Bursting at the Seams? Tips for Expanding Your Startup's Office Space Signing an office lease may be the first and largest long-term commitment you make with your business. Here's what to consider before signing on the dotted line.

By Matthew Toren

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As a startup, you may be operating out of your garage or basement, or some space that you leased primarily on the basis of how cheap it was. Once your business starts to grow, your next move may be a bit trickier.

Depending upon your type of business, you may want a space that sends a message about your company, that will bring in foot traffic or that will provide room for expansion. No matter what your broader goals may be, here are a few criteria to consider:

Location: Is it important to be close to the airport, in a retail center or in an industrial area? Take the time to determine what part of your community would work best for you. Or, should you be looking for a new community, recognize also that some areas are going to be more expensive than others and factor that into the equation.

Space: If you're going to sign a one or two-year lease, you need to make sure you have the space you need to expand. Consider renting industrial space, which is much less expensive per square foot than regular office space. If possible, build in space to at least double in size. If not, take a hard look at your business plan and figure on needing space for at least 60 percent of those additional workers you have scheduled.

Budget: It may be tempting to jump at one of those classy high-rise places filled with glass and a large marble-floored lobby, but keep your head. Every penny you spend on overhead is taken out of the other areas that lead to business growth. Unless you seriously think that a prime location will help your business gain more customers or clients, choose something more reasonable. If it helps, understand that even some Fortune 500 companies have found that the price of a fancy office building comes with a real hit to profits.

Be sure to check on all those budget extras too. Are you responsible for utilities? What about cleaning services? Who will pay for fixing up the space to your specifications? These are all part of your lease negotiations. Do your homework on these areas so that you know what's standard for commercial leases in your community.

Amenities: This includes such basics as security and parking. Also make sure you have easy access to high-speed Internet connections and the level of electrical capability needed to run your operation. These questions are particularly important in an older building. Do you have control over the temperature in your office? How old is the HVAC (Heating, Ventilation and Air Conditioning) system in the building and how well does it work? Talk to other tenants to get insight on this.

Other amenities may not seem as critical but have real value in a workspace. Do you have plenty of windows? Is there space for a fridge and microwave at least and some tables for people who want to eat in? How is the lighting? Have you included space for office supply storage and a copier and possibly a large high-speed printer? Do you have enough meeting space for both informal gatherings and more formal meetings or training sessions? This is a good area to ask for ideas from your team.

Outside Amenities: Are there some decent restaurants close to the office? How about a take-out deli with good sandwiches? What is traffic like in the area? Are there any nice outside areas to take a break, a walk or a smoke? Will your employees feel safe entering and leaving your office, even late at night? Are there some good child-care places in easy reach of the office?

Flexibility: As your company grows and changes, can you move walls and corridors so that you can add or modify workspaces as needed? If you suddenly hit a growth spurt, are you in an area where it's fairly easy to find empty commercial space nearby? What issues would you face if you needed to move to a much larger space and walk out on your lease early? On the other hand, would your lease allow you to sublet some space if your office-space estimates exceed your immediate needs?

What other factors would you suggest adding to this list? Let us know which ones and why in the comments section below.

Matthew Toren

Serial Entrepreneur, Mentor and co-founder of YoungEntrepreneur.com

Matthew Toren is a serial entrepreneur, mentor, investor and co-founder of YoungEntrepreneur.com. He is co-author, with his brother Adam, of Kidpreneurs and Small Business, BIG Vision: Lessons on How to Dominate Your Market from Self-Made Entrepreneurs Who Did it Right (Wiley). He's based in Vancouver, B.C.

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