Planning to set up your own first office? But finding the right space becomes one of the most exciting and disruptive challenges for any start-up. Here are the vital aspects you need to consider while searching for an office space.
How To Start
Well-defined business and real estate objectives enable you to decide quickly. Location, planned growth, transportation needs, optimal space configuration, estimated space requirements, parking, technology requirements, timing, and budget are important considerations.
Begin your search with a clear understanding of your needs, budget, and specifications. The process and time required to occupy a space should be included in the list of considerations.
A project leader as the single point of contact is chosen. Besides, the IT, HR, and finance departments are roped in from the beginning. The team leader should be highly experienced in corporate real estate and facilities.
Have a team of advisors. A real estate agent who specializes in representing startup units can be helpful in this regard. Only he can understand the special needs of a startup business.
Hire an experienced real estate lawyer to make sure you have flexibility in the lease agreement. The terms and conditions should be fair and protect your interest. In reality, most first drafts of the lease are unfair to the tenant. A cost-conscious real estate lawyer will get you a better deal.
When To Start Looking For Office Space
Most new businesses and startups make a wrong assessment regarding the time required to acquire office space. Finding office space is a lot more difficult than finding an executive suite in a month.
If you need direct lease office space, many factors impact the timeline for your search. The space you need and what is available, the prevailing market conditions, the time needed to negotiate, lease documentation, mandatory permissions, space planning etc.. In case you require less than 10,000 sq feet, you should allow at least four to six months for a proper search. In case it is higher, have at least six months to almost a year in hand.
What Kind Of Financial Guarantees Required
Landlords prefer to have financially stable tenants. You should be able to project the strong credentials of your company. A security deposit from the founder is sought. Share bank statements or a letter of credit and provide references that establish you have good prospects. However, be careful about providing a personal guarantee of the lease obligations. Your personal net worth is at stake.
The Options Available
Assess the options you have- shared, co-working, sublease or direct lease. Property owners prefer five to seven-year lease terms. Some accept three-year term on a direct lease. The longer the term of the lease, the wider your choices. Before finalizing a direct lease, explore other options like shared space and sub-lease as they offer more flexibility in terms.
How Much Space You Need
The rule of thumb has decreased 200 to 250 square feet/person to as low as 100 to 150 square feet/person. Here are a few steps to ensure you are looking for the right size office:
Make Head count Projections For The Expected Lease Term
You should lease space so that two-thirds or three-quarters of the way through the term, you start reaching the occupancy limit.
Look For More Efficient Spaces
Rectangular spaces versus angled corners of a building. Floor plan and layout matter. There is no point in paying for office space you cannot utilize properly.
How To Narrow The Search
You must tour all the viable options though it is a time-consuming affair. Several key issues have an impact on the quantity and quality of your space. Refine your search and include certain parameters.
The longer your lease term, the more choices you have. But a startup does not want to sign a five-year lease. A later year, you realize your space does not meet the needs. A good agent shares a nice rapport with landlords. He helps in identifying the buildings and spaces that offer more flexible lease terms. Look for a term period that suits you.
Pay attention to the layout. A rectangular space is more efficient and supports more people. Have layouts that support your business requirements.
A kitchen, pantry, shared conference room, transportation, parking ratios, security, elegant washrooms, high-speed internet connection, and the number of electrical outlets create a big difference. Prefer the space where you get these differentiators.
Study the cost, access and the actual spaces your employees and clients need for parking. Before signing the lease, visit the parking zone, identify your spaces and count them. You should know many vehicles can be parked at the same time.
Find The Right Location
Make sure your key employees consider the geographic boundaries when you search for office space. Most employees want to know whether or not the office is convenient for them. If you see clients in your office, consider whether or not the location is convenient for them. If the commute costs go up, they prefer to look for jobs closer to the city.
Allocate Proper Budget
Cost is a big worry when it comes to acquiring an office space. Do not choose an office space that puts your company into debt and hampers growth.
There is no need to create a big impression with a swanky office. Focus on the quality of work instead. Look for a smaller space and create a good image first. Once the initial phase is over, you can shift to a better, costlier space.
Make sure your office has proper security and fire-fighting measures in place. Your team spends the most part of the day at the office space. Make sure the vicinity is a secure one for women employees. Apart from elevators, there should be an accessible staircase and emergency exit gates.
Find a space with a culture that you network and work productively. It is an important consideration you need to make.
A startup business must be careful with each and every step while renting the office space otherwise it suffers a huge financial loss.