You can be on Entrepreneur’s cover!

Does Your Startup Really Need a Private Office Space? 5 Questions to Ask First. Is office space a necessity for your growing company? Or, is it just an ego boost?

By Sujan Patel

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.


Launching a startup can be exciting, and an increasing number of Americans are doing just that: According to the Global Entrepreneurship Monitor, two-thirds of Americans consider entrepreneurship a good career move; and the result is that today there are more than 27 million entrepreneurs running or starting new businesses.

Related: 6 Office Space Ideas for the Frugal Entrepreneur

These entrepreneurs are working from home, cafés, shared workspaces, basements and garages. Others are taking the plunge, either buying or leasing commercial office space to give their startups credibility and authenticity.

But is that a smart move early on for a new business? The answer may be "no." So, if you're considering leasing private office space, curb your enthusiasm and excitement long enough to ask yourself these five questions.

1. What is the cost?

When you're considering leasing office space, the one number that stands out the most is the cost per square foot per month. That's the bare minimum monthly obligation you'll be paying for private office space. But there are other costs to consider here, as well:

  • Insurance to cover your business assets
  • Liability insurance
  • Supplies
  • Electronics
  • Furniture and decór
  • Utilities (internet, electricity, water, waste removal, alarm service, etc.)
  • Maintenance fees that a property owner or management company may apply

The overall message is to factor in the total overhead that comes with leasing a private office space, in order to maintain a healthy margin on your product/service. This is especially important if you expect to need to raise more capital in the near future.

"It's almost always harder to raise capital than you thought it would be, and it always takes longer," says Richard Harroch, managing director at VantagePoint. "So, plan for that."

2. What does your growth-projection look like?

The length of a lease for private office space can vary dramatically from short term (three to six months) to long term (three to five years). Commercial property owners may not want businesses cycling in and out quickly, as that can create a negative perception of the property.

Think about how your business is expected to grow when considering private office space. In the early phases of a startup, your growth could come in fits and starts -- or be explosive. In any case, you're likely to add people.

If you're certain that private office space is necessary, think carefully about how much space you need, based on your projections. You don't want to be locked into a commercial lease with zero room for growth and expansion.

Related: Ready for a Legit Office Space? Think About These 4 Things Before Starting Your Search.

3. Will private office space bring value or contribute to revenue generation?

I encourage founders and entrepreneurs to consider their spending carefully. Simply put, if an expenditure doesn't contribute to revenue generation, you probably don't need it.

Will your business model benefit from private space? Will it improve the efficiency of workflows at your startup, the team dynamic or the client experience?

Commercial office space can definitely lend trust and authority to a startup in the eye of the public, investors and clients; but ask yourself if it's absolutely necessary at this current time in your startup phase. Do you just need it to add "flash" to your business or boost your ego?

As Tony Hsieh, CEO of Zappos, cautions in his book Delivering Happiness. "Don't be cocky, don't be flashy. There's always someone better than you."

4. Is privacy important to your business?

Every business needs a certain level of privacy as it operates. You're dealing with client records, phone calls and personal employee information, among other things.

Office space allows private meetings with clients that may enhance their comfort level, as opposed to meetings in a public place.

Office space can also ensure that any records you keep, both hard copy and electronic, are secured from outside tampering, theft or loss. But if such security isn't that serious a concern, ask yourself if your startup can operate in a less-private (but still commercial) setting, like a shared or coworking environment.

5. How will office space impact your existing workflow?

Moving into a private office space and bringing your team in-house is going to change the dynamic of how your team members work together. It will also shift how individual employees get work done, make their reports, drop deliverables and communicate with one another.

That's not necessarily a bad thing. There's a lot of benefit to finally bringing your team together under one roof. You need to consider how a shift to an office space will impact your workflow, however, and plan accordingly.

This way, the transition happens in your favor, reducing the number of stumbles and errors during your startup phase, as everyone learns to work in a much closer environment.

Related: 9 Reasons Your Startup Really Does Need Office Space

If you know private office space is a must, also think about how the search for office space will impact your workflow and progress. Don't treat it like a search for a dream home. Ask yourself what you need to have, to function and grow, and then make your choice.

Sujan Patel

Entrepreneur and Marketer, Co-founder of Web Profits

In his 14-plus years as a marketer and entrepreneur, Sujan Patel has helped hundreds of companies boost online traffic and sales and strengthen their online brand reputation. Patel is the co-founder of Web Profits and Mailshake.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Resumes & Interviewing

Build a Better Resume with This $35 Subscription

AI Resume Builder promises to help you apply to jobs twice as fast.

Side Hustle

He Took His Side Hustle Full-Time After Being Laid Off From Meta in 2023 — Now He Earns About $200,000 a Year: 'Sweet, Sweet Irony'

When Scott Goodfriend moved from Los Angeles to New York City, he became "obsessed" with the city's culinary offerings — and saw a business opportunity.


I Got Over 225,000 Views in Just 3 Months With Short-Form Video — Here's Why It's the New Era of Marketing

Thanks to our new short-form video content strategy, we've amassed over 225,000 video views in just three months. Learn how to increase brand awareness through short-form video content.

Business News

Samsung Makes 6 Day Workweeks Mandatory for Executives as the Company Enters 'Emergency Mode'

Samsung said its performance "fell short of expectations" last year. Now executives are required to work weekends.


6 Habits That Help Successful People Maximize Their Time

There aren't enough hours in the day, but these tips will make them feel slightly more productive.


You Won't Have a Strong Leadership Presence Until You Master These 5 Attributes

If you are a poor leader internally, you will be a poor leader externally.