When you operate a small business, the location of your business is likely to be your biggest expense, but you don't have to pay that cost by yourself. Depending on your business, it may make sense to share your space to cut costs. There are a variety of ways to do so, from simply splitting a space down the middle with another business to opening up a co-working space in a part of your office you're not using. But the starting point for sharing space is similar for all small businesses.
Figure Out What Space You Need
You have to ask yourself what sort of space you need and how it differs from the space you're currently using. If you're working in a home office or a space that your business has simply out-grown, you may be looking for something bigger. If you've got a sizable space with more room than you actually need, your space may simply need to be a bit smaller. If you have good projections on where your business is going in the next few years, take those into account. If you expect to grow and need more space, an office that is too big for you today may be just perfect in five years. Of course, you'll have a clear idea of the type of space you need (office, retail, warehouse, and so on), but keep in mind what you may need if you expand.
If you're already in a space that is too big for you, sharing may just be a matter of partitioning off the space that you don't actually need and finding another business that is willing to pay you for it. You'll also want to think in terms of amenities, too. If there's a standard amenity (such as a telephone line) that you don't need but that most of the businesses you would share a space with require, take that into account, along with those features that you require in your office space.
Keep the Matter Legal
If you own the space your business uses, renting out a portion of it isn't likely to be a problem. However, if you're renting, you will need to make sure that your landlord is comfortable with you subletting a portion of the space. Depending on the landlord or property management company you're dealing with, you may need to have your sharing agreement approved. Essentially, you are asking to sublet part of the space you're renting, and not all landlords are fond of that idea.
It's also generally a good idea to put a contract in place with the business or individual you'll be sharing space with. Assuming that you take a traditional approach (like subletting) to the process, you'll still ultimately be responsible for paying rent or a mortgage, making it a necessary step to protect your own business. The contract may be little more than a standard rental agreement, but it will make sharing a space that much easier.
Be sure that you're as comfortable with the organization you're sharing space with as possible -- after all, members of that company's staff will likely have access to your equipment and files unless you partition your office in such a way that they aren't able to leave their section. Many sharing arrangements will put you in the position of a landlord as well, making it important that whoever you're sharing space with will be around in a month to pay his rent. It's worthwhile to talk to your network to make sure that the organization you're working with has a good reputation. In fact, it's probably best to avoid sharing space with a business that no one in your network can vouch for.
Go Beyond Simply Sharing Space
When you're considering the expenses you can cut by sharing space, it's worth considering more than rent. You may not be able to share a phone line -- or you may need to put a second line in -- but you can split costs like internet access and cleaning very easily. If you're comfortable with the owner of the organization you're sharing space with, you may also be able to bring down other costs. For instance, you can go in together when ordering office supplies, making it easier to get a bulk rate.
Take a look at where your needs overlap, as well as where you use different vendors. Something as simple as combining orders to a vendor may make both of your businesses able to negotiate a better rate.
Subletting and Other Options
Subletting a portion of your space is not the only option available when you are ready to share space with other organizations. One alternative might be creating a co-working space: Rather than subletting the space you might normally hand off to another business, you could set up a couple of desks in that area and invite local businesses to make use of the space on an as-needed basis. You can charge a daily or monthly rate that allows freelancers and business owners just starting out to come in and use the space when they need it. Another alternative might be to barter with a contractor you work with. A small business that is looking for its first space might be willing to trade services that you need for a workspace. It's important to talk to your network to find what you can offer and what you can get.
Thursday Bram is a senior writer at Wise Bread, a leading personal finance community dedicated to helping people get the most out of their money. Get daily money tips by following Wise Bread on Facebook or Twitter.
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