Finding the ideal office space is among the most important steps when setting up a business. The office gives your clients the first impression of your brand or business. In addition, you do not want to move your business after a few months of operation.
Consider your goals and objectives before starting your search. The location of your business should help you achieve the goals and objectives. Here are other important considerations to help identify the right office space.
1. What is your budget?
One of the most important sections in your business plan is the cost estimation section. The costs should include rent and other office expenses. The estimates should guide you when looking for the ideal office space. If your business is already running, you can easily estimate the amount to spend on rent based on your monthly profits. If you are just starting the business, your best move is to keep the rent expense as low as possible. The amount in this case will depend on the capital available and your business goals.
Account for other costs such as parking, renovations, insurance, office supplies, and furniture when drawing your budget. Consider the cost of relocation when your business outgrows the space. Follow your budget strictly when searching for the office space.
2. What are your options?
The main options for acquiring office space include leasing and buying. You can sublease the space for a number of years or deal directly with the property owner. Another option is to rent shared space instead of occupying the full space. The ideal option will depend on the nature of your business and budget.
As you evaluate the solutions, consider the financial obligations that come with each option. For instance, subleases are more flexible in terms of the number of years you can lease the space. Shared space may prove to be markedly more cost effective, but you have to consider if this would suit the nature of your business. Property owners can be strict with direct leases and may require a longer period of commitment.
3. Which is the ideal location for your business?
The location of business determines the number of customers that you reach with your services or products. The location also determines the level of competition, cost of rent, and access to services and facilities. Put these factors into consideration when choosing the location of your business.
Other considerations include accessibility by your key staff members, parking options, and security. Defining the ideal location narrows your search to a few towns or cities in your state where you can open your first office.
4. How much space does your business require?
One mistake that many business owners make especially for their first startups is leasing more space that their business requires. You may end up paying more rent than you should if you do not estimate the required space accurately. Consider the number of employees that you have or intend to hire within the lease term. Allocate 100-150 square feet to each employee. Remember that the layout of the space influences the efficiency of the space. Choose rectangular spaces over corner spaces because you give your employees more room.
Another important consideration is the possibility of expanding the space. Your lease contract should include well-defined expansion rights. Your business can grow faster than you project within the lease term. Negotiate for fair termination terms where it is impossible to expand to adjacent spaces.
5. What financial guarantee will be required?
Your budget for the office space may be based on your projected sales or the available capital. However, the property owner will require some form of guarantee that you can meet the cost of rent. Most property owners prefer to rent their spaces to established businesses with stable income. If you are starting a new business, you need to proof that you can pay the rent from personal finances in case the business makes no profits.
The property owner may ask for bank statements or referees as proof of your financial stability. Others ask you to pay the rent for several months up front before occupying the space. Ask about these requirements and make a decision based on your ability to provide the financial guarantee.
Takeaway
If you are starting a new business, the first consideration is the possibility of working from home. You can save the rent cost for the first few months as you grow your business. However, the option does not work for all businesses. The considerations outlined above will help you identify the ideal space for your business when you cannot work from a home office.
While you can find the ideal space within a month or less, it is advisable to start your search earlier to explore all options in your preferred location.