Why You Should Think Twice Before Getting Office Space
Let's talk about some much cheaper alternatives.
For some entrepreneurs, working without an office space is unthinkable. And that's understandable because for them, an office space is synonymous with work -- and it may boost their productivity too.
Nowadays, outlandish office perks -- ranging from gyms to restaurants -- are the norm, and a desire to fit in with changing times influences some entrepreneurs into getting office space they don't need. Peer pressure aside, some may feel they're not really running a business if they have no physical office. Is that the case? Of course not.
If you're on the verge of renting office space, here are reasons you may reconsider such plans.
1. Remote work is also trending.
While the office perks mentioned earlier (and more) are trending in the startup space, working remotely, a viable alternative to renting an office, is in vogue too. According to a Gallup poll, the number of people working four or five days a week rose from 24 percent in 2012 to 31 percent in 2016. Gallup's State of the American Workplace Report also shows that 43 percent of Americans spent at least some time working remotely in 2016, a four percent increase from 2012.
Following the crowd isn't always the best idea, so forget for a moment the numbers on how popular remote work has become. Remote work also has several benefits including boosting productivity, increasing efficiency, reducing operating costs (like costs of office rent) and improving employee engagement.
What's more, allowing remote work gives you access to talents from all over the world, talents you wouldn't get otherwise, and sometimes at cheaper rates. One field that can benefit from this is the Blockchain technology sector, where local professionals may be difficult to find or too expensive, and companies often have to look overseas for talent.
Showy office perks are cool and trendy. But so is remote work. And the latter could be just what you need.
2. You're in debt.
According to a study by the National Association of Realtors, student loan debt stops 40 percent of people from even starting a business. For others who are in debt but manage to start a low-cost business, they need to constantly watch their spending so that they can avoid getting into more debt or swiftly pay off old debt.
If you're in debt, a physical office is definitely an unnecessary expense. Your focus should be on paying off your debt first. It's necessary because let's face it, not every entrepreneur is great at money management. And when you're in debt, spending money on an office is frivolous.
3. The costs can strain your budget.
Alluring office perks are not the only extras you'll spend money on if you're planning to rent a new office space.
First, you need to remember that there are several kinds of offices, from the complete office where everything you'll need to run your business is included, to an office where you'll buy your own furniture and pay for other utilities. Obviously, the former is usually more expensive, but you will likely spend more on the latter depending on what you need to set up your office.
Still, aside from costs based on the type of office you're renting, there's the cost of decorating it for maximum productivity. Psychologists reckon that the colors used for decorating offices trigger different moods in employees. The end goal is that your office shouldn't be too drab to inspire you or your employees creatively. Because there's a thin line between an office that's inspiring for work and one that's too distracting to allow any sort of focus.
Nevertheless, even without all these extras, renting an office can already be too expensive for you. The money can be better used to solve other problems in your business.
4. Outsourcing is an option.
I mentioned this briefly earlier, but it deserves its own blurb. There are many benefits of outsourcing, including, but not limited to, saving on office space, higher efficiency, access to skilled workers and lower overhead costs.
Nevertheless, you'll need to weigh this carefully.
Are the operations you're planning to outsource a core part of your product or service offerings? Will it require purchasing additional equipment before it is done successfully? What are the cost implications of having someone do it in-house versus outsourcing it?
While you're considering the potential advantages, consider the drawbacks side-by-side. Issues like revealing confidential information about your business, loss of control in the business' procedures or communication problems can rear their ugly heads when you outsource work. Can you deal with such difficulties? Is the stress of getting and setting up an office greater than the stress of dealing with or managing outsourced workers?
The size of the global outsourcing industry is huge at $88.9B, but it may not be the solution to your need of office space. Or it could be. You'll decide.
5. There are other alternatives.
If you're working from home already and contemplating getting office space, there are other options you've probably not examined.
Co-working spaces can eliminate the need for a traditional office. They are affordable and you pay monthly membership fees to use them. Depending on how much you're paying or available offices in your area, you may get access to a conference room too if you're building your startup and need to meet regularly with your employees.
If you operate your business in an area where there are small-business incubators, you can apply to one to enable you set up office space for your startup at discounted rates. The downsides here include limited or no availability of incubators in your area, undergoing a tedious application process to be accepted in an incubator and restriction of available incubators to certain industries. Additionally, though leasing arrangements with small business incubators may not be as expensive as getting office space, they're often pricier than membership fees for a co-working space.
After all considerations, if you eventually decide you need office space, you're not limited to a traditional office, but can benefit from using a co-working space or leasing from a small business incubator at cheaper rates.
There are substitutes to office space.
Don't spend a fortune renting an office when you can do without one at least for a while or maybe until you're more profitable. And if you're profitable, you can still save money by examining other alternatives discussed here. Whatever your final decision, choose an option that suits your needs or the needs of your business.
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