Most modern entrepreneurs build their business from their bedroom. Or a basement office, or perhaps the spare room. In other words, we start from scratch, and do what we can to make things work. Eventually, however, the spare bedroom just won’t cut it! After all, you can’t exactly invite investors and clients to your bedroom for a meeting. You need a professional, sophisticated space to grow and expand. It’s one of the first things we think about when our company starts to make a little money. So, are you ready to take the big leap to a full commercial office?
It’s a big step. The biggest you’ll take in your early startup life. It could make or break the business, since your overheads will quickly soar. It’s all about making sure those foundations are strong enough to support your big move. Scaling up is an essential part of business, but timing is the critical factor. Too soon, and your whole company will come crashing down around you. Too late, and you’ll never get off the ground. Today, we’ll talk you through the process of renting your first office space, and find out if you’re ready.
Honestly assess your business
It’s time to get brutally honest and frank with yourself about the strength of your company. Can it handle the huge additional weight of overheads costs and supplies? Quite simply, are you ready to make this big step? At a certain point, it’s all a leap of faith. However, there are certain criteria that can help you decide. For example, do you have a ton of orders already lined up? Do you have work booked in for the next six months? That’s certainly a good sign.
Is there enough demand for your business?
It all comes down to whether there is enough demand to support your company over the next few years. I always tell businesses they should be at ‘breaking point’ before they move up to a bigger office. Are you at the point where you simply can’t handle the amount of orders flooding in? Do you have so many queries coming in that you need more team members to deal with them? This is also the perfect time to do a little more market research. You may feel the stress of demand, but are you at saturation of the market? Make sure there are thousands more customers out there demanding your product or service.
Would a virtual office make more sense?
At this point, it’s also worth assessing the alternative options. For example, you could hire a virtual office, which would give your company an official business address and telephone number. You can usually hire a PA as part of the deal, which might take some of the work off your plate. You can then hire a conference room when you need to entertain clients or investors. Meanwhile, you can hire additional staff and manage them via telecommunications. It’s a simple alternative to the huge cost of renting an office. Try it as a stepping stone, and see how you get on.
Consider hiring an experienced team member first
I always advise business owners to hire before they expand. Unfortunately most entrepreneurs move into a huge office space and say, “What next?” Instead, bring a seasoned pro on board to help create your scale-up plans. Choose someone who has been through the process before, and can point out the pitfalls. It’s like having a guide alongside you every step of the way. They can also help manage the workload during this tricky transition period, and smoothen out the process as you settle in.
Speak to commercial office agents
A lot of entrepreneurs embark on this process alone, thinking they have the skills necessary. Well, in some cases you might, but it always pay to have the sound advice of the experts. Remember, renting an office space is nothing like renting a house or apartment. There are all sorts of different factors to consider. A commercial office agent is the perfect person to help you along the way. Make appointments with a number of agents around town, and find someone best suited to you, and your company.
Choosing your office size
One of the most important decisions you’ll make is the size of the office. It’s a tricky balance to get right, because your business is still growing. You’re tied by a strict budget, but you don’t want to squeeze yourself in the long-run. In other words, you’re looking for somewhere relatively small to keep your costs down. However, you also need room to expand over the next twenty-four months. I tend to advise entrepreneurs to look for somewhere that has an extra ⅓ space to expand. Trust me, once you move into an office space, business and productivity kicks into overdrive. You’ll be boosting your company by a third in eighteen months.
The lease agreement
With this in mind, you should never tie yourself down to an office for too long. Don’t think too long term. Remember, this is still your first office space, and there’s room to grow. If all goes well, you’ll be looking to expand again in a couple of years. Try to keep the lease agreement to a short-term range. Clarify the exact terms and negotiate on rent increases, renewal options etc. The lease agreement is generally drafted in favour of the landlord, so don’t sign anything blindly. Make sure you get what you want!
Naturally, the location is incredibly important. You’ll notice how most similar businesses tend to congregate in the same part of time. There’s a good reason for this. Your customers and clients all have easy access to them. Distancing yourself from your rivals could make life very difficult. You should also consider the ease of access for your employees. Statistics show that a long commute severely impacts their productivity and loyalty to the company. Try to position your office on the major transport links, and give them easy access.
Of course, it almost always comes down to your budget. Never over-extend yourself on your office space. No matter how bright things are looking for the business, don’t rush into anything. Stick within your limits to begin with. Remember, we can think about scaling up again in just a few years. Use your existing projections to make a judgement call, and set a strict budget limit. This ceiling also gives you a negotiating chip with landlords, who may be sympathetic to your budget limit.
Overheads and supplies
The cost of the rent is just the start of your budget considerations. Remember to build in the additional overheads and supply costs that come from a new office premises. Account for the cost of utility bills, insurance, and maintenance costs. Don’t forget to include the new supplies you’ll need to fill the building. We’re talking about everything from computers to furniture to laminator supplies and paper. See Film Source for more information on the cost of office supplies. Work these details into your budget well in advance. Don’t get caught out later.
Assess the existing infrastructure
The ideal office will come fully fitted with modern infrastructure such as internet and phone lines. It should also come with working bathrooms and a functioning kitchen. Remember, your office is a place to show off to clients and investors. So make sure the existing decoration suits your company, and conveys professionalism. If you’re on the first-time buyer’s market, you’ll find some sketchy properties in your price range. It pays to do your due diligence here.
Consider the layout
It might seem like an insignificant point, but the layout of your office affects the entire functionality. The layout is key to productivity, as some people work in very different ways. For example, an open plan office space has become very common in the Silicon Valley environment. Startups love the collaborative and creative nature of an open-plan office. However, that won’t always suit traditional industries. It costs a great deal more to buy the wrong office and adapt it, than paying out for the best layout in the first place. Make your decision early, and hunt out the right layout for you.
See a variety of options
Quite often, you don’t know exactly what you want until you see it. Similarly, you might have the perfect office idea in your head, but then realise it’s completely unworkable. That’s why it’s so important to visit as many prospective office spaces as possible. Make appointments to see at least five in your chosen location. Make a list of pros and cons, and give yourself the tools to make an informed decision. You never know what will catch your eye until you see it. Lastly, it’s a chance to grill the landlord and agents about the finer details. Use this time well!
My final piece of advice is this: don’t rush into anything! You might feel buried with work, and a new office might seem like the only option. Be very wary of this mindset. Take your time, slow down, and wait until the right office space shows up on the market. It will become the heart and soul of your startup, so pick carefully.