When you begin your journey in the business world, you’ll most likely start at your home. In fact, most new businesses do, and they put up an online store so people can reach them. But, as your business grows, so, too, should your business space. After some time, you’ll have to move your business out of your house and find a place to operate it.
Now, you might consider buying a property to run your business, but you should stop yourself from doing that. Owning a commercial property has a lot of benefits, but it may not be the right time to do so. Instead, it’s best to find and lease a small office space for your business.
As a new business owner, this can be both exciting and stressful. There are a lot of factors you need to consider to find the perfect office space that meets your needs. Not only that, but it also has to be within your specified budget.
Luckily, the whole process doesn’t have to be stressful. Not when you’re equipped with the right information and resources from the start. In this article, you’ll learn about the steps you need to take to find an office space that is the best fit for your company. We’ll also throw in some office space features you may need to watch out for before signing the lease agreement.
How to Find and Lease an Office Space That Meets Your Business Needs
Before we proceed, you need to know that the first few years are critical for your business. That is, a lot of businesses fail during the first five years of their operation and one of the key reasons for this is a bad location. That’s why you need to put a lot of thought into finding the right office space for your business.
As this article will show, there are a lot of decisions that need to be made with the management of an office space. You don’t have to make the decisions alone but can hire the services of a Commercial Facility Management company to help guide you.
Finding an office space that fits your needs includes careful planning. It often involves analyzing what your business needs, budgeting, and negotiating. All these can be overwhelming, especially for new businesses.
Not only that, but you also need to research the market. Some spaces are owned by individual landlords, and some are owned by a company. This can affect how you choose an office space to rent. A Office leasing company can help you find the right place for your business. Their offers include retail, office, executive, and industrial spaces.
But these services are only good if you know what you’re looking for. Before hurrying to find commercial space in the market, there are a few things you need to do first. Here is a step-by-step guide to finding the perfect space for your business.
- Find Out What Your Business Needs
Identifying your company’s needs comes before choosing an office for your business. In fact, this should be the first thing you do.
Business spaces offer different features but make sure you find one that has what you need. For starters, you need to know where the space should be located, and how big it should be. You also can’t forget about the needs of your employees, and potential company expansion. For example, for some businesses this NYC Office Spacemay be a perfect fit, based on their current staff count and location. But for some companies, it won’t be a good fit, so it’s important to take all of these things into consideration.
Below are some key questions you need to ask yourself:
How Much Space Does Your Business Need?
There are a lot of factors that can influence your space requirements. This includes how many employees you have, the type of workspace they want, and if you need conference rooms.
Employees often need 75 to 150 total square feet of workspace each. On the other hand, management-level staff requires 150 to 400 square feet.
Other factors include a conference room, waiting area, and other client-oriented facilities. You can also include other spaces like a copy room, kitchen, mailroom, or break room.
Which Area Should You Move to?
Finding an office space that meets your company’s demands in a suitable area is essential. But, choosing the office that is next to your favorite cafe isn’t the only consideration in this choice!
You need to move to an office that is beneficial for you, your employees, and your clients. That means an office with on-site parking for cars or bikes or one that is close to public transportation.
You can compare the pros and cons of having an office in the middle of town against one on the outskirts, but be sure to take into consideration factors like accessibility, cost, noise, and customer exposure. It also helps to look into any nearby attractions, like pubs or shops.
More importantly, each state has different laws governing commercial leases. So, while you’re looking for “Dallas office space for rent,” make sure you understand the terms of the lease.
For example, see if the state considers oral lease agreements to be enforceable. That means you can make an agreement to move into the property even without a written agreement. But, you should know that this will not protect your legal rights.
Additionally, if you don’t have a written agreement, your lease term will only be for one month. Once it expires, the landlord can evict you without much notice. In cases when you need to use the space for more than a year, you can’t have oral agreements.
What Do Your Employees and Clients Need?
Aside from space, there are other things that your employees may need. This depends on the kind of business you run. You can have a particular interior design, access for staff and customers with special requirements, and parking options.
When assessing client and staff needs, some of the factors you need to take into account include:
- Interior design – Your office space’s interior design will rely on the kind of workstations your staff needs. You should also factor in how many meeting spaces and client service areas you require.
- Parking accessibility – This depends on how many staff members your company has, and how many clients often visit your office. You also need to look into how many tenants are in the building. If you’re leasing a separate commercial space, find out how many nearby parking spaces are available.
If you’re a software business, you will need a more open, collaborative workspace. But, if you’re running a doctor’s clinic, you should have separate workspaces with individual, private rooms.
- Determine the Right Type of Office Space
There are many different types of office space available for leasing. Open office plans are popular today, but they’re not suitable for every business. Despite its benefits, it still boils down to your specific needs, and there are many options for renting an office space. Dallas, for example, has traditional commercial spaces, as well as executive and industrial ones.
