The right premises can boost staff morale and make your business easier and more productive to run. Get it wrong and you can be locked into expensive overheads that drag down your operations.
The rental market has got a lot more complex today, with the growth of serviced and managed office accommodation. This sector, which rents out fully or part-serviced workstations on short-term contracts, is still relatively small – estimates vary from 3-7% of the total commercial property market – but it is expanding fast, creating more options for small and growing businesses. So how do you find your way around the market to get the offices you want at the right price?
Location, location, location
The first steps are up to you. It’s a much overworked observation, but in the property market location is absolutely crucial. Get this wrong and the only way to correct the mistake is to move again.
Be clear about where you want your new office to be and why – city centre or out-of-town business park – and how it will work with your business strategy. Even if you’ve done this a few times already, start from scratch because your circumstances may well have changed sufficiently.
Do you need to be near to customers or suppliers or is most of your business now conducted over the phone or internet? In addition, can you get synergy by locating in a cluster of other companies in the same sector? Once you know where you want to be and what you can afford, you can start looking for the building that will best fit the nature of your business.
Finding a property
Doing it yourself is an option, but most business leaders call in the professionals. For bigger deals – over 2,000sq ft and leases of over a year – you should certainly consider appointing a commercial agent to act for you. Independent brokers such as officebroker offer brokering services to help businesses secure the best rental deal.
“Acquiring a lease is not like buying a house,” says Chris Mulcahy, partner and head of office agency at commercial property consultants King Sturge. “The best terms need to be obtained. Commercial agents add value by their expertise in the commercial property market and by bringing in building consultancy and project management skills. Most of them are also chartered surveyors, qualified to check the specifications of new buildings to make sure they can accommodate your plans.”
Anyone can call themselves a surveyor, so insist on dealing only with members of the Royal Institution of Chartered Surveyors (RICS), if only because all RICS members carry professional indemnity insurance, so you can sue if things go wrong.
Property lawyers are also needed to help you secure a watertight lease agreement. Another option worth exploring is to approach move management consultants who handle the logistics of the move and the hunt for a location. Like commercial agents, they charge commission for acting as an intermediary between the letting agent and yourself.
But even the experts say there is no substitute for personal experience. “If you have the time, visit the area yourself to get a feel for it and talk to other occupiers,” advises David Jackson, MD of Sheffield chartered surveyors Fernie Greaves. “You’ll be surprised what you find out. You will also be able see for yourself what parking and transport links are like in the location. Visit the property in the afternoon – if it gets too much sun, it may be hard to ventilate and you could end up with a ‘sick building’ on your hands.”
Doing the maths
Cost is vital. Know your maximum – fix it and stick to it. If clients don’t come to your offices very often and a lot of your work is web-based you may not need top-of-the-range offices. In less fashionable areas, the landlord may be pleased to see you and you can drive a harder bargain. Furthermore, most buildings are now VAT registered, so VAT is payable in addition to the rental cost.
It’s a more straightforward business to shop around for serviced office accommodation, where renting office space in a business centre can be almost as simple as booking a hotel room. Contracts or licences are short-term and can usually be terminated at a month’s notice. The main providers – Regus, MWB, MLS, Executive Offices – offer predictable levels of service. And www.instant-offices.com amalgamates serviced office availability in the small and mid-size sector, representing a great place to start searching. In addition, there are also a host of niche players.
When eOffice founder and CEO Pier Paolo Mucelli started up eight years ago he felt there was a need for business centres with a more contemporary design which could offer small creative companies all the advantages of openness. “New economy small and mid-size businesses have to be involved in a whole range of activities and it may help their business if there are, for example, accountants working from the same building. By providing this mix our centres create an environment in which different types of businesses can succeed.”
It’s a more expensive option than leasing in the long term, but it offers a flexible ‘easy in, easy out’ service to small businesses in a hurry or bigger firms who want office accommodation in a particular location for the duration of a contract. To keep costs down select only the services you need.