Choosing office space can be very challenging because your decision will have so many repercussions for your business. The wrong location, for example, could cost you employees or clients. What’s more, you have to base your choice on your company’s future needs, not just your current situation.
Given that landlords prefer lease terms of three to five years, entrepreneurs should consider these questions carefully before signing on the dotted line:
Is there room for my company to grow?
Any company must consider not only its immediate needs, but also growth and other factors that could change space requirements over the course of the lease. If you can’t afford to take extra space to give you room to grow, try to negotiate a shorter lease term or add language to the lease that gives you the first right of negotiation on any adjacent space that becomes vacant.
Is it the right location for my key employees?
Consider where your key employees live and whether the space is convenient for them. A long, expensive commute may push them to seek employment elsewhere. “When considering a move, you might want to let your key staff weigh in so you don’t risk losing them,” says Peter Riguardi, president of New York operations for Jones Lang LaSalle, a commercial real estate firm.
Is the location convenient for clients?
You also want your office to be accessible to clients, as transportation costs continue to rise and people may not be as willing to travel. If you leave an urban location for a cheaper space in the suburbs, consider whether the lower expenses will make up for the possible loss of clients. Even in the age of video conferencing and Skype, it’s important that face-to-face meetings be manageable.
Are there hidden costs I’m not considering?
Calculate the full cost of the space – rent, utilities, construction costs, moving expenses, and other costs that may not be obvious. Because there can be hidden expenses, consider hiring a professional broker to help you understand your total outlay. You have to look at the costs associated with the move, even restoration of the space you’re moving from.
What is the parking situation?
It’s important to consider the amount of parking available at your proposed location, as well as the potential cost to employees and customers. If parking is tight, is there a place where employees can park so customers get the most convenient spaces? Negotiating special employee rates and validating customers’ parking tickets are good ideas, but they need to be worked into your budget. If it is difficult and costly for your employees or customers to park, they might not be your employees or customers for as long as you would like.
Would I consider sharing an office?
Sharing space with another company saves money not only on the office rent, but also on the cost of common areas like kitchens and bathrooms. For referral purposes, it’s ideal to share with complementary businesses, such as an architect with a builder or a PR firm with a Web designer. There should be a formal agreement between tenants, even if it’s month to month. Also, if it is a good fit for you, you want to make sure the lease on the space you’re sharing isn’t going to expire anytime soon.
Info via Entrepreneur, 2013
