Once upon a time, owning a business meant having a bricks-and-mortar office. Nowadays, many entrepreneurs work from home. But if your paperwork is crowding out your dining room, it may be time to consider renting an office space. How do you find the right setting that fits your needs? Keep on reading.
What type of office is right for your business?
The first step is to decide if your business truly needs a separate space or if it can continue to flourish without an office. And if it does, what type of ‘office’ it requires. For example, a co-working space may be a viable option, which provides a “hot desk,” (meaning you pay for a desk space in a shared office environment), and you can look for one that offers wi-fi, printing services, meeting spaces, and community events.
If you are looking to hire employees, or you’re meeting clients throughout the day, a coffee shop may not cut it. Transitioning to an office may make more sense for growing your business. Not only does an office space project a professional image for your business, it can also help with work/life balance.
What should you look for when renting an office space?
No doubt you’ve heard the mantra “location, location, location.” It’s no different when renting an office. We’d also add another word: parking. Make sure there is ample parking for employees and customers, or that the office is accessible by public transit.
Another important consideration is how much office space you actually need. A good rule of thumb is to allow anywhere between 125 to 225 square feet per person. Plan ahead. Are you looking to hire in the next six months? Consider how much space you’ll need to grow your business and the office spaces available. Generally rectangular office spaces are more flexible for configuring desks. Other things to consider are whether you’ll require a separate conference room, storage and access to a kitchen.
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How much should you budget for an office space?
Predicting cash flow is a challenge for many entrepreneurs, which is why it’s important to set a budget for renting an office.
Apart from paying rent each month, there are other costs to consider:
- A security deposit, which can vary from one to three month’s rent
- Office furniture cost
- Legal fees to cover the cost of a lawyer reviewing a lease
- Insurance – your lease may stipulate you carry Commercial General Liability Insurance or Tenant’s Legal Liability Insurance
- Utilities, such as telephone and internet
Learn more about 5 ways to fund your business.
How do you negotiate a commercial lease for office space?
Commercial leases in Canada vary largely. Every commercial lease is different, which could give you room to negotiate.
1. Tenancy Costs:
Commercial tenancy costs vary from a gross lease where the tenant pays a flat rate each month to a triple net lease that requires the tenant to pay rent, in addition to the costs of maintenance and repairs, property taxes and insurance, etc.