How much does an office cost? Well, that depends on how you define ‘cost’.
When you’re looking to get a small business up and running, figuring out what kind of space you need can be tough. An entrepreneur has to balance cost, convenience, space, and many other considerations in pursuit of their perfect working environment. Often, they’ll have to sacrifice one or more of these concerns for the sake of the others.
The expense involved in setting up a private office is more than many businesses tend to expect. It’s also much more than mere money: the internal resources involved in terms of people’s time in finding your new premises or moving to a new workspace can be more than you may have budgeted for. If you want a productive, collaborative, and affordable office, you will need to consider a range of options.
A report from Storey surveyed business owners to highlight some of these costs – and some of these options. Here are three key expenses involved in the moving process.
- The pre-moving process
When a small business scales up – from a five person start-up to a 20-30 person operation, for example – it often won’t have any choice but to find new premises. However, the broad consensus among business owners is that the process of doing so is more complex than it needs to be. Many of those surveyed expressed frustration with the sheer effort and complexity of it. “To build my business, simplicity is key”, one respondent said. “But moving offices is anything but simple.”
Beyond finding an office – it’s not uncommon to look at 50+ locations before locating the right one; one of our interviewees visited over 80 locations before finding the perfect office – a small business has to find lawyers to ensure the rental agreement complies with all regulation, and to review any relevant documentation. Traditional property leases are long, detailed documents. Accordingly, you’ll need lawyers just to make sense of it and manage the whole process. Be prepared: there’s often a lot of back and forth which will cost you time and money – on a property big enough for 20 people, lawyers’ fees alone can cost thousands.
There’s far more to it than legal fees, though. The council needs to be paid, the square footage needs to be right, the service charges need to be taken care of – and all before you’ve even moved in.
- Equipping your office
Co-working spaces have their own frustrations – sharing, for example – but they also incorporate more value-adds into the monthly rent. For example, you never have to think about furniture, equipment, or repairs.
Private rentals aren’t quite so simple. One media business in London, for example, spent £25,000 on new office furniture and equipment – as well as refurbishing the space to make it presentable for employees and candidates alike.
What’s more, it doesn’t end once you’ve secured the right furniture. Ongoing management and maintenance – alongside bills – can cost you several thousand pounds every year. One SME we spoke to had to account for the following costs for an 1800 square foot private office in central London:
- £12,000 p/a on maintenance
- £3,000 p/a on cleaning
- £2,000 p/a for electricity and water
- £2,000p/a for yearly office insurance
And not forgetting a part-time office manager with a salary between £20,000 – £30,000 on top of that.
If you’re a CEO, of course, you almost certainly don’t want to take care of it yourself. But our survey revealed that many do. Interviews contained several accounts of executives and other high-ranking team-members conducting or organising repairs.
Many cited issues with unreliable internet, broken air conditioners, and faulty dishwashers. While employees often won’t have the knowledge to fix these things themselves, the process of securing expert help can detract from operational or business considerations.
And this is the ultimate problem with many office environments. Businesses need spaces where their employees can focus on the things that really matter – but too often, they end up needlessly sacrificing time and money just to get up and running.
If you’re looking for an office environment, it pays to do so thoughtfully. How much does an office cost? It varies – but be prepared to commit a lot of time and money to finding and managing your private lease.
Finding an office doesn’t have to cost excessive amounts of time and money. To find out how you can take the stress out of securing a suitable office space, talk to one of Storey’s expert consultants about your unique workspace needs.