For countless business owners, especially those in a start-up or expansion stage, one of the most daunting items on their to-do list is finding office space. Entrepreneurs have wrestled for centuries with this riddle that can literally make-or-break a business: how do you enter into a long-term lease at a time when you’re the least certain about the future of your company?
Ah, the dreaded long-term lease… For a business in its earliest and most fragile stages, it’s a petrifying decision. Standard leases usually require a three- to five-year commitment, an eternity in today’s fast-moving disruption economy! How many clients will you have by then? How many employees? Will your cash flow or credit be strong enough to finance it? What outside factors might impact your industry? Will the location still suit you? Short of a crystal ball, even the most well-conceived business plans can’t provide the certainty most entrepreneurs desire.
But if you don’t sign that lease, then you’re at the mercy of landlords who can raise your rent whenever they want. This can not only affect start-ups, but also established businesses, such as this craft brewery in Syracuse(1).
Thankfully, coworking, a type of shared space rental, has revolutionized the way companies approach the office search, tilting the scales toward the consumer and making certain portions of the commercial real estate industry an on-demand experience(2). For smaller companies, especially, coworking solutions are replacing long-term leases with flexible member-use agreements(3), giving companies the option to quickly and easily expand or shrink their office portfolios. Short-term swing space in serviced office space locations is often available to larger companies to help when they need to quickly ramp up hiring or tamp down headcount.
Better still, most shared office spaces offer a variety of tiers(4), so they fit almost any budget. Ranging from one-person hot desks (first come, first served) to dedicated desks to private suites, coupled with flexible daily or monthly, pay-as-you-go, agreements, businesses can easily scale their workspace based on their needs and growth. In fact, in addition to coworking facilities not requiring long-term commitments, they don’t require much up-front cash either, allowing business owners to redeploy cash to other priorities and shorten their paths to profitability.
Coworking facilities also come with built-in furnishings, conference space, IT solutions and support staff, all for a fraction of what it would cost owners in dollars and time to acquire and manage these serviced office space assets on their own. Yet, as with traditional leases, coworking operators are responsible for their building’s costs. In other words, you’re not wasting time hiring landscapers, fixing leaky faucets or dealing with the copier guy. Instead, you can focus on growing your business and serving your customers. You gain all the benefits of a traditional lease agreement, without the lengthy commitment and hassles of managing the office!
There are many benefits of coworking(5), most of which fall closer to the perfect-world, self-actualization, top of Maslow’s famous Hierarchy of Needs pyramid. Improved efficiency, idea sharing, networking, social interaction and nonmaterialistic support are some of the documented benefits which occupants experience. However, none of those matter if the business itself isn’t profitable and you can’t make payroll! A flexible office with shared space for rent can help you make sure the basics of your business are covered, allowing you to scale in size and scope, strategically.
To learn more about how HANSA can give you a professional office solution without the financial and operational burdens of a long-term lease, reach out to me at [email protected].
About the Author:
Laura Jimenez is the Community Manager for HANSA, set to open in August 2020 at 505 Ellicott Street in the heart of downtown Buffalo.
(1) Empire Brewing Co. in Armory Square closed after rent was tripled, owner says,Syracuse.com, 10/18/19
(2) 8 Major Trends in the Coworking Industry, Coworking Resources.org, 2/13/19
(3) Let?s Talk About Flex: The U.S. Flexible Office Market in 2019, CBRE Research, 2019
(4) Coworking Space Prices, Coworking Resources.org, 2/24/19
(5) Why Coworking Spaces are the New Normal,? Business2BusinessCommunity.com, 5/28/19