Has your startup hit a growth spurt? Congratulations! But now that you’re generating revenue and need to hire more employees, it’s time to upgrade from the garage to a professional office.
Finding the perfect office space for startups can feel exciting and overwhelming for budding entrepreneurs. There are many factors to consider, and you must carefully weigh your options as this decision can make or break your business. To ease the process, we’ve compiled this comprehensive guide on how to choose a startup office space.
1. Know How Much Space You Need
To determine how much space your company needs, decide how many square feet you want per employee.
Many companies opt for high-density offices, i.e., 80-150 square feet per person. Average density offices (150-250 square feet per person) allow for a traditional layout.
You can fit a mix of open cube/desk space and private offices. If the majority of your office space will be dedicated to large private offices, aim for 250-500 square feet per employee.
An important aspect of this process involves planning for future growth. Choose an office that not only accommodates your current space needs, but also the space you’ll need throughout the life of the lease.
If you have a rapid growth projection, this may mean securing extra space that you can grow into. Alternatively, you can secure a short-term lease that works for now and move as you grow.
2. Different Types of Leases
If you are working with a corporate real estate advisor, they will take over and find the best office spaces for you. Even so, knowing the different types of leases can be helpful.
A gross lease (or fixed lease) means that you pay a fixed rent amount every month and includes taxes, insurance, and other costs. A modified gross lease means that in addition to a flat rent fee each month, you take on a share of the operating expenses.
With a net lease, the tenant takes on the responsibility of all operating costs. While expensive, this lease gives you complete control of the space. You can modify it to project your brand’s image. The downside is that you never know how much you have to pay every month, which isn’t good for a startup entrepreneur.
The rule of the thumb is not to sign a lease that’s longer than you’ve been in business. The standard is a 5-year lease, but even that can be fatal to 2–3-year-old startups. The landlord may consider a short-term 2-year lease if renting a small space of fewer than 5000 square feet.
3. Focus on Location
While there is a temptation to cut down on costs by opting for the cheapest office spaces, location can make or break your business. Cheaper spaces are often found in less central locations, which translates to longer commutes for your employees.
On the other hand, a centralized location makes it easier for employees to travel to and from work. This increases retention of existing and future talent.
Other factors to consider when choosing your office location include neighborhood quality, noise levels, and lighting. Ideally, the new startup office space should be near lunch spots and coffee shops that your employees will frequent.
As an early-stage startup, you’re probably on a budget and will have to forego some of the above features. Decide on the two or three location aspects that truly matter and prioritize them.
4. Consider the Different Types of Offices
Many new entrepreneurs and startups opt to rent flexible offices such as co-working spaces, shared offices, and temporary office spaces. This is because they are flexible, move-in ready, and offer short lease terms.
However, leasing your own office is best if you anticipate quick business growth. This gives you the freedom to customize your space and impress clients. It also helps with talent retention since your employees aren’t subjected to the constant interruptions and noise associated with co-working spaces.
5. Perks and Amenities
You’ll need a variety of perks, amenities, and equipment depending on the type of business you are running. For instance, law or financial firms will need private meeting rooms for confidential conversations with clients. Audio and video conferencing equipment is necessary if your employees work remotely.
These perks come at an additional cost, so only choose what you absolutely need. You don’t want to spend a significant fraction of your startup budget on amenities no one uses.
Here are some things to consider:
- In-office security and 24/7 building access
- Fitness centers in or near the building
- Adequate common rooms like washrooms, showers, and kitchen
- High-speed internet connectivity
- On-site or nearby parking
- Private meeting rooms
- Modern and functional furniture and design
- Printers, scanners, phones, etc.
Check for amenities that suit your specific business needs.
6. Work With a Tenant Representative
Regardless of the budget at your disposal, working with an experienced tenant representative who understands the Austin commercial real estate market can prove beneficial. They will analyze your long-term needs, provide guidance with site location, and help with lease negotiations.
Commercial leasing agents often have access to off-market deals, speak the same jargon as property managers and landlords, and know the office market. They are not necessary but are a powerful resource to have when you need office space for startups.
Work with a tenant representative who is on your side, someone who will put your company’s needs first without conflicts of interest. Other qualities to keep in mind when choosing a tenant representative include local market experience, follow-through, and timeliness, as well as a clear understanding of your needs and expectations. Check out Austin Office Space for more help.
Choose an Office Space for Startups
Finding the right office for your startup is certainly not without its challenges. It takes up a lot of energy, resources, and time. If done right, with the above tips in mind, the results will be worth it.
Start early and plan things out, know your budget and stick to it, and choose a central location. A functional office space for startups is crucial to the success of your business. For more insights, browse our blogs.
