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10 Questions to Ask Yourself Before Choosing an Office Space

Choosing office space can be very challenging because your decision can have so many repercussions.

Lisa Girard

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The wrong location, for example, could cost you employees or clients. What’s more, you have to base your choice on your company’s future needs, not just your current situation.

Given that landlords prefer lease terms of three to five years, entrepreneurs should consider these questions carefully before signing on the dotted line:

Is there room for my company to grow? Any company must consider not only its immediate needs, but also growth and other factors that could change space requirements over the course of the lease.

If you can’t afford to take extra space to give you room to grow, try to negotiate a shorter lease term or add language to the lease that gives you the first right of negotiation on any adjacent space that becomes vacant, says Julie Clark, a broker with Commercial Space Advisors in Seattle and founder of SharedBusinessSpace.com, a national online directory.

Is it the right location for my key employees? Consider where your key employees live and whether the space is convenient for them. A long, expensive commute may push them to seek employment elsewhere. “When considering a move, you might want to let your key staff weigh in so you don’t risk losing them,” says Peter Riguardi, president of New York operations for Jones Lang LaSalle, a commercial real estate firm.

Is the location convenient for clients? You also want your office to be accessible to clients, as transportation costs continue to rise and people may not be as willing to travel to patronise your business. If you leave an urban location for a cheaper space in the suburbs, consider whether the lower expenses will make up for the possible loss of clients.

Even in the age of video conferencing and Skype, it’s important that face-to-face meetings be manageable, Riguardi says.

Does this office send the right signal? Think about the signal you want to send when you pick your location. Your office space will be much more than a collection of cubicles; it also will be a sign to others of how much money you’re making. “I’ve seen companies spend for a lavish space they’re very proud of.

They invite clients to see it, and the clients wonder if they’re paying them too much for their services,” Riguardi says. On the other hand, if you don’t spend enough, people may wonder about the financial health of your company.

Are there hidden costs I’m not considering? Calculate the full cost of the space–rent, utilities, construction costs, moving expenses, and other costs that may not be obvious. Because there can be hidden expenses, Riguardi recommends hiring a professional broker to help you understand your total outlay.

“You have to look at the costs associated with the move, even restoration of the space you’re moving from,” he says

What is the parking situation? It’s important to consider the amount of parking available at your proposed location, as well as the potential cost to employees and customers. If parking is tight, is there a place where employees can park so customers get the most convenient spaces?

Negotiating special employee rates and validating customers’ parking tickets are good ideas, but they need to be worked into your budget, Clark says. “If it is difficult and costly for your employees or customers to park, they might not be your employees or customers for as long as you would like.”

Is the office ADA compliant? Before choosing a building, make sure the landlord is responsible for compliance with the Americans with Disabilities Act, says Jason Hughes, president of Hughes Marino, a tenant representation company in San Diego.

“This could be an enormous cost. Why gamble?” For example, the law states that doors to office suites should be at least 32 inches wide and require fewer than five pounds of force to open, while carpeting in areas open to the public must be secured to the floor with a pile of less than half an inch.

Would I consider sharing an office? Sharing space with another company saves money not only on the office rent, but also on the cost of common areas like kitchens and bathrooms, Clark says. For referral purposes, it’s ideal to share with complementary businesses, such as an architect with a builder or a PR firm with a Web designer.

There should be a formal agreement between tenants, even if it’s month to month. Also, “if it is a good fit for you, you want to make sure the lease on the space you’re sharing isn’t going to expire anytime soon,” Clark says.

What if I sell my company during the course of the lease? If you hope to sell your company, make sure the lease is clear about owner responsibility, Hughes says. Many leases force the original company and its owners to have liability in the future should the future tenant not perform.

“There’s nothing happy about selling your company only to find out two years later that the buyer hasn’t paid the lease payments and now the landlord is coming after you for unpaid rent,” Hughes says.

How secure are the lease and rental rate? The last thing you want is to get established in a space, then find at the end of your lease that your landlord is renting the space to someone else or jacking the rent way up. Clark suggests negotiating language into the initial lease that gives you the option to renew.

Although rental rates are usually negotiated at the time of renewal, you also can try in the original contract to cap any increase at no more than 5 percent. “Real estate is rebounding in many areas, which means rental rates are rising,” Clark says. “If you can control how much, it’s a stick in your court.”

Lisa Girard is a freelance writer who covers topics as diverse as golf fashion, health and beauty, the hardware industry and small business interests. She also has been Senior Apparel Editor for PGA Magazine for more than a decade. Lisa lives in New Jersey with her four children and two dogs.

