Office space can be a challenge for businesses to get right, especially businesses that are poised for growth. How do you create the right environment to maximize productivity, while not creating an administrative headache, stumbling into hidden expenses or locking your business into inflexible lease terms?
With the rapidly evolving office landscape, there are a variety of options and price points to choose from. As the director of Emerge212, an operator of full-service office suites, here's my advice for businesses aiming to transform their office space into a valuable asset that serves their growing needs.
1. Recognize that all office spaces aren't created equal.
In the same way that technology has disrupted the business landscape, new models of office spaces are taking over the commercial real estate market. Before you start your search, it's important to consider how your company operates, and which type of office leasing contains the right value proposition for you. Here's a breakdown of the office models available:
A traditional office model features a direct lease that typically involves a commitment of a relatively lengthy period of time (e.g. 5-10 years) with less flexibility in terms of growing into/out of the space. There are also traditional subleases that can offer more flexibility, but involve some obligations to both the tenant you sublease from, as well as the property landlord.
The new model of shared offices includes co-working and fully serviced office suites.
- Co-Working Spaces: Co-working spaces can range from minimalistic, membership-type models, all the way to environments with some amenities. Typically, tenants from different companies work alongside each other in open floor plans. There are varied services offered within different co-working spaces, and some companies find sharing a space with other like-minded companies can foster innovation.
- Fully Serviced Office Suites: This is an alternative shared office model where clients have individual and private offices, but also benefit from shared common spaces and conference rooms. Emerge212 operates this model and features a fully patched IT infrastructure, common spaces (e.g. boardrooms, cafes, breakout areas) and administrative support services. Generally, fully serviced office suites are suited for more established companies and entrepreneurs looking to focus their operations on their business rather than the operations of managing an office.
2. Set your budget and remember hidden costs.
The true cost of a new office space is comprised of numerous factors beyond rent. The following costs and questions are important to consider as part of your monthly budget for rent.
- Utilities, phones and internet: Will A/C, heat, electricity, water and telecommunications be incremental costs?
- Construction costs: Will any build-out or renovation of the space be required to function well for your business, and will you or the landlord be responsible for those costs?
- Office furniture: What furniture will be required to make your office space function for your team, as well as project the type of image and culture you desire for employees, clients and other guests?
- Moving expenses: Will there be expenses associated with moving existing furniture, infrastructure and files from your old location to your new location?
- IT setup and support: Who is responsible for footing the bill of a well-functioning IT system? Read more below about how to ensure the technology setup of your office will appropriately support your business, and consider associated costs.
- Real estate taxes: Will you be responsible for any or all real estate tax costs?
- Janitorial and maintenance: Does the building provide this as part of your monthly rent, or will you need to coordinate and pay for basic cleaning services?
3. Check the technology setup.
Today, technology is the backbone of almost every aspect of our lives, including the spaces we work out of. As you evaluate office options, you must demand a seamless, easy-to-use, secure and advanced IT system. Understand and test the current technological infrastructure of each space you consider. Can it accommodate your business needs immediately? Would expensive build-out be required? While your business's needs can vary, offerings such as firewalls, servers, access to the cloud, on-site storage and co-location capabilities are all things to consider when evaluating the technological support of a space. It's important to determine the speed and security, and whether you'll need your own dedicated network or server.
4. Consider growth.
Smart business means investing only in space you need now, but in most instances a business's growth trajectory is uncertain. If you believe your company may require more or less space in the future, here are a few questions to ask when looking for office space:
- What is our growth plan? While growth is often uncertain, consider what the future may hold for your business. Ideally you will find a space that can accommodate your business now and in the future, no matter if you require more or less space.
- What are the upfront costs for renting space? An office's monthly rent may look fine on paper. However, if setting up the space will require high upfront costs (e.g. construction build-out), it likely won't be the right fit for your changing business. From a financial perspective, it does not make sense to invest fixed costs upfront in a space that you may grow out of after one year.
- What is the landlord's policy for removing walls, downsizing, and moving in or out? Time is of the essence when growing your business. Things may escalate faster or less quickly than originally anticipated, requiring your business to adjust accordingly. Before signing a lease, understand if there is flexibility in removing walls to accommodate expansion, moving to a smaller space to accommodate downsizing and if there is flexibility about when you can move in or out.
- Do we really need our own space? Many companies begin the hunt looking for their own office space, when they really just need a dedicated, private workspace. In this instance, co-working and shared offices may prove to be the right fit, offering turnkey spaces for a fraction of the cost, as well as flexibility in terms of space requirements, technology needs and more.
5. Take your time to find what's right.
Identifying the right office environment may not be something that can be done overnight. Each office environment has different benefits and drawbacks. When you're shopping for a space, consider asking about the culture and seeing if there's an opportunity for you to work out of the office or building for the day before committing to a lease. Be cognizant of the habits and environments that garner output and efficiency for your company and consider those when reviewing the offerings and amenities an office space provides. Finding the right office for your business isn't an overnight decision, and there may be compromises involved. Selecting the right office space is one of the most important decisions a business can make. By making an informed decision, you can help position your business for future growth.