Here are a few types of office spaces to think about before leasing one:
Traditional Commercial Space
Traditional office buildings are often multi-story office skyscrapers with lobbies and restrooms. Most of the time, landlords are in charge of all cleaning, upkeep, and repairs.
They also include parking spaces, but they are calculated by square footage. So, if you lease 5,000 square feet, you can get 10 to 25 parking spaces. You should also expect parking in downtown locations to be more expensive.
Other features of a traditional space include:
- Reception areas.
- Conferencing and break rooms.
- Private offices.
- Bullpen.
Typical Term: 3 or more years.
Creative Office Space
Creative office spaces (or open office spaces) have the same style and layout, with:
- High ceilings.
- Floor-to-ceiling windows.
- Stunning carpet tiles or wooden floors.
- Large break rooms.
- Fewer partitions and private offices.
- Several glass walls.
This type of office space encourages functional teamwork. And since there are fewer walls, it fosters communication among employees and managers.
Typical Term: It varies.
Coworking Office Space
With coworking spaces, you can rent for shorter periods. This also means that you’ll be sharing meeting spaces, break rooms, and even desk areas. This is your best option if you’re still a small business or a digital startup that requires temporary office space. You can rent a desk area, a room, or a group of rooms.
Typical Term: Per month, but some allow 6-month to one-year term agreements.
Executive Office Suites
Executive suites are like coworking office spaces. They both provide shared common areas like lobbies, reception spaces, break rooms, and conference rooms. You can also rent a small office space with executive suites. This way, you can enjoy the shared facilities while renting less space for an office.
The only difference is that these suites are plug-and-play. This means they are fully furnished with internet, furniture, phones, and reception services. Since everything is included in the price, this is a cost-effective, and reliable choice for a small business.
Typical Term: Per month (6, 12, or 18 months).
- Consider Your Budget
When choosing your first office space, you also need to consider how much it will cost you. Before you start looking, you need to identify how much you’re willing to spend on your office space. This will help you look for suitable options, and determine how much you can afford to pay for a workspace.
It can be tempting to choose the cheapest office space up front, but you need to make sure that the place matches your business needs and expectations. Likewise, overspending on an office forces you to pay for unnecessary space. If your company faces financial difficulties in the future, you’ll find it difficult to cover the high cost.
Rent is one aspect of expenses you need to be aware of. To know how much you can afford, find out your business’ revenue. Then, you can subtract your estimated income from your annual rent.
For example, you found a place that rents for $2,000 per month ($24,000 annually). If your gross income is $150,000, you can allocate 16% of the amount to rent.
Will that be good enough? It still depends on the type of business you’re operating. A 15% budget for a workspace is appropriate if you’re running a law business. But if it’s a retail business, it’s safer to allot 5% to 10% for rent.
Other expenses include utilities, common area maintenance (CAM), and operating fees, and property taxes. You should also consider the expenses you will make with buying furniture, fixtures, and equipment.
- Search the Market for an Office Space for Rent
At this point, you’ll need a tenant representation broker to help you search the market. They can help you look for available office space to lease in your specified area. Not only that, but they can also talk to the landlords and owners to schedule a tour. This gives you more time to focus on operating your business.
If you’re doing it on your own, make some time to visit the property. You should tour the place, and use the amenities to check if they work. Make a note of each observation you have about the space. This saves you a lot of trouble in the future should there be anything wrong with the features of the place.
Market research doesn’t only involve the place you’re leasing. You should also find a property managed by people who can deliver your every need. Even though the terms for leasing are great, consider that you’ll be working with the owner. If they’re hard to work with, you’ll soon face challenges in the future.
- Negotiate the Price of the Office Space
Once you’ve picked an office space that suits your needs and budget, don’t be afraid to negotiate a lease. If you’re working with a broker, he will haggle over the terms and make sure you get the best offer.
If not, then you should read your lease carefully before signing. By doing so, you can make sure it doesn’t contain any provisions for rent increases or subletting.
There are three different commercial office lease agreements:
- Full-service lease – In a full-service lease, the landlord is in charge of covering all costs related to the property. This includes the utilities, repairs, maintenance, property taxes, and insurance. This is a popular type of commercial office lease agreement because it benefits the tenant a lot.
- Net lease – In a net lease, the landlord can charge a lower annual rent than in a full-service lease. But this also includes monthly “ordinary costs” like CAM fees and property taxes.
- Modified gross lease – Tenants with a modified gross lease pays their share of the rent and other fees in one flat amount. This means that there aren’t any additional fees, and you’ll pay a fixed rent rate.
Don’t Skip the Process
If you’re looking for an office space to lease, you need a lot of patience and due diligence. Take some time to understand the process that goes with this. Keep in mind that the office space you chose impacts the effectiveness and productivity of your business.
Additionally, office spaces are expensive, especially for new businesses. That means you can’t afford to make mistakes and relocate from one place to another. By following the steps above, you’re a step closer to finding the office space that suits your business needs.