How to Choose a Space For Your New StartupEvery business needs a place to call home. Here's how to find the perfect spot for your next venture.
Congratulations! You’ve decided to open up your own small business. You already have a great idea and have put together a killer business plan, so your next step is to find a place to house your company.
Perhaps you’re just starting a new business and need to find a space. Or maybe you’ve been working out of a home office or in a co-working space. But now, you’re ready for a place of your own.
Determining what kind of space your business should rent or buy is not a simple decision. To help you make the best choice for your situation, consider these tips from other small business owners based on personal experience.
Thoroughly look over the lease
If you’re going to rent a space, make sure you read through the entire lease carefully before making a decision.
Florida-based chiropractor Gena Bofshever reviewed her 40-page lease with a commercial real estate attorney before signing on the dotted line. “[Attorneys] will keep you best protected and covered for things like non-competes [and] proper verbiage,” she said.
Decide if you want a short- or long-term lease
If you’re just starting your business and haven’t been working for a while out of another space, you’re going to want some flexibility when it comes to your lease agreement.
Kyle Golding, CEO and chief ideal strategist of The Golding Group, said, “The key to any startup is flexibility and liquidity. You don’t know how the market will respond to your new business (good or bad). Being locked into an expensive or long-term lease is not good for a startup.”
On the other hand, if your business has been successfully running for several months or years, a multi-year lease is not as risky. Bofshever, who was already an independent contractor before establishing her own business, said she chose a five-year lease with a renewal option.
“If you had a five-year lease with no option to renew, you would have to renegotiate rent and common area maintenance charges with your landlord at the end of year five — and those five years will go by in the blink of an eye,” she said.
Choose a location convenient for customers
To give your new business the best chance at success, you want to make sure your customers and clients can easily and frequently visit your space. Look for a central location that serves the majority of your customer base.
Bofshever said when she switched from being an independent contractor to establishing her own business, she decided on a location only a seven-minute drive from her former office.
“I didn’t want to risk losing any patients due to distance,” she said.
John Crossman, president of retail real estate firm Crossman & Company, said he selected his office space because it was convenient to local highways. He was also sure he didn’t want his business operating out of a high-rise building.
“Most of our people are leasing agents and they need to be able to move quickly,” he explained. Because it takes more time to get to from a car to the office in a high-rise building, he knew he wanted a space that was easier to come and go from.
Look for productivity-boosting features
Your space’s environment should promote productivity and help keep you and your employees motivated throughout the workday. When looking at office options, consider what features will help you accomplish these goals.
Chris Griffiths, CEO of productivity software company OpenGenius, said his company’s headquarters were chosen because the space is bright and open and allows for more collaboration between staff — as well as providing more opportunities for those coveted “light-bulb moments.”
“Your surroundings will affect the way your team works. We understood that,” he said.
To boost productivity and facilitate growth, Griffiths said the company decided to invest in some added features, such as a gym and games room. “The gym gets the blood pumping and the ideas flowing, while the games room lets residents take a breather from work.”
When you’re starting a new business venture, there’s always the possibility that it might not perform as well as expected. That’s why it’s important to start with a smaller space and then go bigger as your business grows, said Golding.
“Your startup can save money and have the flexibility you will need if the company grows rapidly (or dies),” he explained. “Utilize tech and creative solutions instead of [paying for] ‘fake it until you make it’ office spaces that make you look big, important or successful. That flashy image will not pay your employees’ salary, taxes or other necessary operational expenses.”
Don’t forget to think about the future
Once your company is standing on its own legs and doing well, then you can sign a multi-year lease and grab a bigger space.
Kershan Bulsara, partner at Roofmaster Ottawa, said his company recently bought a new space, even though they’ve been in business for more than 36 years. After evaluating their current warehousing, storage and parking needs, they found a new location that would give them room to expand, he said.
His advice: “Always think about the future of your business when looking at office space. Imagine what you’ll need in a year, and act accordingly.”