There are a number of reasons why a business owner might start an office space search but almost all searches should take into consideration several important factors.
Whether you’re starting a new business, outgrown the work-from-home office, looking to upgrade to larger premises or even downsize your operation, searching for an office to let can be both exciting and daunting in equal measure. While no two businesses are the same, almost all of them will require a certain set of conditions to not only survive, but thrive.
To help ensure your business finds the best home possible, Unit Management shares with you the Top 10 Things to Consider in Your Search for a New Office.
1) Do I actually need an office or work space?
It may seem an odd way to kick off our Top 5 but arguably the biggest thing to consider when searching for office/work space is whether your business either needs, or is ready for it. Many young businesses are inclined to find suitable office space at the earliest opportunity but without wishing to start on a downer, stats would suggest that over half of all UK businesses go bust within their first 3 years of trading. 1 in 5 don’t make it past year 1. There’s several reasons why this might be the case; poor product/service, lack of demand, mismanagement to name a few, however, more often than not, the numbers just don’t add up. Cashflow can be crippling, even if your product or service is faultless.
Overheads place a large strain on cashflow and your business finances. Overheads often means your business starts every month in the red before you can even start thinking about turning a profit. Office space will likely represent a large proportion of your monthly overheads with the possible exception of staff salaries. Making sure your business is ready to bank roll a premises is a big decision and one you should plan for with a ‘worst-case scenario’ or ‘disaster plan’ in mind. Having enough capital to cover your agreed term and/or notice period is a good place to start but always make sure you’ve read over contract terms before committing to an office lease agreement.
If at this point you’re still unsure about whether or not your business ‘actually needs an office’ consider drawing up a list of a pros and cons and decide whether it’s integral to business ‘success’. If you’re not on friendly terms with programmes like Microsoft Excel consider asking an accountant, bookkeeper or even a friend to draw you up a spreadsheet with some simple formulae that can forecast your finances on a good month and a bad month and help you work out what kind of office space you could comfortably afford.
2) What kind of office or workspace to I need?
The second factor to consider is probably slightly more straightforward and obvious but equally important; what kind of office or workspace does my business need to both operate effectively?
In the age of digital service-based businesses, traditional office space remains popular with small to medium businesses but is not always essential. Flexible offices and co-working (or Hot Desking) have become increasingly popular with smaller, leaner businesses, startups and entrepreneurs that like to operate without lengthy contracts or fixed surroundings. Providing their laptop or tablet can connect to a reliable Wi-Fi connection, a professional working environment is all that’s required to reach optimal productivity and performance.
Many businesses will prefer to occupy their own space and draw comfort from continuity. An established client-base and steady steam of income can make traditional office space more appealing with fixed contracts providing better value over longer periods than shorter-term flexible space.
Of course for some businesses, a desk simply provides a space in which to carry out administrative duties whilst their core business revolves around a tangible product or physical service. Some workspace providers, such as ourselves, offer light-industrial and storage units to firms that require functional space for their plant equipment or stock.
Your workspace should compliment your business and make work as efficient and as convenient as possible, allowing you to carry out your work in an environment that promotes productivity and profit.
3) Location, Location, Location
The importance of this factor has likely fluctuated over the last 20 to 30 years but there’s a number of reasons why the location of your next office remains so important.
Pre internet and iPhones, the location of your business would have been integral its success. ‘Shop local’ is a phrase made popular during the early days of the Covid-19 pandemic but prior to ecommerce giants like Amazon and other popular online retailers, ‘shop local’ would have been the norm. Fast forward a few years and suddenly businesses were no longer limited by their locality. Products could be shipped across country at the click of a button and traditional services like accountancy and bookkeeping could be rendered digitally, without ever needing to physically meet with the people that will scrutinise your most intimate finances.
Post-Covid-19, the sentiment of ‘shop local’ has sustained and search engines such as Google (where over 90% of all buying decisions begin) have continued pushing ‘local’ businesses. If you need a new washing machine, Google will first and foremost suggest to you a local shop on their map where you can physically visit and purchase a new machine. It may still be shipped across country but there is a focus on the consumers ‘want’ to visit a physical location. If you’re looking for an accountant to assist you with tax returns, that local accountancy round the corner that you’ve always walked past but never actually acknowledged, will likely appear at the top of Google too.
Google’s search result algorithm is a sign that bricks and mortar or physical locations are in fact just as important as they once were 20+ years ago. You stand the best chance of capitalising on your target market if you’re present in their area so don’t overlook location when it comes to customer base.
Further to this point, location has a practical value with regards to your own convenience. Finding a place of work where you can get to and from with ease is a big factor to consider when choosing an office or workspace for your business. If ‘time is money’, you don’t want to be sat in traffic jams for 3 hours a day. Equally, if you’re looking to travel by train, proximity to local transport links such as train stations should form a large part of your consideration. How quickly can you get to and from neighbouring cities such as London or Manchester without adding hours of inconvenient travel to your day.
4) How much does it cost to rent an office?
When looking at the UK as a whole, the single biggest factor that determines the cost of office space is usually location with London topping the charts as the most expensive to rent per square foot of space. (no surprises there). Fast-growing cities such as Manchester and Birmingham are slowly catching up but the average cost of office space in London costs just shy of £130 per square foot, per annum including any applicable rates and fees.
A single workstation office will typically require 100 sq.ft. of space meaning the average cost of a single person office in London could cost your business £13,000 a year or £1,083 per month. (See Lambert Smith Hampton 2022 TOCS Survey https://www.lsh.co.uk/total-office-cost-survey)
London is of course a big city and real estate prices vary greatly depending on where in London you’re looking to rent an office and since Covid-19, demand for office space has cooled slightly as more businesses look for hybrid working solutions that require less space. Some areas have become more competitive when it comes to traditional office space, particularly in suburban areas like Tolworth, Surbiton and Chessington in the South West.
Remember averages are just a guide and reasonably priced office space can be found in many different locations across London if you know where to look.
Another key factor in how much it costs to rent an office will of course be the standard of the office itself and the facilities available. Some office providers offer all inclusive solutions that include reception staff, mail handling, phone lines, high speed internet, furniture and so on. Other providers may just supply you with an empty room, leaving you to sort out things like internet, phone lines and furniture. All of these factors will have an impact on the price you pay each month so consider what is essential to your business and what you can cope without.
5) What facilities should be included?
As touched on in the previous point, the facilities available to you in your new office or workspace should have some bearing on your decision making when it comes to choosing a new office. A reliable internet connection has become an essential component for many businesses so make sure to check what kind of internet speeds are available at the premises. Some business centres can now offer up to 1GB high speed internet along with building-wide WiFi connections.
Depending on what type of business you run, you may find other services of use such as mail or call handling and onsite reception teams who will meet and greet visitors or manage any issues you might have. Some offices will have on-site parking, break out rooms, business lounges and more. For some businesses, these facilities might not be essential but if you are looking to drive to your office daily check if the building offers parking and if so, are there any costs involved?
Another popular facility which business may look for is that of meeting rooms or board rooms. Meeting rooms offer an ideal space in which to conduct business meetings with clients or training with employees. Access to meeting rooms may allow you to save costs on your office space if you were previously considering allocating valuable office space to a meeting area.
That wraps up part 1 of the Top 10 Things to Consider in Your Search for a New Office. Check back soon for part 2 where we’ll share more insightful information and considerations when choosing your business’s next home.