Choosing an office space is one of the most important decisions your business will make. It’ll shape what your business can do for months to come. And it’ll be the deciding factor in who you employ and how you target your clients. Thus, it’s important to get the decision right.
You might think that your choice of office is reversible. If you don’t like it, you can get out of it and find another. But the commercial renting market is very different to the residential renting market. In the residential market, minimum terms can be as little as six months. In the commercial market, they’re rarely less than three years and usually, they’re five. This all means that businesses need to think really carefully before they sign anything on the dotted line. Is your business asking the right questions before moving into a new office space?
How Secure Is The Rental Rate And Lease?
Most businesses rent, rather than buy office space. They do so because it gives them a degree of flexibility they wouldn’t otherwise have. Plus, it removes the need to save up a vast quantity of capital which could be better spent elsewhere. But renting also brings with it problems too. One of those problems is the fact that the lease will eventually run out. The last thing any business wants is to become established in their office, only to be turfed out when the contract runs out. Experts recommend, therefore, that the language of renewal be baked into the original contract. Make sure that the agreement has something along the lines of a first refusal for your business. You want to be first in line to rent the premises when the lease expires. This puts you in a strong negotiating position.
The other thing you want to do is to make sure that the original contract limits the amount the rent can rise. Right now, the commercial real estate market is booming, partly thanks to the health of the economy. And that means that there’s pressure on rates to rise. Businesses need to be careful that landlords don’t just jack up their rental prices. And so the best thing that they can do is to agree when signing that rents won’t increase by more than a certain amount. Usually, that amount is around 5 percent.
Will You Sell Your Company During The Lease?
Landlords like to make sure that they get paid on time. So they’ll try every trick in the book to keep businesses and individuals paying. Say, for instance, that you decide to sell your company. You might think that the responsibility for paying the rent falls to the new owners. But many landlords place liability for future rent on the original signatories of the contract. That means that if the new owners of the business don’t pay up, you’re personally liable for the rent. You don’t want landlords coming for you for money years after you’ve finished with the business. So if you are planning to sell your business, make sure that contract has provisions for this.
Is The Office ADA Compliant?
Jason Hughes is the president of a tenant representation company. His advice to commercial tenants is that they check new offices for compliance with the Americans with Disabilities Act. Usually, landlords are responsible for this. Companies should make sure that commercial door hardware is compliant, and that doors require no more than five pounds of force to open. They should also be at least 32 inches wide so that people with disabilities can freely move between rooms. Carpeting in open public areas should also be raised up by less than half an inch off the ground.
Is There Enough Parking?
The amount of parking available at your location is important. Check to see whether the parking is tight or whether you have enough room for colleagues and clients. If there’s only enough room for customers, ask whether there’s somewhere nearby where staff could put their cars. Colleagues may be able to negotiate special rates for parking.
However, if it’s really hard for your colleagues or customers to park, then it’s unlikely they’ll do business with you for long. Both will look for companies with more convenient parking facilities.
It’s important to remember that parking offers your business a competitive advantage. People are more likely to travel to a location where they can just dump their car than somewhere that they have to circle around looking for a space.
What About Hidden Costs?
The price of your new location isn’t just the upfront rent. It’s all the other little costs that are involved in moving to new premises. One premises might have a rent that’s, say, $100 more than another. But the cheaper place might now have proper insulation or double glazing. So, you might end up spending an extra $200 a month just trying to heat the place. Experts recommend businesses get the help of a broker in these situations. They need to know the full costs of moving to new premises, including the hidden costs. Restoring a space or moving in better furniture can be a significant cost barrier to starting up in a new location.
Is The Office Right For The Clients?
The type of office that your company inhabits is a signal of its success. But it can also be problematic. Companies with lavish offices are often doing very well. But clients may wonder whether they’re paying over the odds. After all, it’s their money that is paying the rent.
Offices that are too cheap in appearance can be problematic too. Customers will be unimpressed and wonder whether the company is in sound financial shape. Thus, it’s important to get the balance right. What type of signal your office should send out will depend on the kind of company you operate. But most companies will want to tread a fine line between luxury and practicality.
The location of your company for clients is also important. Most clients won’t be willing to travel for miles to get to your office. So you should consider offering alternative services, like Skype, to get in touch.