BusinessExpert Advice

Things to Consider When Looking For a New Space for Your Business

Contemplating a business move is a big endeavor. But if the time is right for your company, here are some things to consider as you plan. 

1. Consider your growth plans

Do you plan to grow your business significantly in the next five years? How many employees do you have? Keep in mind the size of your current operation and where you plan to grow as you think about the right space for you.

  • How much space do you need?
  • Are you adding new product lines or considering a new service to increase revenue?

“The simple act of paying positive attention to people has a great deal to do with productivity.”

Tom Peters
Author In Search of Excellence

2. Think about your ideal work environment

What sort of environment are you looking for? What sort of environment do your people need?

Do you want employees to be in a collaborative space or a more serious corporate-style environment? Do you want an open loft with shared desks or cubicles and corner offices?

Think about your people now, the people you think you’ll need, and consider the obstacles your people encounter every day. Ask yourself, “what can’t I do without?”

3. Budget

What can you afford? Are you in a position to purchase something, or do you need to cut costs?

This will have a lot to do with location and building-type as well. What neighborhood are you looking to be in? Do you want a space in a high-rise or an entire building?

4. Obligation/Contract Length

Are you established and looking for a long-term solution? Or are you an early stage start-up looking to stay untethered?

The Growing Trend of Coworking Spaces

A coworking space is an open office environment where consultants, independent contractors, or small companies can rent space based on size, whether it’s one desk, five desks, or a whole floor. The owner is responsible for maintenance, cleaning, utilities, hardware, and furniture, freeing up time and money for the renters.

In the later part of 2019, news coverage focused on the decline in valuation of coworking giant, WeWork. But even though investor interest fell, coworking is not going anywhere. According to the latest growing figures, over 2 million people now work in a coworking space. 

Pros of Coworking Spaces

  • Cheaper rent
  • More flexible (month to month rent)
  • Access to technology & the latest trends
  • No time spent fixing printers, setting up wifi, managing utilities contracts
  • Networking & collaboration around the office 
  • Perks like free coffee and shared kitchen

Cons of Coworking Spaces

  • Potentially loud/distracting environment
  • Not very private
  • A potential lack of productivity
  • No visible signage or branding for your company
  • If you rely on space to make calls & conference rooms, this may be hard to guarantee

If you hate troubleshooting issues with printers and routers, coworking could be right for you. This is a good option for small companies looking for a low cost, short-term commitment and an interactive, cooperative environment.

Buying a Building or office space

As you contemplate buying a space for your small business, there are things to consider.

Pros of buying or building your own space

  • Equity for further investment
  • Likely the value of the property will appreciate over time
  • Tax benefits
  • Potential for rental income if you sublease part or all of the space in the future

Cons of buying or building your own space

  • Not as flexible
  • Higher upfront investment
  • Cost of maintenance and property taxes
  • May be harder to afford a place in the neighborhood you want

Alternative Logistics: 3PL and Drop Shipping

Depending on “where” you meet your customer and how – your space requirements might be suitable for an even more creative solution.

As you rethink the amount of physical space your business needs, think about warehousing and logistics. Do you need to keep your warehouse? There are some pros and cons to an alternative option like a third-party logistics company (3PL) where they house, process, and ship orders/packages for you. Curious about this solution? 

Learn more more about 3PL: Should you work with a third-party logistics (3PL) company?

Pros of third-party logistics

  • No warehouse to manage
  • Better shipping rates
  • Requires fewer employees/smaller workforce
  • Peace of mind
  • More flexibility

Cons of third-party logistics

  • Could be more expensive, depending on your existing space requirements
  • Slower reaction time to changes
  • Less control over process

Many companies are moving to a drop shipping model to take advantage of lower shipping costs and a smaller footprint. With drop shipping, you only pay to ship something once from manufacturer directly to the customer. This can be helpful, especially if you’re selling larger products.

As you contemplate a move, consider the pros and cons of coworking, leasing, and buying, as well as 3PLs and drop shipping. There are great options out there, so make sure to find the one that’s best for you.

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