By Bobby Goodman
New offices bring excitement, inspiration and opportunity to any business. For startups and SMBs, new offices also signify company growth. But it’s easy for SMBs to get overwhelmed with the search process and all the options out there, so it’s important to take pause and prep. Renting and moving can be confusing, expensive, and time consuming. Growing startups and SMBs need to carefully evaluate immediate and future needs before setting up tours and jumping into a new space.
Here are five steps startups or SMBs should take before starting to search for an office.
Step 1: Pre-Plan
Before every search, company leadership should ask themselves where they see the company in one, three and five years from now. If a startup is expecting major growth, then maybe a short-term lease makes sense so it can move in the near future. A more stable company could consider a 5-10 year lease, which often offers better lease terms, such as a lower rental rate and a larger concession package (construction allowance & free rent) from the landlords.
Overall, businesses need to understand that an office is more than just a physical location for your company. The vibe and design of an office helps attract talent, establishes credibility to clients, and impacts a company’s culture. Each of these factors should be considered before proceeding with the search.
Step 2: Prioritize
What is most important for your office? Before hunting for the perfect space, company leadership should outline key priorities for the office along with any nice-to-have amenities. This is a good time poll your employees or have an internal focus group. Outlining this criteria will quickly narrow down the list of properties to ones that meet the needs of the company.
Some questions to consider include the following:
- Do you need to be in a certain part of town and/or near public transportation?
- Is it important to be close to certain clients?
- Do you need a specific office buildout or will the company consider a sublease or pre-built out space?
- How much capital expense can be allocated towards constructing the space?
- Do you need private traditional offices or open space for cubes and standing desks?
- How big of an office do you need?
- Do you need parking?
- What is your company’s technology needs?
- How often does your company host clients and/or have team meetings? How many conference rooms will you need?
- Do you need common areas for staff?
- Do you need a bigger kitchen to serve healthy snacks and meals for staff?
Step 3: Understand the Bottom Line
An office is often the biggest investment that a company will make. Before the search begins, it’s crucial to understand a realistic budget. Otherwise, a company could fall in love with an ideal location or a super cool space only to kiss it goodbye. However, a budget is not one-size-fits all and it needs some wiggle room. By setting high and low end budget guardrails, SMBs can pursue offices that will meet their needs without breaking the bank.
Step 4: Consider the Address
While an office is more than an address, the address is often people’s first introduction to the company. Several years ago, employees were willing to travel for a job, but there has been a shift — today more businesses move to the talent instead. In Chicago, companies that were once located in the suburbs are moving downtown in order to attract and retain talent. Before starting a search, a business needs to know if location is a priority and which locations should be considered in the search.
Step 5: Allow Enough Time
Finding the ideal office space takes time and the process should not be rushed. Startups and SMBs need to factor in six to twelve months for their search and office build out. This ensures they will meet their criteria and that the end result will be a strategic solution that will grow with the company.
Is it possible to get it all done in less than six months? Yes, but expect those six months to be stressful. The accelerated time frame will limit your options and require that you act swiftly and decisively every step of the process.
New office space is a big deal. For startups and SMBs this step usually means the company has achieved some notable milestones. The fact is selecting an office is a big decision that comes with significant financial commitments. Additionally, the process can be confusing and lengthy with many different options. By following these five steps, companies can count on a simple, efficient and successful process.
Bobby Goodman is co-founder of Truss. Bobby has over 15 years of experience in commercial real estate. The majority of his career has been with Colliers International and Jones Lang LaSalle. He has completed hundreds of transactions and has well-rounded knowledge in all areas of commercial real estate. Truss can also be reached at Twitter, LinkedIn and Facebook.