You can launch a startup from the luxury of your home, but it doesn’t have the same pop. There’s nothing like having an idea and watching it come to fruition, from hiring employees to renting office space. So, you go out and get some quality real estate that will act as the firm’s official headquarters.
On the face of it, you’ve done well. From humble beginnings, your startup has a home, and a good deal to boot. Unlike other companies and entrepreneurs, your trajectory looks stable and secure, and you expect great things to happen.
The dark side of office space? What dark side of office space?!
This is a contributed post. Please refer to my disclosure for more information
Locked-In Rental Agreements
Most business owners don’t have the money to buy a commercial property outright, which is why you leased office space instead. After all, it helps you save money while providing flexibility. At least, that’s what people think, yet the reality is different. Without a break clause, you may be locked into paying rent for the next decade. That’s not very flexible, not when an alternative space may pop up and cut your costs by one-third.
Minimum, you need semi-regular reviews to lower your yearly payments. But, this won’t be possible if you didn’t think about it beforehand, and even then, it’s every three to five years.
Storage Space Will Suffice
The idea of having limited space in which to work isn’t appealing. Moving into a storage unit, or constantly moving stuff from the office to a unit is less inviting. However, it depends on the dynamics of your setup. GlaxoSmithKline found that while 35% of work was completed in cubicles, 85% of the floor space was taken up. Like many businesses in this position, they found self storage to be cheaper, more accommodating, and more productive. Plus, it’s not a massive commitment, unlike a long-term lease.
Unstable Valuations
Landlord and commercial property owners will tell you that their offices are worth X amount. And, they may even have some evidence to back up their claims. Still, the chances are that the price is set by using a tiny cross-reference of sales and rentals. A home, for example, can be checked against thousands of others in the area that are sold regularly. Offices are different as they’re less popular, so the price could be higher than necessary and cost you money.
The worst thing about it is that there’s no way to tell unless you live in a business hub.
Work From Home
The reality of COVID-19 is making bosses realize that remote-based working is the future. Previously, it was a novelty that some companies used to their benefit, yet most didn’t understand its importance. Now, more and more organizations know that they can make the transition and that it is a healthy one for the business and employees. In short, there’s no need to spend money on rent when you can work from home and hire PO boxes to appear more professional.
How do you feel about office space? Can you see the dark side, or can you not see it because of the light?