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June 29, 2020

Are You Aware of the Hidden Costs of Office Space?

While it is true that remote workers and at-home-startups save money working from home, as your business grows, most small business owners reach a point where home and business need to happen in separate spaces. When you need a real office, you start looking around to lease commercial office space. So many factors go into finding, leasing, and outfitting an office and this endeavor often takes the focus away from your core business initiatives. We know that just finding and leasing an office can be a full-time job. 

Commercial leases can be complicated and expensive

A commercial office in a reputable neighborhood will not come with a bargain price tag. The popularity of coworking/flexible workspaces evolved partly because office leases in good neighborhoods proved prohibitively expensive to tech companies and startups that didn’t actually need full-time physical office spaces. At first, an office of your own seems like the most business-like move you can make to grow your company, but since most commercial leases involve at least a three-year commitment you may not feel comfortable with that level of obligation yet. When you start looking at office spaces, there are a few other things to keep in mind before you sign on the dotted line.  

All-inclusive or not

Some commercial leases, called “gross” or “fully serviced,” mean that your monthly rent is all-inclusive but most of the time, office leases only include the monthly rental, which will be lower than fully serviced leases. However, this means that in addition to the rent, you’ll be expected to pay additional expenses to get your office up and running. These include, but are not limited to:

·         Utilities

·         Insurance

·         Maintenance

·         Cleaning

·         Common Area Maintenance (Lobby, Elevators, Parking Lots)

Personal guarantee could be costly

If you are a first-time renter, you’ll likely be required to sign a personal guarantee. A personal guarantee allows landlords to collect the entire lease amount from you personally even if your company files bankruptcy. So, if your business experiences challenges in the first year and you signed a three-year lease, your landlord can collect the entire amount of your lease. Breaking it down, if your rent is $1000 per month for a three-year lease, that’s $36,000 you’ll be asked to pay your landlord whether you are open for three years or not. 

Your Internet connection

Commercial rates for things like fiber-optic Internet will cost several times more than the residential rates you’re familiar with. Fast dependable Internet is important for your business because unlike cable and DSL, fiber Internet speeds are synchronous. For businesses that upload large files, this means that it takes the same time to upload files as it does to download files. 

You’re going to need some office furniture

Not only are you going to need furniture but also, a look that speaks to your brand’s image. This includes paint or other wall coverings, possibly flooring and rugs or carpeting. If your office has a reception area, you’ll need a focal point, such as an art piece or specialty lighting installations that make a statement at your entrance. One or more ergonomic office chairs are a good investment but you will want to go through a commercial office furniture company. 

Coffee? Tea? 

In a solo office, you can brew a pot of coffee or make tea for yourself, no problem. If you’re a gourmet coffee drinker, then it’s off to a local coffee shop, for you. That’s a $5 a day treat that can cost over $100 each month. 

What about snacks and meals? 

While most office spaces for one to two people don’t usually include a kitchen or even a sink, you may have access to the building’s kitchen. If that’s the case, you could bring in your ingredients and make your lunch there. You could just pack your lunch but if that’s just not your thing, you’ll need to budget about $10 a day for lunch. As for snacks, that’s on you! If it’s just for you, it’s simple but when others are involved or you have a lot of in-office client meetings, then individually wrapped snacks need to  be purchased and distributed to appropriate areas. 

Who’s going to clean your office?

Some leases may include basic trash emptying and vacuuming, weekly. If your lease doesn’t include office cleaning, then you’ll need to contract a company to clean your office, although many independent cleaning pros might not charge as much.

Overwhelmed and disillusioned yet? No need to be. A realistic, money-saving office space awaits you!

Venture X to the rescue!

With flexible, monthly contracts that include everything you need to do business every day, including coffee, tea, and water, it’s no wonder coworking spaces, such as Venture X, have changed the way people like to work. In addition to business class office equipment, cleaning services, and first-class amenities, you can choose your workspace, to fit your needs, whether it’s a space to work once or twice a week, a full-time dedicated desk space or a private office. Our diverse community of small, medium, and large business professionals offers opportunities to build your brand’s base and feel a part of something larger than just your own business. 

Owning a business is about growing that business. Venture X allows you to get right to work in our upscale surroundings, without taking your focus off your core business initiatives, while saving a significant amount of money. At Venture X, our goal is to help our members grow their businesses and spark their creativity. 

Contact your local Venture X to schedule a tour!