Investment-savvy business leaders are right to wait until a new office space is really necessary.
Office space is a huge business expense that will affect your budget for the long-term. High property costs — along with related costs like energy, supplies, furniture, and equipment — can cause cash flow crises that put entire businesses at risk.
However, as your business grows, you’ll reach a point where the costs of not having an office space begin to outweigh the costs of having one.
How will you know when you reach that point? There’s no foolproof formula. However, there are a few things that almost always make an office upgrade very worthwhile for a business.
1. You’re Building a Team
New companies with just a few employees tend to be simpler to run, and have minimal office space needs. In fact, you may not need any office at all; today’s cloud-based, digital tools make it much easier to get your work done from any internet-connected location, and a growing number of software tools enable remote teams to work together without ever seeing each other in person. (Related: The Benefits of Face-to-Face Meetings in a Digital World).
However, remote work gets more complicated with each full-time hire you make. If your plan is to eventually switch to a physical office — or upgrade to a bigger office than your existing one — it might be a good idea to find that space before or during a hiring spree. Some job candidates may prefer the benefits of a physical office or want to see where they’ll be expected to work in the near future.
Plus, you may find that conducting job interviews in coffee shops and hotel lobbies isn’t making an ideal impression on job candidates. Having your own office space can be a huge selling point if it’s designed well and reflects your company values. (Related: 3 Ways Your Reception Area Makes an Impression)
The top hires for any field often yield many times the returns of mediocre hires. That’s why getting an edge over other competing firms can be so valuable. And your office space can certainly play a role in giving you that edge. (Related: Attracting the Best Job Candidates: 4 Subtle Factors That May Tip the Scales in Your Favor)
2. You Need to Impress Clients
As your company grows, you and your staff will likely have more important, in-person meetings.
Holding these meeting in spaces where you can’t control the volume, crowd, seating arrangements, or decor isn’t ideal.
Of course, you don’t have to commit to a full lease to get private meeting space. An increasing number of apps like Breather, Peerspace or NYC-based Beewake are making it easier than ever to rent meeting space by the hour. If your goal is to come across as lean, agile, scrappy, or bootstrapped, these meeting rentals can work fine, and are certainly a step up from the local coffee shop.
But rented spaces lack the ability to completely control clients’ impressions of you and your company. With a carefully planned and designed office space, all office visitors will get a sense of what your business is all about as soon as they walk in the door. (Related: Five Ways to Style a Beautiful Reception Area) This is especially important when your product is expensive, exclusive, or upscale.
Consider how much it would be worth for your company to land even one more big client and how your office space might factor into your efforts. (Related: Impressing VIP Visitors)
3. Your Current Space Hurts Productivity
Your employees’ ability to do their work effectively may be the most important factor in your company’s success. If the working environment isn’t optimized for their productivity, your bottom line is probably suffering as a result.
Common office-related disruptions include outside noise, insufficient space, and floor plans that don’t allow for enough privacy. Also, if it’s difficult for your employees to get in and out of the office each day, or if it’s a chore to run errands or grab food, the resulting disruptions to their work day will be significant.
Morale affects productivity and retention, too, and your office space definitely affects morale. If it’s not aesthetically pleasing, clean, and clutter-free, it’s not likely to inspire your workers to do their best.
Office space plays an integral role in employee morale and productivity. #receptionistapp Click To TweetPlus, your choice of office space sends signals about your values as a company. Employees may feel undervalued with subpar offices, or notice that the choice of space make it seem like you’re not investing for long-term future growth. These things could affect employees’ willingness to keep working for your company.
If your current office space (or lack thereof) is hurting your ability to show your employees that you value them, or is hurting their ability to get work done, it’s time for an upgrade.
4. You Can Afford It
This one might seem like an obvious first step, but many business leaders skip it or rush through it in their excitement and optimism.
Remember that office space is a semi-permanent expense that can make it really hard to pay your bills if there are any problems with your projected revenue. Take a hard look at the numbers to figure out what you can afford before you commit to anything. Consult with your accountant and your staff on all the financial data before you begin your search into potential spaces. Be conservative, or there’s a good chance you’ll find yourself regretting the expense when business slows down.
There’s a number of affordable, flexible options, especially if your company is on the small side. Coworking spaces that were originally developed to meet the needs of freelancers and solopreneurs are increasingly offering enterprise packages for business use. And there are also online tools like these that can help companies find pre-furnished office spaces that may have more flexible lease terms.
Deciding when to upgrade your office can be tough, in part because getting the perfect amount of space is practically impossible. Your staff will continue to grow and shrink, and grow and shrink again. Your equipment or inventory space needs may fluctuate over the long term, too. At some points, your office will seem crowded. At others, you’ll be frustrated to find yourself paying for empty space.
However, office moves are a big job and can be very disruptive to operations. You don’t want to go through the trouble of moving only to find yourself wishing you could move again a few years later. Your best bet is to try to predict what kind of office you hope your business will need years down the road — think five or possibly even 10 — and look for an office now that could potentially meet those future needs.
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