As a small business you may require an office outside of your home or a local coffee shop, but is signing a long term lease on an office space cost effective? Let's break down the average costs of a long term lease for a small business.
Leasing office space is one of the largest expenses that small businesses face, therefore it is important to explore all the options. You might look into renting an actual office or renting a virtual office space. If you chose to rent an office space you might want to pay a monthly fee for a space that is already set up. If you prefer the freedom of designing your own custom space, you might seek to negotiate a rent based on a dollar amount per square footage. Ask the property manager for the figures for the usable square feet and the rentable square feet of the property. To work out your average monthly cost multiply the cost of square feet by the rentable square footage. For example, if the rentable square footage is 1,160 and the price is $1 per square foot, your monthly lease amount is $1,160. Research the costs of a wide range of business locations so that you know the going rate for square footage in your market. Once you make a decision you'll be presented with a commercial lease prepared by the landlord's lawyer. The terms usually favor the landlord but there may be wiggle room, so it is best to negotiate improvements.
Office space can be very expensive. In Canada, Toronto's Bay Street is the most expensive area. Office space on Bay Street costs $68.87 per square foot. Prices in the downtown area are generally high due to demand. In Vancouver, renting office space on Burrard Street area is costly, average rents are $58.47 per square foot. Outside of this area cheaper rents may be found. An office space on Calgary's Second Street S.W. runs at around $55.29 per square foot. Once again, away from the downtown area, office space prices may be more affordable.
It is important to remember that rent may not be all you have to pay, as utilities and overheads may not be included in the rental fee. Furthermore, unlike residential leases, commercial leases sometimes stipulate that the tenant must pay for all property upkeep or repairs on systems like air conditioning, plumbing, etc. Due to high costs, renting an actual office space is not always cost effective. You might want to think about looking into a virtual office and meeting rooms. A virtual office can dramatically cut costs whilst allowing you to retain all the benefits of a real office.
In comparison to merely renting a P.O. Box address, a virtual office will allow your business to have an address in a prestigious building, thus maintaining a professional image at relatively low prices. As the costs of most services are split by clients these are usually very fair. Furthermore, unlike in an actual office, you won't have fees associated with managing employees, since the virtual office provider will handle these. This means avoiding the costs and administrative work of dealing with employee taxes, benefits and legal issues. Renting a virtual meeting room can be an economical alternative to having to pay a monthly rent for office space and offers an alternative to meeting in bustling cafés.
The advantages of virtual meeting rooms are numerous. You get access to a multitude of rooms of different sizes and locations across the globe in minutes. You can rent a meeting room with a wide range of amenities, such as catering or high-tech presentation tools, for whatever length of time suits you. You can access luxury venues without the high price tag and responsibilities of a monthly rent for actual office space. Price structures for virtual offices and meeting rooms are usually competitive and clearly defined, which means you can manage your budget effectively with no nasty surprises! Due to their cost effectiveness, small businesses are increasingly turning to virtual offices due to the cost effective solution they provide.