startup location

By Rieva Lesonsky

For small business owners just starting out—especially those on a budget—there are more options than ever before for where to locate your new business. In some cases, of course, the decision is pretty much made for you. When you open a restaurant or a boutique, you have to rent a commercial location. But in other situations, the choice of startup location isn’t so obvious.

For example, what if you’re starting an accounting business, a consulting firm or a graphic design company? When your business basically entails sitting in front of a computer all day, do you really need to rent office space to do that?

Here’s a closer look at some of your startup location options and the factors to consider.

  • How do you work best? Personally, I work better in a stimulating environment such as a bustling office or coffee house. Since I run my business from home, I frequently need to get out of the house to focus. You may feel the opposite, like my business partner who welcomes the solitude of her home office and can’t focus in a crowded environment.
  • Who are your customers? These days, it’s pretty easy to meet with prospects and customers in their own workplaces or even at Starbucks. However, if that won’t work all of the time or if you need to convey a more professional image than shouting over the sounds of the cappuccino maker can create, working from home may not be your best bet.
  • Will you need employees? No matter how well you know your team, having employees work at your home is definitely intrusive and generally makes everyone involved feel uncomfortable. If your business requires hiring, you’ll either need an outside space or need to hire virtual employees who work from their own locations.

So what are your options when it comes to office space?

Commercial space: Using a traditional office as a startup location provides stability, professionalism and the space you can decorate to suit the business image you want to convey. You can also modify it to the needs of your growing business. On the downside, renting a traditional office can quickly become expensive, especially when you include factors such as utilities, maintenance of common areas and the possible need to update the space. You also have to commit to a lease, which may feel too restrictive when you’re just starting out.

Home-based office: This can be a good startup location option for those who have a dedicated space to work. It will definitely save you money on rent, as well as time spent commuting. However, in addition to the downsides mentioned above, working from home can make it hard to “turn off” your business at the end of the day.

Co-working spaces: A relatively new option for entrepreneurs, co-working spaces have really taken off in recent years. You can find a wide variety of co-working spaces, including ones tailored to different industries such as technology, design and more. Typically, these spaces offer common work areas that include cubicles, enclosed offices, meeting and conference rooms, and business equipment such as copiers and fax machines. Unlike traditional commercial office space, co-working space can be rented on a short-term, monthly or as needed basis.

Co-working spaces are an offshoot of what have traditionally been called executive suites — places where you can rent enclosed offices in close quarters with other businesses and gain access to common services such as a receptionist, copy machines and phone service. (Regus is a big name in this industry.) However, the vibe of co-working spaces is generally looser, younger and hipper. If you like rubbing shoulders with other entrepreneurs and benefiting from the creativity that can result when ideas are shared, a co-working space might be a good option for you.

To find a co-working space near you, just search “co-working spaces” online. You’ll likely come up with dozens of options nearby, especially if you’re close to a major city.