Option To Rent Office Space: The Trend in 2012?
Owning a business takes on a lot of responsibilities, like making major decisions on whether to buy or rent office space in Shoreditch. Such decision would depend on several factors like: the amount of cash involved, prospective business growth, rate of land appreciation, and the tax angle.
Buying a property for business could entail much cash outlay that the option to rent becomes one attractive proposition for businessmen. The cash upfront needed for deposit in buy-outs, can be around 10 to 20 times higher than rental fees. For a new and upstart business, such huge investment, all paid for in cash, could have crippling effects in operations. Monies that should have been used for overhead are now funneled to fund long term investment in land and building. Capital will then be tied up to these investments, thereby creating a tightened effect on the company’s financial resources. Hence, we now see a preponderance of businesses opting to go into rent office space situations instead.
Choosing an office space can be of paramount importance to the decision-maker who would want to increase the company’s visibility to targeted markets. Choosing an area then, where there is enough foot traffic, near commuter transport, and within striking distance of prospective clientele base is a necessity. The neighborhood is also of prime consideration. When a business sells high-end products, they should also consider putting up their place of business at high-end neighborhoods.
What then are the important factors to consider in a rent office space alternative:
1. First, would be the location. As mentioned, this would ensure that potential clients can get to you easily. It should be ideally situated in a place that can easily be found even via local transportation. This would avoid unnecessary travel time for your clients thus enabling them to easily see you, before they start thinking of looking at your competitors.
2. Second, would be the general feel of the building. Try to see if the building does not show cracks or structural defects that would pose a problem later on. Basic amenities like elevators, stairways, electrical system, lighting fixtures and water sprinkling system should be properly installed and working.
3. Third, would be the neighborhood. Knowing ones’ market would determine the situs of the place of business. This would ensure that clients would not have reservations in going into the place of business to transact deals or close business negotiations.
4. Fourth, would be the cost consideration and the legalities involved. This would depend on the amount being charged on a per square foot basis. This amount is dependent on the amenities of the office space like the general feel or professional ambiance, the adequateness of the reception area and kitchen/bathroom facilities. The cost inquiries would also cover monthly overhead dues on utilities, common area cost like lighting in hallways, and payment for reception and security personnel. Inquiries should also be made regarding tiered payment structures that allow lower monthly payment on the initial year and higher monthly payments in the succeeding years. Other legal intricacies like possible late payments, and the penalties and interest charges that may go with it should also be explored and discussed thoroughly.
Despite the much lower rate for the rent office space option, there still exist another alternative, which is the virtual office. This allows a businessman to do his business in the comfort of his home but with a professional existence by having a virtual office elsewhere. The cost is a fraction of what he will normally pay for an office space. All the intricacies of business are taken care of by virtual assistants, voice mail, and answering call service in a virtual office situated in a prime business district of his choice. The users of virtual offices are a cross section of the business world: home- based entrepreneurs, accountants, law firms, sales people, mediators and many others.
The option for people to go into business is limitless. The choice to opt for a cost-friendly rent office space option is likewise, limitless.