When you’re just starting out in business, everything is a rush, and in more ways than one. Something you definitely should never rush, however, is the decision about how you’re going to establish your place of business. It’s a factor requiring serious consideration, as how you make your start can have a lot of bearing on what happens next.
The following tips are intended to provide you with information you need for making a decision about renting your first serviced office space. This advice could help you avoid costly mistakes and improve your chance of success.
Ensure Your Budget
Starting a business requires capital, and you shouldn’t start a business unless you know you have sufficient capital on hand to cover your costs. The question you need to ask is “Could my business survive the first quarter with no income?” If the answer is negative, then you should consider that a clear sign that you are under-funded. You need enough money for the business to last at least three months with no income without folding.
For your office rental, aim to allocate an amount you can affordably sustain without worrying about not having the funds to pay for it. Out of the obligations you take on in this crucial first year, office rent is the most binding. Knowing in advance you can afford it is a good way to make the whole process less stressful.
Decide Whether You Want a Long-Term or Short-Term Contract
Long term contracts are sometimes cheaper than short term contracts, but they’re best suited to those who are either extremely confident about their future success or who already have sufficient funds to see it through.
Short-term contracts will usually be the best choice for most start-ups, even if the initial outlay is higher. Make sure an option to renew the contract is available in the lease conditions, and look for clauses that discuss early termination.
Know Which Type of Office You Need
There are many more options available to small business owners now than there were in the past. You can choose from:
- Traditional sole occupancy lease – the most prestigious but also the most costly, because everything has to be financed by you.
- Private office in shared building – this is also a high end option, but certain expenses such as cleaning and reception are covered by shared funding
- Shared office – also known as a co-working space, the shared office has all the infrastructure you need in a modern office, but in a shared environment. This is a less expensive option because many extras are provided as part of the lease.
- Virtual office – the least expensive option, and perfect if you don’t need to regularly receive visitors. In this case you don’t have a permanent physical office, you just get the business address for correspondence, and you may also get phone answering services. When you need physical space for meeting clients, it’s usually hired on an hourly basis.
The choice you make should be determined by the type of business you have. A lawyer, for example, would not normally be well served by having a virtual office, while a graphic designer would probably struggle on a sole occupancy lease.
Decide What Size Office You Need
This choice also comes down to business type. If your business needs special equipment, then you’ll probably need additional space to store and operate it. If your business needs to display anything, you’ll need space to display it.
Decide Whether You Want to Go Through an Estate Agent
In most cases an estate agent can help you find better deals more quickly. You won’t always need one, especially if a virtual office is more your style, but estate agents can save you some time and sometimes save you money as well. The main advantage you can get from a good estate agent is they’ll try to avoid working for low quality landlords, because they know their reputation is on the line every time they negotiate a deal
Renting your first office is a big deal, but it should not be a struggle. If you prepare yourself properly and make sure you can afford whatever you select, you are giving your business the best chance of surviving through its first year. Because most small businesses never make it that far, if you can manage that, it means your business has been built on a good foundation to achieve long-term success.