Renting office space is both costly and a big responsibility. Once you’ve signed on the dotted line you’ve committed yourself to a host of legal obligations, and perhaps your staff and business to a whole new way of doing things. Before you take the step, here are seven key questions to ask yourself and others:
1. Do you really need an office?
This is the first critical question. If you have no employees, don’t need to be physically accessible to clients, and seldom have face-to-face meetings, then you probably don’t need office space. That said, there are also benefits to having an office. A good physical location projects an image of stability and professionalism and, if you can perhaps share it with other like-minded professionals, you have a ready-made social network and sounding board for problems and day-to-day business issues.
2. Are you clear as to what your office must do?
Before you start looking for premises, give careful thought to your long-term office requirements and how it fits in with the strategic plan for the business. If you plan to double the size of the company in three years, it’s pointless signing a three year lease on premises that are just barely big enough for you now. If you expect your long-term client growth to be on the West Rand, it’s not ideal to rent an office on the East Rand.
3. Do you need a property broker?
The reality is that most of us don’t have the time or expertise to inspect premises and do our own deals, so a good broker with a well thought-out brief will be worth the extra costs incurred. They’ll sort the wheat from the chaff and only call on you when they’ve found something potentially suitable to rent. A broker can also be worth his or her weight in gold (or money saved) if they help you negotiate a good deal and avoid the many pitfalls that await the unwary tenant. Remember – you might negotiate a lease once or twice in a lifetime; a broker does it daily!
4. How much is the rent?
It’s the obvious question when renting office space; but you do need to look a little further than the basics. This will be one of your biggest ongoing expenses, so you need to have the resources to pay the rent, even if your projected cash flow is sometimes lower than expected. Ask if the rent due in advance or in arrears? Is there a deposit payable and under what conditions is it refundable, or otherwise? Is there an automatic escalation of the rent and, if so, how much and when?
5. Who is responsible for what?
Before you sign any deal ensure that both you and the landlord have agreed on who is responsible for what. Does the landlord look after external maintenance while you take care of internal upkeep? If it’s the latter, what work can you do without requiring the owner’s permission? If you have specific requirements before moving in – such as dry-walling for new offices or shade netting for additional parking – will the landlord put these in place or is it up to you?
6. Is there adequate security?
With crime being a major issue in South Africa, it’s vital that good security is in place. Check if you need to supply your own security guards or whether the landlord does so (for example in an office park). Are alarm systems already installed, or must you fit your own? Is the current perimeter fencing adequate? Can you and your staff gain easy after-hours access, if necessary?
7. What’s the tenant mix?
If you’re renting office space in a building or office park with a large number of other tenants, check that they’re compatible with what you do. Vastly differing corporate cultures can spell trouble and can be off-putting to clients and visitors. An environmental action group next door to a chemical company’s offices would be an obvious non-fit. So would a relaxation spa adjacent to a panel beater’s premises.
Plan ahead, ask the right questions, and you’ll be happy in your new business home.