It was just 10 years ago that “office space” was a huge consideration factor for new business owners. Pre-pandemic, we began to see a slow shift towards remote working and were given community workspaces for small business owners to launch and run their businesses. Community offices, or coworking spaces like WeWork and The Gathering Spot spaces evolved over the years, offering small business owners a place to work privately or network with like minds. Post-pandemic, businesses – small and big – have shifted the way we work, allowing employees options to work remotely. Today’s social marketplace has created numerous opportunities for businesses to operate virtually, cutting back on the need to lease or buy office space to operate.
While home-based businesses were already on the rise, the pandemic impacted this percentage significantly, and in 2022, statistics revealed over 50% of small businesses operated at a home-based operation. According to the SBA, failure rates for home-based businesses has seen a decline, reaching 20% in the last 12 months, largely attributed to low start-up costs.
Despite these important factors, many businesses opt to move to an office space for various reasons. In some cases, the nature of the business responds well to a brick-and-mortar environment, like retail, for instance. However, there are other instances where an office space makes sense for the team environment the business owner is seeking to create. When trying to determine if your business needs an office space, there are some considerations to ponder.
Is the Cost Worth It?
No doubt, an office space will considerably raise the operational costs of your business, so you need to ask yourself is this cost worth it. What are the primary benefits you will receive because of investing in this space? Will it create a higher level of productivity among your employees? If so, is this measurable so you can see your ROI (return on investment)?
First, you’ll need to determine exactly how much space you will need to accommodate the needs of your business. Start with evaluating your workforce. How many employees do you have and how much space do you need to allot per employee? Do you plan to set up individual office spaces or will you opt for a open workspace? Additionally, you’ll want to leave room for your team to grow. For example, if you have a team of 20, you don’t want to choose a space that can just accommodate 20 employees. Rather, you want to plan for team growth over the next few years to eliminate having to move one year after you sign your lease. All in all, remember to plan ahead.
Consider your Employee or Team Environment.
Not every employee is built to work from home. Many feel the need to travel to an office every day to separate business and personal space. Take inventory of your employees to see what environment they thrive in the most. It is also possible the team culture you are building could excel when you have team members in the same room collaborating and sharing ideas. While this is certainly possible virtually, the dynamic in person is different and could create a different outcome.
Consider Co-working Spaces.
If you have a relatively small team but still need a space to work, co-working may be an affordable option to consider. Co-working spaces offer several options for small business owners to consider from open workspace to small office spaces where you can accommodate your team. Additionally, you are often provided with a reception area and community conference room without the added cost of running a full office on your own.
Purchase a Space that Fits your Needs.
After taking these factors in consideration, you may decide you still need to invest in a full office space for several reasons. Perhaps your team has scaled beyond the size of your current office accommodations and now you need to consider something larger. Or, if your team is working from home, purchasing an office space may no longer make sense for your business model. How do you evaluate office spaces to make sure it’s the right fit for your business and ensure you’re not overpaying?
Location is Key.
Next, you need to determine where your office space will be. It is ideal to choose a location convenient to your employees and your customers, but you also want to consider the cost of real estate based on your choice. Once you’ve determined the amount of space you need, evaluate the cost per square foot as you review your options. It could make sense to choose a location slightly further away if you are getting more bang for your buck in square footage.
Equally important, include things like the layout of the space. Is it conducive to your business model? You also want to make sure you feel comfortable with the landlord and other tenants as this can also affect the flow of your business.
When making a big decision like investing in an office space, you should consider consulting with a business partner that can walk you through the process, weighing on the pros and cons to make the transition as smooth as possible. VAAS Professionals has been working with small business owners for over 20 years and would be happy to lock arms with you as you evaluate the next stage in your business growth.