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Why Your SMB Should Consider an Alternative Office Space Before Getting Locked Into a Lease

By Office Space TorontoIn standard8th December, 2015

It is no big secret that money is a major concern for many start-ups and small businesses. Office space can be a drain on resources for any business, large or small. Office space can put a lot of strain on the principals, since most landlords of commercial real estate will demand 3-year to 5-year lease terms and personal guarantees when trying to rent or lease an office to a small business or company with a short history and a short track record. This is not a decision new companies who are looking to grow can afford to make without looking at all the office-space solutions available.

Generally speaking, any business that has office space will find that its office space is one of the highest fixed costs that they have each month. As a small business trying to get started, they need to be thinking creatively about what their office space needs are, and what the possible alternatives are. Thinking ahead and identifying creative approaches to office space can be the best way to save time and money. The good news is that, unlike employee wages and most other fixed costs, your office space costs can be easily lowered by choosing a less desirable location or by choosing to go with alternative office space rather than a more traditional office-space solution.

What is an alternative office-space solution? Alternative office space started out as more of an office design concept. However, over time, the term has morphed into more of a philosophy for office-space providers and business centres led by the co-working revolution that is currently sweeping the industry off its feet! For small businesses that do not need a dedicated office (but still need a place to work), there are co-working office spaces. Coworking centres are very flexible and allow you to rent by the day, month or year. The key to co-working spaces is that they also foster collaboration and stimulate creativity.

Thinking beyond traditional raw office space, you might consider shared office space. which is basically bartering with another business who has excess office space that they are willing to share. This type of situation can work really well when you have a service or product that you can offer these businesses in exchange for their excess office space. Beyond the savings in rent, the “sharing an office space” solution does have some negatives that stem from not being the lease holder, or not having the ability to set policies for usage of such space.

Business centres (sometime referred to serviced office spaces) are another great alternative to leasing office space, because many of these alternative types of offices have:

  • Short-term or long-term rental agreements
  • Month-to-month flexibility in the amount of space rented
  • No desks or business furnishings, phones or internet to pay for or maintain
  • Rent includes the required support space (waiting area, boardrooms, etc.) in addition to the work space
  • Rent includes most of the business equipment any business will need
  • Rent includes reception area and professional reception and telephone answering support staff

Serviced offices in an office business centre can also cut down on having to worry about setting up and paying for internet connections, hooking up phone lines, and maintaining these services – because everything is included in an office package. Business centres generally provide a receptionist, conference rooms, kitchens, and everything a small business needs to set-up their business quickly and efficiently and get down to business.

Not being locked into a long-term lease (but a month-to-month situation instead) allows a start-up to reduce risk. An advantage to business office centres is that they can encourage collaboration and networking opportunities for small business owners.

Depending on staffing needs and desk space, these types of office arrangements can be flexible in terms of size. When a small business needs more space, it is easy to increase space or the number of offices, without having to change the business address or telephone number. If your business is local in nature and dependent on the internet for sales and or leads, then your advertised address and phone number can be very important to ranking in Google’s local results.

For a home-based business that is not already using a business centre’s virtual office solutions (address and telephone messaging etc.), having a static address and phone number that is not your residence or home phone number provides a more professional setting and environment that makes your home-based business seem much bigger than it appears to be. One of the added advantages is that if you need to conduct a meeting, you can have the meeting at your advertised address rather than a café, library or other less desirable location. The greatest advantage to a home-based business using a virtual office solution is that it enables the business to grow out of the home and into an office with no disruption to the business (since the phone number and address do not have to change).

Alternative office-space solution or a traditional leased office?

There are many advantages to alternative office space over traditional office space. The advantages can be summed up by two very important advantages! Alternative Office space, and business centres in particular, provide office space that is relatively inexpensive and provide far more flexibility in the amount of space you rent each month. A business centre will often add more space or offices immediately, without you having to source the required space, viewing it and waiting for acceptance as a tenant.

A business centre pretty much includes all your business equipment, communication needs including internet, receptionist and support space in your monthly rent. This saves you tying up the capital requirements that come with traditional office space – such as maintenance fees, taxes (yes, sometimes you have to pay the taxes) and decorating the office – because sometimes your traditional office space might not even have carpeting!