There's nothing more exciting – and fast moving – than a growing business, but moving into a leased office space requires careful consideration to avoid sliding into debt and hobbling your business just as it's taking off.
Every business is unique, but renting creative office space and tailoring it to your needs can be costly, so consider all your options.
Sometimes VC, local government or charity support is available for transitional spaces like Tech Hub. Otherwise, flexible solutions can work: for example, deciding to office share, or simply hiring office space for client meetings on a day-by-day basis.
Converting "creative" or unusual spaces to fit your business may be the best solution, but make sure you obtain quotes and calculate costs before commissioning big conversion works.
Commercial landlords will attempt to protect themselves against the changeable nature of start-up tenants. This means that when you're looking at contracts, it's vital to check terms.
Full service leases can include things like water and electricity, though most will exclude phone and internet charges. Other leases may require to tenants to pay electricity charges, maintenance costs and other additional fees on top of the base rent. These are known as a net lease or, in extreme cases where most liability is transferred to the tenant, Triple Net, bondable or Triple N leases.
Don't get sucked in by low base rent, and ensure you do all projections and calculations before committing.
Plan for the future
It's tempting to sign up for long leases or make expensive modifications to bag the perfect space, but if your business grows or changes you could face problems. If projecting your business growth proves difficult or impossible, it may be wise to stick with a short-term lease.
On the flip side, start-ups must still be ready for rapid growth. Investigate whether you need planning permission to make changes to the office space, and consider requesting first refusal on any new space in your building as part of your contract.
If you do struggle with your lease, it's always best to address the issue as soon as possible. Debt problems can usually be solved by early discussion and agreement on affordable solutions.
For more debt advice, speak to a Dukes Bailiffs advisor via our Contact Us page today.