5 Things To Consider Before Setting Up A First Startup Office
BY: SAM DAVTYAN ON FRIDAY, JULY 07, 2017
If you’re running a startup, you may be wondering when is the right moment to open up your first office. This moment is different for every company, which can make it confusing to figure out exactly when you should make your move. These five questions will help you narrow down whether or not now is the right time for you to sign a lease.
Why Do You Want an Office?
If you need a place to meet with clients, or your team members need to have daily face to face communication, an office can be a significant benefit to your company. If you are just moving through a checklist of things that businesses do when they get started, however, an office might not be right for you. Just like Millennials have found that many things their elders did aren’t right for them, not all businesses need office space. In fact, companies that move into an office too early may be jeopardizing their long-term business health and cashflow.
What Other Options are Available in Your Area?
In many urban and suburban areas, co-working spaces have become a middle ground between trying to find a table at the local coffee shop and renting an entire office. Companies can reserve work spaces, conference rooms, or use the communal kitchen to get coffee. These spaces are often useable for much less than the rent in a physical office, which you may not actually need every day.
It’s also important to remember that in the world of Skype and other instant messaging programs, face to face meetings can happen without people being in the same physical space. For some people, this may even be preferable to have an office space that they need to be in every day. For others, this isn’t a feasible situation, and they don’t feel a sense of comradery or shared purpose without the physical connection.
Will Having an Office Boost Your Business Appeal?
One factor to consider is whether or not your business will be seeking venture capital. If so, you may want to have a proper office to show that you are taking your business seriously. On the other hand, if you can’t really afford an office, but you have one anyway, you may be demonstrating to your investors that you aren’t handling your cash well.
It’s natural to assume that investors want to see a professional, polished office so that they can feel confident in their investment, but that may not be universally true. Speak to others in your industry who have successfully gotten loans, investments, or venture capital. Did they have offices at that time? What was the condition? How much did it matter to the investors? Knowing these factors will help you make the right decision for your business.
Can You Afford An Office?
When you look at your cashflow, does having an office seem feasible? Remember to look not just at your high points of the year, but also at the slow times. Will you make enough money during the busy season to pay your expenses throughout the slower times of the year?
Remember to consider extra expenses along with the actual rent. Calculate utilities, snow or trash removal, and rental insurance, to make sure that all necessary outlays are covered. A common mistake is to think of just the rent itself, where there is actually a much higher sum that will be due each month.
Can You Afford The Office You Want?
You might have an idea of what your ideal office would look like, and then you may have found some offices in your area that you can afford. For many startup companies looking for their first office, there is a disconnect between what they want and what they can afford.
For some companies, it’s worth waiting to get the office you want, and making do with co-working spaces, conference calls, and meeting in common areas, like library conference rooms or rented spaces in other offices.
Alternatively, if you’ve found the perfect office space, just right for your company to grow and expand, but you can’t use it all yet, you could consider setting up a portion of the space as rental co-working space, or rental conference rooms. This can let you have just the right space while also generating some extra income for your business.
If you can’t afford the office you want, however, your company will be in the awkward position of deciding if they want to go ahead and rent a less than ideal space, or wait and grow their company in alternative ways. Like many other details about your startup, only you will know which choice is right for you and your business.
What advice would you offer to someone setting up their office space for the first time?
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