If you’re planning to set up your own business, you’ll have to decide where you can be at your most productive. Do you run your company from home, lease a modern office, or rent occasional office space?
If you have the funds, you could go all in and buy premises. Perhaps the flexibility of ‘hot desking’ is the solution. Before looking at the various options and the pros and cons of each one, it’s important to consider what facilities and how much workspace you actually need.
Is a central location important for meeting clients; if so, do you also need parking space? If you want an out-of-town site with workshop, how accessible is it by road and public transport? Do you need a single office with basic facilities or a large, modern workspace with excellent utilities? How much of your budget are you willing to allocate for premises?
Work from home
New businesses are often run from home for the simple reason that it’s invariably the cheapest option. In some cases, maybe it’s the only choice, at least until the business starts to make money. But what else does the home office have to offer?
- Low or near-zero overheads and you can offset various home office costs against tax.
- You don’t have the hassle or the expense of commuting to work.
- You decide your schedule, working the hours that suit or according to workflow.
- It can be easier to strike a healthy work-life balance if you’re working from home.
- You can always pay for virtual office services if you need a formal business address, mail forwarding, online receptionist and even occasional access to a meeting room for clients.
- Every day is a ‘dress-as-you-please’ day!
– It can be easier to be distracted at home, especially if you have a young family, noisy neighbours or lots going on in the street outside.
– Lack of space can be an issue, particularly if you don’t have a dedicated work area, or if you need to take on staff.
– A home office may not be the best place to meet clients due to domestic clutter, noise, and other people or pets in the house.
– Working at home can be pretty isolating as you’re cut off from the social interchange of the office.
– It can be hard to switch off from work.
Renting or leasing space
Typically, this is the second most popular choice for a workspace after the home office. So, what are the main advantages of this option for small businesses?
- It’s a real office with a credible business address and it’s got your name on the door!
- Small, medium or large – you can find the workspace you need at the price you can afford. This may include co-working office space.
- You can maximise the space available by hot-desking, so employees don’t need a dedicated desk but can work from anywhere within the workspace, or wherever they have a connection.
- You pay a fixed monthly fee for the duration of the agreement. Fees for serviced workspace can include internet, utilities and other services such as reception, meeting rooms, office cleaning, parking spaces and building maintenance.
- Working alongside other enterprises in the building or area can facilitate networking, boost creativity, and promote camaraderie.
– The terms of your lease may not give you the flexibility you need to scale up or down if required.
– Your rent may go up when the lease expires or may not be renewed.
– You may be limited to what you can do to change or upgrade the office interior.
– Rental is fixed, regardless of how well the business is doing.
– Parking space may not be readily available nearby or is too expensive for staff.
Not many start-ups can afford to buy premises to launch their businesses, but this option definitely has some clear advantages.
- You are investing in a property that is an asset and may increase in value over time.
- Taking out a commercial mortgage is likely to cost less than paying rent for office space in the long run and you can manage costs by opting for a fixed rate mortgage. You can also claim a tax reduction on a commercial mortgage.
- You can let out space to help off-set your costs and/or bring in some additional income.
- You can get the workspace looking the way you want it, including décor, branding and signage.
- You can create an interior space that staff will love.
– Buying a workspace is a big financial commitment, especially for new businesses.
– You may need to put down a large deposit to get a commercial mortgage.
– You are responsible for furnishings and facilities, building maintenance, insurance, health and safety, security and more.
– If you need to relocate, you’ll probably have to sell the property before you can move on.