Don’t sublet Office Space, choose a Business center!
During the past few months, we have seen a huge increase in the amount of companies in the US opting for sublet office space. Subletting office space is very often seen as an affordable way to find some well located office space at reduced rental prices. But as a subletting tenant, you are at the behest of your over-landlord. They will be paying a higher rent than you, but they must still be able to meet this rent otherwise you will face default and then possible eviction. Therefore your office can be placed at risk, as your destiny is in the hands of another company’s fortunes.
Another problem with subletting office space is that it is not scalable. How do you know what size your business will be in 1 or 5 years time, especially at times of recession. If you take too much space you will be over paying for unused space as well as the associated costs such as cleaning, maintenance and utility costs. If you don’t take enough office space, you will either have to sublet your space to someone else, requiring more time, effort and legal advice.
Sublets often mean that you will have to organise your own furniture and IT equipment. You may even need to pay for an entire fit out. If you take over what someone else has installed already, you will have to pay the maintenance charges on that. It can prove quite expensive to organise a sublet as well and you will need approval from the overlord. If you have an issue with maintenance or repairs you cannot approach the over-landlord directly.
There is, however, another option for companies thinking opting for a sublease – a business center (also known as a serviced office.) The serviced office market is still only a tiny fraction of overall office space in the US but it is rising fast. There are many benefits to be had from choosing a business center, but the main one is the flexibility on offer. You only need to sign a one page agreement and possibly put down a small deposit (usually one months rent). After that you can move in, with no legal wrangling. You can also let space on much shorter periods, either monthly or every three months.
A serviced office will be furnished and have IT equipment already installed such as a fax machine or photocopier. It will also have reception staff, meaning you can simply move in and get down to business. Someone will be able to manage your calls and incoming mail. Business centers in the US are used by established corporates as well as start up companies. And they are not just a short term solution, they can be used for long periods as well. You may see the cost per workstation for a business center and think that it is expensive compared to the cost of leasing conventional office space. However, because all of your monthly bills are included, in many instances it works out cheaper. Moreover, you will not have to employ someone to administer monthly bills or work as a receptionist. You can get a, office in a prime location for a fraction of the cost what it would cost you to find an office there by yourself. Some of the great benefits include CAT 6 cabling, video conferencing, telepresence suites, kitchens, breakout areas, and meeting rooms.
By not having to employ your own administrative or maintenance staff you are free to get on with running your business. You won’t have to deal with tedious tasks such as invoicing, staff holidays and recruitment as these kind tasks are done by the center manager on behalf of all the tenants. You also have the option to meet and liaise with other local companies.
So if you are considering moving office, do a comparison between a traditional lease agreement and a serviced office agreement. When you compare ALL costs (both fixed and variable) as well as the amount of time it would take to administer them, you will often find (particularly if you are a small company or start up) that the business center will save you time and money!