Leasing office space is a big step towards establishing your business. By having office space, you are providing potential customers with a physical location to visit. Knowing what you are looking for in potential office space is very important as you begin shopping around and researching how to lease office space.
Step:-1 Making Plans
Figure out how much space you will need. Considering your business’s needs, figure out roughly how big of an office you need. This will narrow down where to look when you’re exploring your leasing options. Obviously, you need a rough sense of the number of offices you need. Also consider the type of work you’ll be doing and how much of it occurs in the office itself. Some activities might require a large amount of personal space while others can be conducted in a smaller cubicle. Do not forget to consider conference rooms and other places to conduct meetings. Consider whether clients will be visiting the office; if not, you’ll have a lower cost for fewer amenities. Be realistic when considering space. It’s not a good idea to rent more space than you need. A larger amount of your limited resources will go into paying rent and you don’t want to pay for unused space. If you anticipate expansion, a solid floor plan can help create a roomy environment even with limited floor space. You can also work something out in the lease that allows for expansion or relocation if your business begins to grow
Make a budget. You can’t begin the process of leasing an office space without first creating a budget. In order to find listings in your price range, you need a solid sense of what that price range is.
Select an area. You should narrow your search to a specific area that works for you and your employees. Have an area chosen before you begin looking through listings. There are three factors to consider when selecting location – your clients, your employees and the price. Make sure you select a place that is easily accessible to potential clients, does not inconvenience anyone working for you, and is still within your price range. Customer convenience and traffic patterns should be your biggest concern, as customers bring revenue. Find an area that’s easy to get to driving or via public transportation and that’s not off the beaten path or difficult to locate. Make sure you find a relatively safe neighborhood with a low crime rate.
STEP:-2 Finding Your Space
Familiarize yourself with different classes of office. Buildings are broken down into a class system related to their quality. A building’s class designation can give you some idea of whether or not you would consider renting that space.
.Find available spaces to rent. Now that you have a sense of what you’re looking for, you can begin searching for office space. There are a few different routes you can take to locate property. You can go through a broker in your area to find office space. A broker has invaluable expertise and may be able to find spaces for rent before they’re officially put on the market. A experienced broker will know the area well and be able to give you informed advice on the best places to rent, as well as representing you when it’s time to make the transaction. Brokers work on commission; once they help you secure a space, you pay them a fee.
Tour spaces and work on narrowing down possibilities. You can now begin the process of touring spaces and narrowing down your search to make a selection. Make a list of pros and cons of each space, considering a number of factors. How far away is the space from public transportation? Is there a lot going on around the area? Is it safe? Is the building in good quality?
STEP-3:- Signing a Lease
Consider certain factors when signing a lease. Make sure you know the different terms of a lease and how certain factors affect you as a renter. You should never sign anything without fully understanding the terms. Pricing models vary from lease to lease. With a Triple Net lease, you pay a lower rate to the landlord for rent and pay additional expenses separately. With a gross lease rate, all operating expenses are including in monthly rent. A modified gross rate falls in the middle of these two. Some expenses, like those for shared building commodities, are not the tenant’s responsibility but you do have to pay for any utilities you use. Pay attention to sections regarding maintenance, cleaning and trash removal. Make sure you understand what types of repairs you are financially responsible for and what types your landlord will take care of. Maintenance is one of the number one causes of disputes between landlords and tenants and you want to avoid misunderstanding. Pay attention to anything regarding the landlord’s right to break the lease. Know what conditions give the landlord the right to ask you to move your business elsewhere. Also, know what your landlord’s liability is in the event of building issues that affect your business.
Negotiate your lease. Landlords are very eager to earn profit from tenants and may ask for more than a space is truly worth. Always negotiate a lease and do not settle for the advertised price. Mainly, you should aim to negotiate a limit for rent increases. If your business is successful, you may want to stay in the same area long term. Give it time. Negotiating with a landlord can take weeks and people often panic and settle for less. Allow yourself adequate time to make sure all your needs will be met by the building before signing a lease.
Take proper precautions against worst case scenarios. Even if you’re a responsible business owner, extenuating circumstances can sometimes cause misfortune. Always be prepared for the worst when signing a lease .Be careful when signing a personal guarantee. This is a document that assures, even in the event of a business collapse, you are personally liable for rent payments. Make sure the terms of your personal guarantee are fair and be sure that personal guarantees can be discharged in a personal bankruptcy. Also add language protecting you if the landlord goes bankrupt or fails to meet lease commitments. Make sure you have the right to assign the lease to someone else or sublet the space. In the event of business failure, you will not need to pay the rent in full yourself. Also, in the event you want to relocate this can minimize the costs.
Prepare for best case scenarios. Unforeseen circumstances are not always a bad thing. Your business could grow quicker than expected and you might outgrow the buildings needs before the lease terminates. In addition to preparing for the worst, prepare for the best. Make sure there is a relocation/expansion clause in your lease. This should give you the right to terminate the agreements made in the lease in the event your business needs to relocate. Specifics vary and these can be negotiated between you and the landlord. A right of first refusal gives you the right to claim adjacent spaces before they are lent to different tenants. The landlord will have to inform you if he is renting to someone else and you have the right to request that space for yourself.