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Whether you’re setting up your company’s first office or moving your established business to a new location, you’ve got a lot to think about.
If your business is new, you’ll need to examine your needs and identify an optimal location. If you’re thinking of moving, the first step is to analyze why your firm can no longer thrive in your current space, or why business would boom somewhere else. Then, explore the many options available - from ownership arrangements to rental space.
Pre-Move Analysis for Existing Businesses - Find the Right Reason
Before you even consider looking for a new office space, thoroughly analyze what is – and isn’t – working in your current location. An office lease or purchase is likely to be a long-term commitment and one of your company’s biggest expenditures. Factors to consider include:
When you have completed your analysis, score the points in order of priority. The results will help you determine whether moving your business headquarters is the smart thing to do in the near term.
Once you’ve decided to look for a new home for your business, it’s time to do some research and find the best community for your needs. Consider these factors:
Check with city or local government offices to learn about economic development zones and other community or government-sponsored incentive programs.
What Do You Need?
Once you've narrowed your search to a geographic region, it's time to get specific. And that means making a list of what you need to run your business effectively – both now and in the future. Your list should identify the non-negotiable features that your new space must have. It can also identify items that you’d like but could live without. Establishing priorities will help you keep a clear head and make good decisions when it comes time to evaluate your options.
Your list might include such things as:
Your Office Space: Size Matters
When assessing your office space needs, some standard rules of thumb apply. Figure on 175-250 usable square feet of space per occupant. Of course, this can vary considerably, depending on the type and style of the business.
If you work in a creative environment where teamwork is important, you may want open areas to collaborate. On the other hand, when employees are involved in phone negotiations, research and other high-concentration tasks, private offices or cubicles may be more workable.
Factor in Cost
Once you’ve identified what you need, consider what you can afford. A fabulous space that’s way over budget is seldom a good choice, but the cheapest option may not be your best bet either. Weigh the costs and benefits of each location in terms of your requirements and goals. Think critically about what you really need to help your business succeed. And remember to factor in utilities, taxes, build-out costs and other expenses.
Get Help from the Pros
Once you've done a cost analysis and market research, engage a qualified real estate or buyer's agent to take you through the purchase or rental process. Agents understand the market, know the area and can help you find the right fit for your circumstances.
A good agent can also help you and the landlord develop win-win compromises on items like rates, improvement costs, rights of expansion, renewals, and lease cancellation terms.
Agents may also help with:
Office Costs - Buying Versus Leasing
Buy or lease? Which will best suit your business, your finances and your future goals?
Here are some things to consider:
Buying office space may require cash up front, but the benefits may make the investment worthwhile. Benefits of buying include:
However, buying can also have its drawbacks:
On the flipside, leasing office space allows business owners to set up operations in prime locales at affordable prices with little initial cash outlay. But as with buying property, there are two sides to consider.
Benefits of leasing include:
Downsides of leasing include:
Tips on Closing a Lease Deal
Commercial real estate experts advise projecting your long-term space needs before signing a lease agreement. Standard contracts may run for several years, so plan accordingly. Other tips to consider:
Plan for the worst. Understand what would happen if you had to break your lease or if a fire or natural disaster struck your building.