Top tips for finding your first office space
Moving into a new office space is an exciting time for any business, but finding your perfect office set-up that’s the right size, cost, and location can be difficult. We discuss the different workspaces available and offer five tips on how to find the best office space for your business.
If you have previously been working from home, you may be cautious about committing time and money to lease your first office premises. However, you will find that there are spaces suitable for businesses making this major step, offering flexibility in terms of cost and contract length which is key for when you want to scale up your operations.
Start-ups and small businesses can choose from several different types of office space, including coworking or shared office spaces; serviced offices; and a traditional office lease. Each of these come with their own benefits, which we will discuss below.
Before looking for your first office space, you should make sure that you are at the right stage in your business journey and have the necessary funds to afford it. You may be able to source a business loan to help with the expense of moving into a new office, but you should ensure you have the means to make the repayments.
You should also go into your search armed with information about your budget, business requirements (in terms of space, people, and equipment), and your projected plans, as this will help you to find an office that is suitable for your needs, both present and future.
The number of coworking spaces has multiplied across the UK in recent years as our working habits have changed. They are popular with freelancers, remote workers, self-employed workers, and start-ups, so they can be a suitable option for small businesses that aren’t yet ready to commit to leasing a private office.
Coworking spaces are fully-serviced office buildings which offer a variety of workstations, including hot desks and fixed desks, on short-term contracts. Hot desks offer a flexible arrangement that allows businesses to use any workstation in a coworking space as they need it; whereas a fixed desk arrangement allows a business to reserve one or more desks for the period they need.
The fixed-desk arrangement may be particularly attractive to small and growing teams, as it means they are guaranteed a group of desks where they can work together each day.
Many start-ups and small businesses find coworking spaces offer all the services and facilities they need at a reasonable cost, and at a much cheaper rate than leasing their own office.
The exact facilities provided by each coworking space will differ. Some will simply provide the essentials, such as desks, furniture, printers, storage, and kitchen and break out areas. Others offer extra perks, which may include an on-site gym, café, crèche, leisure activities, networking events, workshops, and social events, but these are likely to come with an added cost.
Some coworking office spaces also have private offices onsite, which could provide an easy transition from coworking on individual desks to having your own office.
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Start-ups in their early stages may find a business incubator can help them, not only with providing office space, but also with launching and growing their business. For example, they can provide equipment, funding, workshops, professional advice, and other resources that will support start-ups as they bring their product or service to market.
There are many types of business incubators in towns and cities across the UK, each with their own specialisms and application process. Some are linked to universities to help graduates get into business while others are private enterprises, but they all aim to offer support and mentorship to stimulate growth among start-ups and young businesses.
Because of the nature of an incubator, the space available to start-ups will be on a limited, short-term basis. The size and type of space available will also vary between incubators, and you may find some incubators don’t actually offer any space at all- just mentorship and other forms of support.
Incubators will not be suitable for every start-up. Some may only be open to businesses in certain sectors and some may have a competitive application process, so it’s important to research the features and terms of incubators and consider if they are the right option for you.
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If your business is growing and employing more staff, you are likely to want your own private office. But this doesn’t mean you need to commit to a long-term lease.
Serviced offices and shared office spaces are popular options for start-ups, SMEs, and even some large businesses, as they offer a range of office space on a more flexible and short-term basis than a traditional lease.
Serviced offices are often fully-furnished and come equipped with the essential facilities that businesses need, so they can begin working from the first day they move into the space.
Because serviced offices offer shorter contracts- some as short as three months- it is easier for businesses to move premises as their circumstances change. It is hard to predict how a new business will fare in a few months let alone a few years, so having a more flexible short-term lease allows businesses to upscale or downscale depending on their needs.
Another key aspect of serviced offices, and another reason for their popularity, is their all-inclusive nature. The monthly fee for a serviced office space will normally cover the cost of associated fees linked to renting office space, such as business rates, insurance, repairs, and utilities- sometimes including phone and internet connection too. Because of this, businesses will only need to pay one bill a month for their office.
Furthermore, the landlord of the office building will be responsible for the maintenance of communal areas (such as the kitchen and washrooms), as well as the overall condition of the premises. The cost of this will be reflected in the overall cost of the lease agreement, and business owners should confirm what is expected of both them and the landlord so there are no surprises later on.
There are different types of serviced offices available, ranging from one single room to an entire floor of a shared office complex. You may also find shared office arrangements where the building is mainly used or owned by one company, who then lease out empty space to other businesses.
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Some small businesses may consider taking out a commercial lease for their own premises because a longer-term contract offers more stability. Although this may be more suitable for more established businesses rather than new start-ups looking for their first office space, some businesses may be considering this.
For example, a business may be ready to commit to this step if they have been running several years and have an established team, with a clear idea of their future plans for the next few years.
However, it is important to research your options and even get professional, expert advice. Because leasing your own premises is a long-term financial and business decision, you need to be confident that it is the right choice for you.
