By Michael Zhou
For small businesses renting a perfect office space is no less than putting their best foot forward in the journey of entrepreneurship. But commercial real estate is an uncharted territory, for there are inherent scopes of committing mistakes in it. These key mistakes on the part of owners can cause them dearly in future.
If you have just started your entrepreneurial journey, understanding rewards as well as pitfalls of decisions made while leasing office space should be one of your topmost priorities. The fact is office rent is also a significant expense that you are going to incur, which is why you need to be extra cognizant while completing real estate transactions.
Here are 5 most prominent mistakes small businesses often make when leasing office space, which you need to avoid:
1. Choosing the wrong location
To begin with, certain factors like demographics, accessibility and visibility are very crucial for success and growth; thus, shouldn’t be under looked. Since you must have determined your business’ needs, so you must ask certain key questions to yourself: does your business require local resources? What kinds of zoning restrictions your business might encounter? The best location therefore is one that minimizes costs and maximizes earnings. You should consider incorporating enough parking spots for employees and clients, plus easy access for couriers and other deliveries. Some places offer incentives for businesses that bring economic development to certain areas; these incentives may include tax breaks, exemptions etc. So, keep an eye this fact too.
2. Lack of due diligence
A proper due diligence is very important before conducting a real estate transaction for business purposes. Hence, try to get access to demographic reports, traffic counts as well as future economic plans. Try to get in touch with good brokers that are in the know as to what other tenants are considering leases, which will be extremely helpful for you in analyzing competition. Furthermore, you should closely inspect every piece of paperwork, no matter how trivial it may seem, for leases are designed to mainly protect the interests of landlords. Make sure to know your legal bounds so that you can figure out move-out procedures, which will surely prevent financial impacts on your business. Apart from the careful examination of paperwork, check all HVAC systems and electrical equipment for occupancy readiness and code compliance.
3. Ignoring health and safety factors
Incorporating health and safety procedures for employees, clients and customers is vital for any business. In addition to that, it is also in your best interests to ensure safety standards for your fellow occupants in neighboring premises. So, if you are carrying out office re-fit, a few careless steps could create hazardous environments during the process. Make sure that desks, furniture and equipment are placed in such a manner that should not obstruct evacuation procedures during an emergency. You should also keep in mind that inadequate lightening and acoustic dampening might create long-term physical and mental health impacts on your employees. Therefore, if such a situation arises, you should consider incorporating office removals before embarking on commercial real estate navigation.
4. Not facilitating common spaces
Common spaces and comfortable congregation places can go a long way in collaboration and socialization of your employees. Such strategic spaces offer a break to your staff from work related stress while building positive relationships in the workplace. Such a move can create a big impact on both output quality and employee well-being. With regards to budget, if you are low on space, consider setting dual purpose meeting rooms, which could be used on official meetings on demand and for fostering a change of pace. Additionally, the facilitation of common spaces can also be used for organizing special events in your office, which is a great way for achieving employee satisfaction and retention.
Procrastination can cost you heavy especially when you want to forge a profitable deal in commercial real estate. It is well recommended that you should begin searching for space at least 6 months prior to your estimated move. Generally, the process of commercial real estate lease is longer than expected. Finding the right space, negotiating for the best rate and having a property built to suit your needs, all must line up before you are going to occupy the new office. Moreover, waiting for too long may mean fewer valid options for you. Just like a thorough preparation in life always pays off in the end, a timely profitable real estate deal can also help you save a good amount of money.
Leasing an office space for business purposes is a strategic move for entrepreneurs, which should be made with thorough preparation and due diligence. Hence, keeping these common mistakes during this process can reduce your expenses and hassles.
Michael Zhou is a Senior VP of Business Intelligence Development and has assisted the Fortune 1000 company with expertise in the web as a whole, including ground-zero marketing efforts that benefit both consumer and vendor. He is also contributor on Esprittoday.