Moving out of the home office into a real rental space can be an exciting sign of growth and success for small businesses. Trends in the commercial real estate market will come and go, but regardless of the market getting a good deal requires being a sharp scout. Check out these tips for seeking out the best possible space for your small business, as suggested in the article “The Do’s and Don’ts of Renting Office Space”:
#1 Consider Your Size
While your time in a cramped home office might have made you dream of large spaces, be prudent when estimating how much space you will actually need. Some experts recommend around 200 SF per employee, but you might be able to manage with less depending on what your budget allows.
There are a few other options besides renting your own space if you have only a few employees. One option is sharing an office suite that already includes furniture and equipment. The fees might be high for a space like this; it typically includes services like internet, phone, copying, and fax, but this might mean that your business can devote its money and energy to other things as you navigate the startup phase. Another option would be to sublet space from another business, which would mean splitting some of the building costs, and you might even be able to use some furniture and other equipment.
#2 Stay Flexible on Lease Length
As a general rule, small businesses should steer clear of long term leases, as they could wreak havoc on your finances if your business does not grow as predicted. Oh the other hand, if your business grows too much, you will be stuck in a cramped space if you committed to a long term lease. A short term lease is most ideal for small businesses, and the best case scenario would be renting with a landlord who can offer properties of different sizes and might even allow your business to move to another floor or nearby space after a few years of growth.
#3 Don’t Ignore the Details
It is important to not only fully read but to fully understand all of your lease terms. You will want to double check to make sure that nothing you are doing is violating those terms, whether it is a window sign, to hours of operation, to equipment usage. It might not be a bad idea to ask an attorney to look over your paperwork, such as the work letter and the lease itself, just to make sure you did not miss anything that will come back to hurt your business.
#4 Consider Clustering
While it might seem counterintuitive at first glance, choosing a location near businesses similar to yours—called clustering—might actually have its advantages. Especially with startup businesses, collaboration can be crucial, and even competition for customers can foster growth for both businesses, such as when gas stations set up on opposite corners. Sometimes research oriented companies decide to work near each other so they can share equipment, discuss best practices, and even collaborate on new ideas. Retail businesses group together so as to be a “one-stop shop” for customers.
The downsides of clustering include the threat of competitors stealing information or employees, so it is important to think about the kind of business you have and how you attract customers and employees before deciding to cluster.
Finding that first office space outside the home can be a make-or-break move for small businesses, so make sure that you research carefully and find out what different options are available to you!