When you’re just starting out with your small business, one of the biggest decisions to make is whether you’re going to continue running it out of your home or if you’ll invest in some amount of office space to house all your equipment and employees.
If you’re uncertain about the way your business will develop in the future, this is a fairly risky investment to make, but if your business does flourish in the meantime, it’s one that will practically pay for itself within a year’s time.
For small businesses, getting past the first year is one of the most important milestones, as more than 50% of businesses fail within the first year, whereas the rest gradually fall off in the years after.
That being said, not all businesses are doomed, and if you’ve got an idea that’s marketable and has potential for success, there’s no reason to hide it, and you should try to make it work.
Getting started
While getting a new office for your business does sound exciting, there are a number of things to look out for, including whether your business can afford it and for how long before it begins impacting profitability.
Ideally, you’ll want to expand when you feel like your company’s revenue is increasing, as you’ll be able to foot the additional costs while also retaining the ability to pay your employees and stay above the water.
Expansion of your business can be tricky to manage, but if you’re looking to make the most of every dollar, it’s an inevitability that every successful business has to go through.
Doing your research is key, and you’ll want to get the most office space for the money you’re paying, as better office space will be more effective at boosting productivity, and efficiency and establishing your company as a legitimate tax entity.
Evaluate the space you’ll need
The first thing to do is to carefully examine your operations and deduce just how much office space is actually needed.
If you’ve only taken on a couple of employees, there’s no point in renting out a huge office unless you’re planning on hiring more staff in the near future, as it’ll essentially be money you’re throwing away.
That being said, you could use the extra space for storage but do account for the fact that this inventory will have to be relocated later when you do begin expanding your business.
It’s much more likely that you’ll be upgrading to a larger office space than to a larger warehouse, so keeping your inventory in the office space you’re renting out could lead to complications later down the line.
Find the office configuration that fits your business
You may not have known it, but offices come in many different shapes and sizes, and you’ll want to settle for the office type that’s best suited to your company’s needs.
Apart from Small and Single offices, most business owners tend to overlook the many office layout options out there, leading them to make the wrong choice and take unnecessary losses due to this uncalculated decision.
For example, an office suite is great for an up-and-coming company that’s expecting to take on additional employees in the coming year, as it’s got enough space to accommodate them while also having shared and individual spaces to meet all of your employee’s needs.
On the other hand, a private office is much more optimized for smaller teams, as it allows them to adapt on the spot and expand slowly without inconveniencing any other company members.
Finally, we have virtual office space, which isn’t technically a physical area, but it’s a great investment for any company that has employees working from home, as it gives them a hub to refer to between tasks and access conference rooms with other employees.
Keep your budget in mind
The most common mistake first-time business owners make when renting out/buying office space is taking a bigger bite than they can chew.
It’s not uncommon for a business owner to overestimate their company’s financial capabilities and completely overshoot their initial goal, leaving them with hundreds of square feet of unused office space that they’ll continue paying for.
Always keep your budget in mind, and before making a big decision, calculate everything at least twice, as it’ll help you keep track of the money you’re working with while also giving you a better idea of what your company’s capabilities are.
Of course, this doesn’t mean you should be a cheapskate when it comes to office space, and renting high-quality real estate may improve employee and customer satisfaction, so long as you’re doing it right.
Keep working on ways to expand your company and improve efficiency and the rest will come on its own, and when the time comes, begin expanding your business into a larger, more homely environment.