Traditional commercial leases are usually for a minimum of 3 years, often more, which isn’t always suitable for a new and growing business. A space that works for you and your small team for the first few months, may not be fit for purpose later on if your business continues to grow and you expand your team or, conversely, if your business plans don’t work out.
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How to choose an office space
There are several factors you need to consider when choosing any of the above office spaces.
Choosing an office space in a good location for your business needs is key. However, there’s more to this decision than simply picking the office that is next door to your favourite café!
You need to find an office that is convenient and affordable for you, your current or future employees, and your clients to travel to, whether that means easy access to public transport links or an office with onsite car/bike parking.
As part of this, you will have to weigh up the advantages and disadvantages of an office in the town centre or one in the outskirts, looking at transport, cost, noise, visibility to customers, and any surrounding facilities like shops and bars.
Researching the area surrounding an office can also help you to decide if it is right for your business. For example, some areas may be particularly known for specialising in certain industries, so you may find it beneficial to set up alongside other similar businesses, although be aware that this may include your direct competition.
It is also worth considering the overall reputation and safety of the area, and think about what impression this will give to any visitors.
If you are flexible about where you work, you may be interested in looking at where the best cities to start a business in the UK are.
Cost will be a major factor in choosing your first office space. Before you even start looking at offices you should have a budget in mind that your business can comfortably afford, and this will help narrow down your options.
It is tempting to go straight for the cheapest option, but this could result in a sub-standard space for your needs. Meanwhile, spending too much on an office could mean you end up paying for unnecessary space or facilities, and you could struggle to pay the higher cost if your business goes through a challenging time in the future. Finding a balance between cost and your business needs, and being realistic about what you can afford, will help you to find the most appropriate location.
When looking at the cost you also need to look at what the figure actually includes so you are not surprised by any unexpected costs. For coworking and serviced offices, you would expect most spaces to charge an all-inclusive, overall monthly fee, covering most major costs, but there may be “hidden” service charges for certain facilities or for repairs. The details on what your fee includes and any additional costs the workspace charges will be in your contract.
If you take out a traditional commercial lease, you will need to bear in mind that you will have to pay for utilities, furnishings, business rates, insurance, and more, which would need to be included in your calculations of what you can afford.
Whatever type of office you choose, you need to make sure the space is appropriate for your needs. Look at how many employees you have and how much space and equipment each person needs to comfortably perform their work- and from there assess how big an office you need. As well as working areas, you may need to consider rest areas, meeting rooms, and storage space.
Although getting a bigger space than needed may seem a good idea as it allows you to add team members, there is a risk that you don’t grow your team as quickly as anticipated and that you end up paying for space you don’t need. However, getting an office that is slightly too small could make it cramped and difficult to work in.
So, as with all these factors, it is about striking the right balance and finding a space that meets your current and immediate needs, but with consideration to how your circumstances may change in the future.
It is useful to consider your future plans and the scalability of the office space. This is linked to contract length as, if you’re a growing business, you may opt for short-term contracts so you can change office spaces as your team expands and your needs change.
You should also make sure your office is fully accessible and, if there are any issues, see if they can be resolved e.g. by installing a ramp.
4. Contract terms
Contracts for office spaces differ in terms of length, cost, and responsibilities, so businesses need to be aware of what their agreement would entail.
Short-term contracts may be the most appropriate option for a new and growing business. Even though a longer-term lease may seem a cheaper alternative, you need to be certain about making such a big financial commitment as businesses and their fortunes can change very quickly. Not being tied into a contract for a long period of time will give your business more flexibility to adapt to new situations and grow at its own rate.
Because business can be unpredictable, you may want to pay particular attention to the exit terms of your agreement, including the notice you need to give when you want to leave and any fees you may be required to pay.
When looking through your office contract, it is important to look at who is responsible for certain actions. For example, whether you are in a serviced office or leasing from a landlord, you should be fully aware of who is responsible for building upkeep including maintenance, cleaning, and safety. The contract should also tell you how much you can change in your office space, whether that’s changing the wall colour, adding signs or branding, or making larger and more substantial renovations.
If there is any doubt on these issues, either before signing the agreement or while you are using the space, you should confirm the matter with the landlord/office provider.
This point is particularly relevant to businesses looking at coworking or serviced office spaces, as each provider will offer different facilities. When looking at these, you should focus on the facilities you need, rather than choosing a space which offers yoga classes but may not be right for you in other, more important ways!
For example, you need to make sure the lighting, heating, internet speed, furniture, meeting rooms, kitchen and washroom facilities meet your needs, as these are likely to be essential to the operation of your business. Many spaces do also offer other benefits, but these should only be seen as perks and not be the sole justification for choosing a certain space.
Security will be another key point to consider, as you may be keeping valuable equipment in your office overnight.
Whatever space you choose, there are many areas to consider to make sure you find the best one for your needs. With such a variety of workspaces now available, start-ups and new businesses should be able to find a first-time office space that meets their requirements- making this potentially difficult step much less daunting.
Rhiannon is a financial writer for NerdWallet, with a particular interest in personal finance and insurance guides for consumers. Read more