By Kevin Conner
There’s something very invigorating about the beginning days of a business. Whether you’re running it out of your garage, or from your home office, or some borrowed desk space at your father-in-law’s shop, these rugged conditions almost make it more fun.
But the reality is that someday you’re going to need to move away from these makeshift offices and into something a little more serious. Yet this move is a pretty big deal, mainly because it can be expensive and stressful. Between rent and all the associated costs, you’ll also need to worry about equipment, furniture, insurance, internet, phones, and much more.
But there are other reasons why you should or shouldn’t move into an office. And to help you decide if this is the right decision for you, then consider asking yourself these questions:
Can You Afford It?
As we mentioned earlier, moving into an office can be expensive. It’s going to significantly expand your overhead cost, so you need to be able to absorb this without sacrificing growth.
The simplest way to answer this question is to plan out how much it will cost for you to move into an office. This means calculating and adding up all the expenses associated with the move. And it’s useful to split these expenses up into one-time and recurring costs.
One Time Costs
Some one-time costs you need to account for are:
- Rental deposit. Although you will get this back when your lease is up, this is still a big expense you need to deal with in the beginning.
- Furniture. Getting an office means it’s time to buy office furniture. Calculate exactly how much you need and how much it will cost, then add it to your bill.
- Service installation. Internet and phone service will need to be changed. Some companies will do this easily and for free, whereas others might charge you a fee. It’s also smart to look at some of your service providers to see if you could be doing better. For example, you could see if there are better value broadband internet service providers out there, as this can help you save some money both during and after the move.
- Moving expenses. Depending on how much stuff you are moving (equipment, inventory, furniture, etc.), you may need to hire a moving company. Determine if this is necessary and then get a quote so that you can start planning your budget.
Once you get an idea of your one-time costs, take a look at the company accounts to see if this is a hit you can take. You may want to talk with your accountant, as sometimes you can deduct these expenses from your taxes. Then, it’s time to look at some of the recurring costs, such as:
- Rent. How much are you going to be paying per month to use the office space?
- Building fees. Many office buildings or parks have community maintenance fees each tenant needs to pay to help keep up the property.
- Utilities. The current building manager should be able to tell you how much you can expect to pay, but it might also be a good idea to see if there are cheaper alternatives you could be using.
- You should be insured against theft and damage to the building, so speak with your insurance agent to find out how much you can expect to pay for this once you move into an office.
After you’ve calculated these costs, take a look at your books. Add these expenses to your current monthly overhead and see what that does to your profit margins. They will obviously take a hit in the beginning, but if you’re expected to go through a period of growth, then you should be able to absorb this hit.
Do People Come to Your Office?
We all know how important first impressions and appearances are. And this applies to your office, too. It’s completely fine to run your business out of a garage, until you need to invite a client in for a meeting, or a job seeker in for an interview, in which case you would need to invite them out for coffee.
This is fine every once in a while. But if you are finding that you need to constantly schedule meetings outside of where you work because you’re embarrassed to bring people in, then it might be time to find a place for your business to call home.
Is Your Technology No Longer Enough?
The other major reason to move into an office is to make it easier to collaborate. We have many digital tools at our fingertips these days, but there still isn’t anything that can beat the effectiveness of face-to-face communication.
Yet for businesses that are first starting out, it might make sense to hire people remotely. However, as you grow and things become more complex, it might be harder and harder for you to work together in a digital environment, turning office space into a necessity for you and your team.
For this, you may want to consider asking your employees. You may find that although it would be easier to put everyone in one spot, people enjoy the flexibility of remote work and are willing to put up with the hardships that come with this type of arrangement. However, if you feel this is getting in the way of pushing the company forward, then it might be smart to make this move anyway.
Take Your Time
Moving into an office is exciting, but make sure you take your time with it. There’s a big expense involved, and you want to make sure you make the right decision. But if you do decide to move, then consider hiring a corporate real estate agent to help you find the office space that’s right for you and that will meet your business needs.
Kevin Conner is the founder and CEO of Vast Bridges, a customer acquisition and lead generation company. His passion, and the mission of the company, is to help people develop and implement a strategic vision. Over the years, he has worked with countless businesses to help them grow and achieve success, and he enjoys sharing that experience with other business leaders whenever he can.