Estimate our space requirements
It is essential to provide your workspace provider with specific space requirements. You can start calculating with estimations ranging from 100 to 250 square feet per person (9 sqm to 23 sqm). Estimating your space requirements can prevent you from compromising with too small an office to save money since any lack of breathing room space between workers and equipment will negatively affect productivity.
Assess office facilities
Availability of utilities and services is likely to differ amongst types of commercial buildings. However, you should run through research on health and safety regulations so that you can determine whether ventilation, temperature controls, lighting, toilets and kitchen facilities provided by the space are adequate or not. This kind of assessment can take place during your office tour visit.
Many small businesses often opt for shared, serviced offices which provide a range of services and facilities within the lease agreement. Those shared facilities may consist of office furniture, wifi, kitchens, lounge and storage areas. Besides, you may also gain access to supporting services such as security, concierges and receptionists.
(RELATED: How can you find your ideal office space?)
Know you are sharing the space with
If you don’t need too much space, sharing an office with another business could be an option to save money. You might also want to know the other tenants in the building, whether you are next door to compatible companies that are similar to your trade or one of your closest competitors. Especially do they speak loud on the phone! Give some thought about the possibility that your neighbours might generate noise that disturbs your team or your clientele. Also, consider how common office resources, such as meeting rooms could be overwhelmed without causing disputes or conflicts among staff communities.
Understand your lease type
Consider these carefully, as your lease is likely to fall into one of 4 most common types below.
This is common in multi-tenant office buildings. In this agreement, the building owner charges a single monthly lump sum that covers the space for rent and other expenses such as property taxes, insurance, common area maintenance, utilities, cleaning, and other services. However, sometimes gross leases may not include utilities.
A majority of industrial and flex buildings use triple net leases, in which a base rent is calculated plus an additional amount covering their share of property taxes, insurance, and expenses for common area maintenance. In this case, your company will have to contract out and pay your office maintenance duties.
This is a crossover of a triple net lease and a gross rent. A lease of this type includes operating expenses, except for utilities.
Tenants are charged a base rent and a percentage of their gross revenue generated in that location. However, startups are often not recommended to engage in this kind of lease.
(READ: 8 Benefits of Leasing a Serviced Office)
Consider the location
A location is ideal when it is close to transit, airports, and other competitors in your industry. Locating your headquarters in the right spot will give you access to the pool of top talents and make it easier to network with potential partners. The better the location is, the more expensive it will be. Therefore, you should start budgeting and decide the extent to which you can compromise.
Be aware of upfront costs
Traditional office leases often cover the cost of utilities, whereas this isn’t always the case for conventional office leasing. Your monthly rental price may appear appealing on paper, but be careful as it might not be so affordable in configuration with other expenses. Therefore, make sure you know all costs in your monthly rental price.
Budget for hidden cost
As aforementioned, the topline figure on a lease does not reflect the total cost you have to pay when renting office space. Carefully check your lease and discuss financial responsibilities for repairs, maintenance, and upgrades with your landlord.
Furthermore, don’t forget to budget for additional fees and costs, which might include moving costs, insurance and taxes. Comprehensive tenant insurance is a means to protect yourself from any unexpected contingencies, for example, the office landlord goes bankrupt.
Plan for the long run
Obvious as it may seem, it’s worth mentioning that your objectives must be crystal clear, ultra-specific and, of course, income-generating. Though moving into an office marks a new milestone in a company’s growth, over-valuing can happen, especially to startups. Therefore, you may need to thoroughly contemplate your company’s finance and potentials before making a substantial expansion on operating cost.
Consider your options
Many startups begin the office space hunt with assumptions of their urgent call for a space of their own. A dedicated workspace is what they need. Nowadays, coworking spaces appear as a less-frills alternative to traditional office spaces, offering emerging businesses with a fraction of the cost, flexibility in new space accommodation without any long-term contracts.