Whether you're thinking of making the move from a home office to leased office space or you are establishing your business in a commercial environment, renting office space is a big decision – and one that requires careful thought and forward planning.
The good news is finding your first office space is usually a sign that your start-up is beginning to expand and flourish, and means that you're ready to take the plunge and find a more productive environment from which to run your business. But there are both monetary and strategic issues to take into account, and these 10 golden rules will raise important issues for you to consider before leasing your first office space:
Leasing office space means committing to a commercial office lease - and this is a legally binding agreement that will tie you in to a contract for a given period. You must ask yourself whether the move to leased office space will enhance your business and the services you offer, and that it will enable you to be a more profitable and productive business. An office lease is a big responsibility to take on and as a small business you need to make sure you are clear about the commitment and at the right stage to move on to a “real” office.
It goes without saying that a new office will tie you to regular monthly costs that you may not have had to consider until now. These will include rent, service charges, business rates, maintenance costs, insurance and the day-to-day running costs. Make sure you are fully aware of all the costs from the outset and that you don't overstretch yourself financially.
Finding the right office and then negotiating the right terms for your business is a time-consuming and complex process, so you should never attempt to take this on yourself. Use a commercial property agent in your area who knows the market inside out and can “hold your hand” throughout the process to ensure a profitable outcome for your business.
Every office lease is different, yet they are usually drafted in favour of the landlord. Decide what office lease terms are best for you as a tenant; consider issues such as lease length, rental increases, options to renew, break clauses, etc. Clarifying these issues at an early stage will save lots of upheaval at the negotiation stage.
Do your homework on your shortlist of properties; tour the building several times; investigate who the landlord is and other properties they own, traffic patterns, who the previous tenant was (and why they left) and who the neighbouring tenants are.
Evaluate whether the geographical location, space and type of building is a good fit for your business. Your choice of office space says a lot about you as a business and you want to make sure it gives the right first impression. Use our office space checklist as a guide to evaluate each office building.
Make sure that any space you’re considering is big enough for both your current needs and your foreseeable growth. Be realistic and don’t under- or over-estimate your true needs.
Hire a property solicitor who not only specialises in lease negotiations, but who also has dealt with start-ups before. A lease negotiation can cover hundreds of terms, often with confusing jargon, and you want someone who will represent your best interests and clarifies anything you don't understand.
Moving into leased office space provides you with a great opportunity to find the right office suppliers and install the right business communications systems that will enable you to operate efficiently and provide the best service to clients.
Don't be rushed into making a decision if you're not fully comfortable. And if the lease negotiations don't quite come out as you planned – be prepared to walk away. There are always other properties that may better suit your needs.