Real Estate Decisions
Renting Office Space Do's and Don'ts
Renting office space? We've got some great advice on how to rent an office for your business.
Leased space can make or break a small business.
With the right lease your company can be equipped to reach its full potential, while the wrong lease can leave you locked into a lemon for years. You could rely on bitter experience to teach you the difference between a good lease and a bad one . . . or you could save yourself the headache and follow some simple dos and don'ts from those who have seen it all in leasing office space.
- Determine criteria. The first rule of leasing office space is to have a clear understanding of the criteria your business requires before you start looking at rental opportunities. How much space do you need? Where are your customers located? Is this space temporary or do you see your business moving again in a few years? These are all questions you need to answer before you can decide whether or not a location is capable of helping you achieve your goals.
- Set limits. The decision to lease space is a business decision. Period. By setting a predetermined limit on how much you are willing to spend, geographic range, and minimum square footage, you can eliminate the temptation to make your leasing decision for emotional reasons rather than business ones.
- Consider your alternatives. Don't settle for the first space you see. In today's market, there are plenty of choices available for savvy entrepreneurs. In some cases, you may even be able to lease more affordable space and conduct the majority of your business by phone or internet.
- Lease renewal options. Lease renewal options are a great way to secure some of the benefits of a long-term lease agreement while retaining the flexibility of a short-term contract. Although the original lease is for a short period of time, tenants have the option of renewing the lease every few years. If you're not sure how much space your business will need in five years, a lease renewal option is definitely worth considering.
- Over-commit. When looking for new space, one of the biggest mistakes business owners make is to over-commit, i.e. agree to long lease terms and large amounts of square footage to keep the cost per square foot low. This decision to save a little now often ends up having disastrous consequences farther down the road.
- Do it yourself. The real estate market is not as straightforward as it seems and it's easy to get blindsided by something that seems like a no-brainer. Even though you're the boss, enlist the opinions of others in the company to aid the decision-making process.
- Violate your lease. Once you're in, it's important to follow the rules of your lease agreement. Violations - even minor ones - could jeopardize the future of your lease, especially if you are counting on the option of renewing your lease once the current lease expires.
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