Leasing Office Space
If you’re thinking about moving to a new office space, there are a few things to consider before making the move. First you need to figure out just how much space you’ll need! Hopefully you’re moving because your company is growing, in which case about 175-225 square feet per employee is a good figure to go on.
Your next decision should focus on whether to buy or rent new office space. It’s a big step for your business and not to be made foolishly, so make sure you do your research first. There are some pros and cons to both sides of the story.
Buying your own office space certainly has its freedoms - once you own it, you’re allowed to do with it what you will. You don’t have to worry about a landlord or stipulations of a contract. Your costs tend to be fixed, as you can lock in a long term mortgage. The costs of owning and running your own commercial space also provides good tax deductions in the form of property taxes and mortgage interest.
Of course, there is another side to the coin as well - you are responsible for all the costs and services needed to run an office space, including, but not limited to electricity, water, sewage, trash, internet service, phone services, maintenance services and more. The upfront costs can also be huge because of the down payment, any property upgrades that must be done, and other maintenance. Plus, once you sign the contract, you own the building lock and key - meaning if your company experiences a large growth spurt (or, unfortunately, a downsize) you may find yourself with not enough OR too much space on your hands.
Renting office space tends to afford a little more flexibility. You sign a year lease, but at least you can usually negotiate more space, or less, if you need it. For frugal business owners, the upfront costs are less. You’re simply renting the area, and most services and utilities are rolled right into the price so it is a good way to keep initial costs low.
When you lease an office, you essentially get to hand over the headaches of caring for a property to a landlord. In addition to saving on upfront costs, it can save you time and stress, allowing you to focus more on your work. Also, by leasing rather than buying you can often afford a building in a more upscale and desirable location that may normally be too expensive for you.
Since location can really help or harm a business, it’s definitely an important consideration. A beautiful building in a high-traffic area can easily drive new customers your way. A run down building in the middle of nowhere probably won’t do much for you. The only problem is price - when you’re leasing, the fancier the office, the higher the price and your rent can often go up. So always make sure you read all parts of your contract closely.
Luckily, a commercial lease isn’t written in stone and can be negotiated before the actual signing. Whether to lease or buy your office space is a serious decision, and can have a big effect on your business. The most important thing is do your research and put time into considering the best options for your company.
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