There are pros and cons to everything; including where you decide to take your office space. We have put together some positives and negatives to both eventualities to help you make your choice.
Leasehold Office Space: Pros
Control: Those who take on a leasehold contract have pretty much free reign (subject to terms) over the space they inhabit. This means they can firmly stamp their seal on the workspace, from the design and layout to the amenities and branding.
Longevity: With most leasehold office contracts running for a minimum of three years, entering into one is a statement of intent that you believe your business will be the exact size you predict and that you intend to stay in that premises/location. It also gives you the ability to make long-term decisions based on your location.
Leasehold Office Space: Cons
Initial Outlay: As well as the high start-up costs of buying the furniture and installing the telecommunications infrastructure, if there’s a problem with anything such as a leaky roof or faulty phone line, it is up to you to sort and fund these works. Many leases are provided on an ‘FRI’ basis (Full repairing and insuring) meaning any unforeseen hiccups can cause huge headaches down the line.
Hassle: In addition to potentially costing more, all of the aforementioned obstacles can significantly slow your business down. After purchasing all of your equipment and sourcing your contractors, you’ll need to wait until everything has been put in place before you can get to work. Not only is this a time delay, it can also be a logistical nightmare to arrange.
Flexibility: The flipside of having a lengthy contract is that you’ll be tied down for a number of years, regardless of how things progress commercially. That means that you’ll be unable to upgrade to a bigger space or duck out of your contract if you need to downsize. With that in mind, lease-holding might only be suitable if you’re fairly sure of your business’ constancy in the foreseeable future.
Serviced Office Space: Pros
Convenience: With all of the furniture, phone lines and general infrastructure already in place, you can often move into your new office and begin work in earnest just days after signing on the dotted line. This takes all of the hassle out of upping sticks and lets you concentrate on the importance business of making your enterprise flourish.
Flexibility: With many serviced office spaces minimal notice periods (and the vast majority rarely asking for more than three), they could be the perfect option for businesses who expect to outgrow their current environment in the coming months and years.
Cost: Whilst it may seem that your monthly expenses are larger than a lease, very often they aren’t. You are paying an all-inclusive cost for the office, business rates, utilities, flexibility, facilities and freedom to move.
Serviced Office Space: Cons
Control: When it comes to serviced office space, it’s unlikely you’ll be able to alter the design of the communal areas as they are shared with other companies. Moreover, many serviced offices share boardrooms and other amenities, limiting your freedom to customise those particular spaces.
Length of term: Although the market has changed and companies can now secure their office for more than 12 months with many providers, it is unlikely that you will obtain an initial contract for more than 24 months. That doesn’t mean you need to leave the premises after that period, it normally involves renegotiating. Some providers however do offer rolling contracts so this would be worth checking out before you make any decisions.