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Ah, the smell of fresh paint. The lure of a sparkly building. The excitement of finally setting up shop in your very own office.
Choosing your first office space is thrilling. It can also foreshadow your business’s future. If you aren’t careful, selecting the wrong space could spell doom for your venture.
OK, maybe not exactly doom. But still, deciding on an office space is a pretty critical component of your startup’s success.
Spending more than you can afford may force you to close those beautiful new doors faster than you can get them opened. And spending too little may scare away your customers.
What’s an entrepreneur to do?
7 Questions To Ask When Choosing Your First Office Space
Not many business owners can resist the idea of legitimizing their entrepreneurial journey with a physical storefront.
Before biting off more than you can chew, ask yourself these questions.
1. Do You Need One?
The first question any shrewd businessman or woman should ask is whether they need an office space in the first place.
Online startups with no employees likely don’t need a lavish storefront when starting out. If you start an online company, you don’t need to worry about customers coming to your business.
You might decide to work from home rather than taking out an additional loan or lease. Plus, the IRS lets qualifying home-based business owners claim the home office tax deduction.
When you’re just starting out, holding off on new expenses can save you from racking up more debt.
Of course, being cheap can equally put a nail in your business’s coffin. If consumer transactions don’t take place online, you likely need a physical storefront.
Before making a decision, analyze your business’s needs. Would an office space help or hurt your particular venture?
2. What Does Your Budget Have To Say About It?
Before buying a house or going on a trip, we look at our budgets. Can we afford it? What about all the additional expenses that come with a new house or vacation?
When choosing your first physical storefront, confirm that you can afford it—not just this month, but also next month, and in six months, and in a year.
Your business and its financial risks are always changing. Figure out if you could afford the office space after hiring new employees or dealing with inventory shrinkage. If you’re pushing your budget, you may need to walk away.
Give yourself a cushion when shopping for office spaces. And, look beyond the basic rent or monthly loan amount. Consider things like:
Understand what’s included and what is extra before signing. Estimate additional expenses, like utilities, to see whether you can afford the space.
3. Are You Going To Be Here Forever?
By this point, you may be familiar with my company’s startup story. If not, allow me to recap. We began in the basement of a factory.
We didn’t have now-standard luxuries like heat and air conditioning. Our floors flooded. I saw rats, birds, snakes, and flies make frequent appearances. You know what we had for walls? Blankets.
My first office space was less than ideal. In fact, it could have been the perfect setting for a horror story.
But, I’m going to let you in on a little secret—the dreaded factory basement was perfect for us at the time. It was a necessary stepping stone to get us where we are today … a beautiful brick building in the heart of Belden Village.
When choosing your first office space, take things slowly. Find out what you can do without in your first office space. List out what features you absolutely need. To help, ask yourself:
Are you going to be here forever?
If the answer is no, you might opt for simplicity. By cutting back on unnecessary features, you can devote your budget to growing your business.
Many small business owners rent office space rather than buying it off the bat. So, err on the side of caution by being frugal with your first business storefront.
4. How’s The Location?
By this point, you’ve (hopefully) done your target market analysis. Before signing your lease or purchase agreement, verify your target customers are near the location.
Making sure you’re somewhat near your target customers is only the beginning. Location also applies to:
- Neighborhood safety
- What’s around
- Who’s around (i.e., competitors)
You may want to think twice about setting up shop in the middle of nowhere if you thrive on customer traffic. Likewise, you might not want to invest in an office space that’s right next to your biggest competitor. Or hey, maybe you do—I don’t know your strategy.
Think about whether the location can accommodate your business and its goals. The area that works for someone else might not work for you.
5. Will It Support Current Plans And Future Growth?
We all know that dwelling on the past is bad. In my opinion, dwelling on the future can be just as damaging to your business’s wellbeing.
That doesn’t mean we shouldn’t factor the future into our decisions. What I mean is that we can’t fixate on the future and let it dictate all of our decisions.
When choosing your first office space, consider the present and the future. Moreso, you should focus on the present and near future. Will the space support your current operations? Could it support future operations?
Let’s look at an example of what I’m saying. You may want to select a space that’s big enough to fit you and a decent-sized team. However, you shouldn’t rent out or buy an entire building for you and your two employees because you think your startup is going to take off overnight.
Basically, don’t select an office space that’s at max capacity, or you’ll be moving each time you hire a new employee. And, don’t pick an office space that you’ll fill up tomorrow only in your wildest dreams.
Choose something that’s practical. It should mesh with your current goals but also support reasonable near-future goals.
6. Does This Space Match My Business’s Brand?
Unless you run an online-only store, think about how the office space represents your business. Most of the time, a business’s location is intrinsically linked with its brand.
Make sure your office space represents your business well and positively contributes to your brand.
For example, part of my company’s brand is transparency. Therefore, I use my building to reinforce the idea of business transparency. The offices in my building all have windows to promote openness.
Set up your office space in a way that shows off your company’s personality, maximizes efficiency, and encourages customer visits.
7. Can You Fix It Up?
If you’re not crazy about the office space as is, find out if you can fix it up. Learn what you can and can’t upgrade if you’re renting.
Modifying your office space may involve something as simple as a new coat of paint. Or, it might require more involved activities like ripping out a shaggy carpet and putting in wood floors.
After my company’s first office space in the factory basement, we moved into another building. But before we made the move, we put a lot of energy into fixing it up.
We worked in the basement all day from 8 a.m. to 6 p.m. Then, we headed over to the new building and worked on it until midnight.
Our second office space might not have been perfect, but we had a vision for it. And after putting in two sturdy offices, painting, and running our own electrical and computer wires, our vision came to life.
If you are able to fix up your first office space and decide to do so, I have one very important suggestion: Make sure there’s plenty of pizza, drinks, and music.
July 1, 2019 at 09:35AM
Forbes – Entrepreneurs