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1 Comment

  1. Zulkharnine Sultana

    Apr 14, 2013 at 06:48

    ALL THE 10 QUESTIONS ARE GOOD TO CHOOSE OFFICE SPACE BUT ENTREPRENEUR WOULD BE NEGLIGIBLE TO 2,3 QUESTIONS IT LEADS TO PROBLEM CREATING ITS OWN

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Innovation

Why Smart Business Growth Means Smart IT Budgeting

(…And how to do it)

Colin Thornton

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For any business today, no matter its size or sector, getting the IT budget right has become a critical part of success and sustainability.  The difference between a three-device network and a fifty-device network has significant ramifications for your IT spend and your overall budget outlook.

Let’s take a closer look at several potential costs and how to plan for them…

Network: The driving force

Essentially, the network is the backbone/core of your IT infrastructure. It needs to be reliable, fast and efficient. Often, a young and growing business will have a piecemeal network in place, bolting on new sections over time. This can lead to the network becoming inefficient and slow.

The important thing to note is that when you have reached capacity on your current network, is it’s sometimes better to start from scratch and also leave room for expansion down the line (rather than adding to the existing network as a quick fix).

While it may appear more costly (and scary), the end result is a reliable network that you won’t have to worry about revamping for many years.

Related: How Dial A Nerd Managed To Dial Up Profits

Licensing: Pricey but critical

Software licensing often comes as an unexpected (and unpleasant) cost to many business owners and their financial teams. Indeed, purchasing legal software can be pricey if you aren’t prepared for it (and don’t understand how it all works!). However, if you buy software licenses in bulk, or commit to a longer term, they can cost far less…so again, budgeting intelligently for your business growth can save you money in the long term. Also remember that many software licenses nowadays can be rented on a per user per month basis so its flexible and always up-to-date.

Maintenance: Be realistic

As the business grows and expands, so too will your IT maintenance needs. The key factor to note is to carefully consider the potential costs of IT failures and hardware issues. You need to take into account that you will undoubtedly have to spend money on maintaining your computers and overall network – and breakdowns can be extremely costly in downtime and lost productivity.

Some businesses find that it makes good financial sense to employ someone to be an IT technician in addition to taking on other responsibilities – but this person may not have the right expertise and experience to manage everything. The other increasingly popular option is to outsource your IT management.  With flexible pricing options now available to businesses, this is becoming a viable and often much more flexible route to take.

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Company Posts

Think Beyond The Box

With a holistic view of your business finances and admin in place, Sasfin’s new digital banking platform is engineered to help you grow your business.

Sasfin

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Welcome to the banking platform designed to support your banking needs. In response to more than 50 years of financing and supporting SMEs, Sasfin has launched a digital banking platform, B\\YOND, to help address the pain points and pressures that business owners face in South Africa.

“We’ve spent decades understanding what makes SMEs succeed or fail, and a lot of it begins with how well a business owner understands their finances,” says Sasfin CEO, Michael Sassoon.

“Failed SMEs often tend to either neglect or become completely consumed by their finances and admin. We wanted to create a platform that could help them take control of these factors, and give them a full 360-degree view of their businesses.”

B\\YOND was built to enable businesses to attend to their finances and admin seamlessly, thereby ensuring that entrepreneurs can focus on their clients — driving revenue and enhancing their products and services in the process.

Related: What To Consider When Investing Your (Hard-Earned) Money

Everything you need on one platform

According to Sassoon, entrepreneurs on the B\\YOND platform will never need to set foot in a branch again. The sophisticated technology incorporates many value-added services at no additional cost, including:

  • B\\YOND online applications: Businesses with multiple shareholders and directors can apply online, by uploading documents and signing the application digitally.
  • B\\YOND payroll: A simple-to-use and SARS-compliant payroll function enables business owners to perform their own payroll management.
  • B\\YOND invoicing: Businesses can create and send personalised quotes and invoices directly from the platform.
  • B\\YOND insights: Smart dashboards generated through clever account and transaction classification and tagging helps manage revenue and expenses, and keep track of projects.
  • B\\YOND integrations: Direct-feed integration into Xero ensures that small businesses and their accountants can safely and seamlessly connect their Sasfin Bank transactional data with Xero, the fastest growing cloud-based accounting software provider in the world.

Serving the entrepreneur

While there is much in store for the next versions of B\\YOND, the platform currently offers business leaders the basic tools they need to run their businesses smoothly in one place at no additional cost, with the ability to bank at their convenience.

“Sasfin has always existed to serve the entrepreneur and investor, the two key drivers of the South African economy and it bothers us that there is such a high failure rate of entrepreneurs in our country. We have spent the last three years building B\\YOND — a future-fit digital banking platform to help these entrepreneurs,” says Sassoon.


Engineered for success

Sasfin has gone above and B\\YOND to bring you a new digital banking platform that gives you the tools to make managing your business simple and profitable.

