come with phone jacks and paid utilities. Finally, you can get true office space for about .50-$25 sq ft depending on the location and the building. Smaller office parks are the cheapest spaces, which run on the lower end of price per sq foot. Getting into a larger office building is definitely more expensive and most have longer term leases. This typically does not include utilities and you have to do your own build-out, which most lease owners will do the build-out but you roll it onto the lease with a longer term lease. So when you're ready to get into a building, make sure you do your research and ask about security, storage, insurance, utilities, common areas, and parking. These are the rates in the DFW Texas area, so they might completely vary where you are. |
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The primary question I asked myself before we moved in to an office was "will the renting or purchasing of office space increase our revenue to the extent that the office pays for itself?". I held off moving out of the garden shed myself and my developer were occupying until I knew the answer to this question was a profound "yes". The only other factor you may consider as a driving force behind getting office space is the need to take on more employees. With technology available such as VoIP/Skype, e-mail, GoToMeeting etc. you should be able to work from home and still engage with clients. If a face to face meeting is essential request that you go to the client rather than they come to you. If you have read all of the above and decide that you still wish to pursue commerical space make sure you negotiate heavily with your potential landlord, especially if you're taking on a lease. With the current economic climate you should be able to request break clauses that get you out of long term leases at predefined points, a reduction in your rent for the first year, caps on service charges, redecoration of the office free of charge. The list is as long as your imagination and haggling skills will allow. Good luck! |
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