Commercial lease vs coworking
One of the main challenges in setting up a new business is deciding if you need to have an office space dedicated to your business. So, here’s some things that can help in your decision making.
Are you growing a client base you have to meet in person?
One of the main benefits of a dedicated office space is that you can meet clients that you need to meet in person, and you can hold records for. Typical professions where this makes a lot of sense is accountancy or solicitors / law firms.
Of course if you have a service based business like a call centre it makes a lot of sense to have staff come to one location as you can sort out all the tech infrastructure in that one location. Over the pandemic, many could continue such roles from home, but the tech solutions weren’t well implemented. This isn’t because the tech isn’t capable, it’s because the companies were more focused on delivering their service from a central location as opposed to a remote workforce.
Another reason people are likely to need an office is if you’re starting up an agency and want to show off your portfolio of work and/or impress clients.
Essentially, though, an office means people coming to you.
If you’re not needing to grow a client base, then a dedicated office may not be the right solution for you
What does it mean to have an office?
If you’re going to take an office, this normally means committing to a lease over several years. That length of lease is important because you’re contractually committed to that property for that length of time. A typical High Street commercial lease is likely be between 3-5 years. An inner town / inner city lease is likely to be 10 years+. So you have to know that you are going to have enough income to be able to cover the lease payments.
Like any long term commitment like this, you’re also having to pay costs like heating and electricity, ongoing maintenance and cleaning. There may also be service charges, where you are committed to making payments to the landlord for the landlord to provide regular maintenance and general improvements as they see fit. Add to that other costs like either hiring or buying furniture, office fit out and marketing and advertising costs. E.g. a GP practice requires a surgery where patients can come and meet the various health practitioners and receive dedicated help.
So as well as running your company, you’re also regularly thinking about the maintenance and running of the office.
If that sounds like a lot of commitment, it is!
Is it just you, or are you looking to grow and expand?
If your business is likely to just be you, you really need to be clear about why an office might be a good option for you. It’s a lot of commitment and maintenance which may end of up being a financial burden that you do not need.
If you think your business has room to expand and take on staff then it makes sense to take on an office where you can provide services. E.g. If you’re starting a catering business, although it is likely to just be you in the beginning, you’re likely to grow and need a team as you gain more work. However, a project manager working as a contractor is likely to stay a solo business and not expand.
If it’s likely to just be you, and an office is unnecessary, then coworking might be a good option.
Why coworking is a good alternative to a commercial lease
Community - if you’re regularly working for yourself, or doing independent work, it can feel lonely. Coworking allows you to work in a shared space with others, meet with other business owners and create a community where you are welcomed. Members will generally be supportive and want you to succeed.
Flexibility - it’s really helpful for independent freelancers, contractors and business professionals to know they aren’t tied into lengthy lease contracts and that they can use the space on their terms. Also, because it’s local, you are more able to flex your day so it suits your working pattern and not bound by either office opening times or worrying about making the train.
Getting out from home - working from home has a lot of benefits. Having the option of a coworking space means you can change things up, and if you’re a parent and need some mental space away from the home environment, a coworking space is perfect to provide that support.
Networking - part of being in a shared coworking space means you naturally have opportunities to expand your network and creating new business opportunities, or finding out about other professions you didn’t know about previously.
Security - coworking spaces can only be accessed by members, it’s not a like a coffee shop where anyone can use it. Because of this member only access, you know you can bring your kit, and leave it on the desk without worry about security.