B//YOND is a value-add to all Sasfin Transctional Banking clients

Bank outside the box

The Sasfin Transactional Banking Business Account is designed for SMEs who want to focus on what they’re most passionate about — their business — while their banking platform not only sweats the small stuff for them, but helps manage and grow their business.

  1. Do you spend unnecessary time on banking?
  2. Does your bank pay you market-leading annual interest rates?
  3. Does your bank give you easy cash management in real-time?
  4. Would you like to manage your payroll and invoicing from your bank account?
  5. Does your bank help you keep track of your cash flow, manage your admin, and provide you with the set of tools you need to help run your business successfully?

Sign up today and have access to a whole new world of banking better for your business.

Visit: www.sasfin.com/bank/byond/

Call 0861 SASFIN for more information.

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Innovation

A Short Cut For Corporates To Digital Innovation: Start-ups

Charlie Stewart, co-founder and CEO of Rogerwilco shares his advice for turning to start-ups for solutions.

Charlie Stewart

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digital-innovation

If there is one anathema in corporate culture, it is failure. With profit to be made and share prices to increase, failure is simply not an option. And yet, when listening to stories about success in the digital space, failure is there to put one on the right path to success. The phrase ‘Fail fast, Fail often’ is often bandied about, and innovation can be seen as a constant process of iteration, test and failure, repeating this until a well refined service or product is on the table.

Many corporates are waking up to the uncomfortable fact that at a structural level, the type of innovation required to grow in today’s digital landscape, is out of their reach, at least when trying to come up with it internally. So what to do? Charlie Stewart, co-founder and CEO of Rogerwilco shares his advice for turning to start-ups for solutions.

1. The start-up solution

Corporates comfortable in the digital space – Apple, Alphabet, Facebook and Amazon – have been buying startups for years, and now companies are realising that when it comes to Blockchain, artificial intelligence and machine learning, they need to turn elsewhere. And they are. Matt Garratt, Vice President of Salesforce Ventures noted that of the roughly 1500 tech acquisitions Stateside in 2016, half of them were bought by non-tech companies, showing that buying a start-up is a quick way to acquire new technologies, skills or patents.

Related: Why Optimism Isn’t Enough – You Need To Also Accept The Brutal Facts

But purchasing a company with a fully developed product can be an expensive and often risky play. Instead we are beginning to see a trend where corporates are framing agile startups as solution providers, offering them seed funding to come up with answers to digital headaches.

In the US, defence contractor Lockheed Martin has turned its investment strategy around, focusing on young startups instead of more mature companies. In the region of $20 million was ploughed into startups in 2017, helping Lockheed Martin to get a slice of the pie in fast moving spaces such as cybersecurity, autonomous vehicles and nanotechnology.

2. Outsourcing the problem

For corporates turning to start-ups, there are two benefits. Firstly, by doing so companies are casting their net a bit wider, with not only more eyeballs on the problems but, importantly, without the restraints of the corporate boardroom. There is more out-of-the-box thinking involved, no internal politics to worry about and far less of a threat of somebody’s career being jeopardised.

Secondly, if a start-up comes up with a solution, investing in the fledgling company can be cheaper than purchasing one with an established solution. If a buy-out is on the cards, it is less risky too since the due diligence process has been worked through and cultural challenges have been ironed out.

But not all start-ups actually want a buy-out. Some rather prefer access to market and skills transfer, especially around the commercial side of business. Yes, they do need investment, so companies can provide them with a proof of concept to take their idea forward, or potentially a more structured form of investment in their business. 

3. Cape Town: the start-up hub of Africa

Locally, Cape Town can be seen as the tech start-up hub of Africa, and is certainly a good place for corporates to start sniffing around for that digital innovation golden ticket. Events such as last year’s AfricArena conference proved that Cape Town can be a fruitful hunting ground. 80 start-ups from across Africa attended the inaugural event, and were tasked to find solutions to problems provided by corporates beforehand. Air France, for example, was looking for innovative mobile solutions, the City of Cape Town wanted to see how technology can be used to improve the tourism industry, while RCS asked for a loyalty programme to match a new credit programme.

Related: 7 Ingredients Of Small Business Success Online

By all accounts the event was a major success, connecting start-ups with corporates and investors, both attending the event and dialing in. The winner of Air France’s challenge, mobile payment solution provider WeCashUp, received multiple offers of investment and the project has moved on to the proof-of-concept phase.

4. The start-up lifeboat

Many companies need to face up to the fact that the current corporate structure they are working within does not allow for the type of innovation required to adapt to, never mind thrive, in a digital world. South African companies were perhaps sheltered from the digital tsunami that has eviscerated the analogue business world, but the wave has hit our shores. If it is innovation that is needed, it is time to turn to agile startups, far better adapted to a sink-or-swim digital environment, to come up with the solutions.

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