But this enthusiasm and excitement can often blind entrepreneurs to some fairly extensive, and expensive, issues surrounding work spaces.
Once you’re past the home office/shed/garage stage, you’re probably looking at serviced offices or co-working spaces. These are a great option but make sure you, or your legal counsel, read the leases carefully. Some contain clauses that punish you severely if you decide to leave before the term you agreed to has expired. I once had to fork out seven months’ rent as a penalty because our termination notice wasn’t in the right format!
While you’re small though these places are fantastic and the collegiality and the coffee can make for an energising work environment.
As your success grows, so does your need for space. The private offices in your co-working space look attractive but once you get up to around 10 staff or more and at around 4 sqm per person, you’re effectively paying between $2500 and $3000 per sqm. That’s gotta be some great coffee!
So now it’s time to look at your own offices. Your first step has to be defining your requirements. Every real estate agent in town will flock around you like seagulls around a chip as soon as they know you’re looking. But without clearly defining your needs, you may spend literally days traipsing around properties that are just wrong for you.
Do you have a growth plan?
You’ve got your Series A funding and blue skies ahead of you but the reality is that predicting staff expansion is hard to get right. The fundamental approach here is that you can always get more space. It’s hard to get less. A start up I worked with once leased 600 sqm of great office space. However, for the first two years their growth rate kept the staff levels at less than 12 people.
If you have one, your Property Advisor will be able to work with you on determining how much space you really need.
Where and what?
There’s a bunch of really great places to have an office. Some have amazing views, some are in great neighbourhoods and some are really close to the CEO’s home. But there’s more to consider than just the “wow” factor.
Will you have visitors? Will they need to be impressed? Where are your staff journeying from each day? Do they need End of Trip facilities? Do you need to be close to public transport or do you need loads of car spaces? Does your industry sector congregate in a certain part of town? Will being there help recruitment?
All of these questions, and many more, will impact your costs. But they can also impact your revenue and your company culture. As much as you can, try and sort these questions out before you start looking at premises. If your brief to the market matches your needs well, you’ll save yourself a lot of time and effort when it comes to space selection.
Your co-working space has most costs bundled into one rate – which is good. However, when it’s time to spread your wings there are a range of costs that you’ll need to take into account.
Aside from the rent itself, there’ll be a security deposit of up to nine months’ rent, legal fees to review the lease as well as the potential cost of the fitout required to make your new space your very own baby Googleplex.
You’ll also need phones, IT cabling, printers as well as the right insurances and WH&S setups. There’s a lot to process and frankly, if you haven’t gone through this process at least half a dozen times already, seek professional advice!
There are many commercial property people who can help within their particular sphere. A real estate agent, for example, will be able to help you look at range of properties but they’re still fundamentally driven by the substantial fees paid by landlords once you’re all signed up.
Similarly, designers and fit-out specialists can help with creating an environment that reflects your future corporate culture in pleasing ways but they’re not necessarily best placed to advise you on HoA or how best to break your lease early if you need to.
What you need is someone knows the entire process intimately and has helped guide others through it hundreds of times.
Ideally, appoint an independent tenant advisor who will guide you through all nine major stages of the commercial leasing process. Their fee (and you should make sure they’re charging you one – it ensures their independence) should represent a fraction of the savings you’ll make both now and in the future.