Launching a new business is exciting, but it can also be expensive. While microbusinesses can often be started for just a few thousand dollars, most entrepreneurs will need to invest or borrow tens of thousands, if not hundreds of thousands to get things moving. And to make matters even more tense, you may not be able to generate a consistent stream of revenue in the first few years of your business’s operation.
Accordingly, most startup entrepreneurs desperately look for ways to cut costs—without sacrificing the integrity of their core products or services. One of the best areas to consider for these cost-cutting measures is office-related expenses. In costly areas like New York, office space can cost up to $14,800 per year, per employee—which is out of the question for a budget-conscious new business owner. At the same time, you need a reliable place to work.
So what options do you have to reduce your office costs?
- Use a Coworking Space
If you’re looking to find office space you can use on a consistent basis, but don’t want to pay the ridiculous costs of a full office rental, consider signing up for a coworking space. Coworking spaces generally offer flexible office spaces to many companies and freelancers simultaneously; for a small monthly fee, you’ll have access to all the fixtures of a typical office, including work stations, Wi-Fi, meeting rooms, break rooms, and if you pay a bit extra, a personal office of your own.
The best part is that coworking spaces are becoming incredibly popular. Entrepreneurship and freelancing are becoming more common, as is remote work; accordingly, demand for coworking space is increasing, and more coworking spaces are now available in major cities.
- Avoid Downtown
Universally, office space downtown is much more expensive than office space in surrounding areas. There are some major advantages to getting an office downtown, at least for some businesses; for example, you might capitalize on the foot traffic walking through the city as a source of new potential clients, or if you and your employees live downtown, you could take advantage of public transportation. However, even these benefits may not be worth the extra thousands of dollars a month you’ll be paying to occupy these spaces. Try looking for available space in a suburb or smaller city on the outskirts of the primary urban area.
- Negotiate a Better Deal
This is a perfect opportunity to take advantage of your negotiating skills. Most landlords will be willing to negotiate a deal with you; if you’re aggressive, you may be able to get much more favorable terms and a lower price for your business. If you set a firm price point, your prospective landlord may be able to make a unique offer, giving you the lower rate you want in exchange for one of the services you provide, or under certain other conditions.
- Sublet the Space
If you rent a big enough space, you may be able to sublet the space to another tenant. This is ideal if you know other entrepreneurs who are interested in starting a business, but may not be able to afford office space of their own. You can pool your money and afford a space together, getting most of the benefits of having your own office, but at a fraction of the cost.
- Go Fully Remote
Today’s technology is remarkably convenient, allowing professionals to work and communicate from practically anywhere. Accordingly, if your business doesn’t depend on face-to-face interactions, it may be possible to make your business fully remote. If it seems farfetched to you, consider there are hundreds of well-established companies that have adopted a fully remote approach, and they’re mostly doing well. There are advantages and disadvantages to this approach, of course; you’ll save tens of thousands of dollars a month on office costs, you’ll have access to a wider pool of employee candidates, and your workers will enjoy the convenience of working wherever they want. You’ll just have to account for some of the weaknesses, like possible productivity challenges, reduced opportunities for teambuilding and bonding, and communication barriers. It’s usually better to start fully remote with a small team and gradually expand; that way, you can keep a tighter control on these variables and experiment to find out what works best.
- Finding the Right Strategy
There isn’t a right or wrong way to approach the dilemma of finding reasonably priced office space for a business. It all depends on your goals, your priorities, and the nature of your industry. For some entrepreneurs, a fully remote model is ideal. For others, it comes down to negotiating a better deal on a lucrative downtown space. Think carefully about your priorities before making a final decision.
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