Some businesses don’t focus much on looking for an office space for lease. Every business owner understands the importance of marketing their business, securing talent, and offering satisfactory service to their customers. However, some business owners treat their office space as an afterthought.
This can end up being a costly mistake, resulting in debilitating expenses, business difficulties, and other things that threaten your business. When leasing office space, it’s important to secure the right space for the right price, ensuring you can continue running your business smoothly and without any crises.
When looking for a commercial space for a small business, there are some common mistakes that you should avoid.
Mistakes to Avoid When Leasing Office Space
Not Giving Your Business Enough Time:
Leasing a traditional office space can take a long time. When leasing and moving into a new office space, the entire process can take anywhere from eight to 18 months, or even longer. Finding office space that fits your needs and budget can be tough in crowded markets. As well, checking out the space, negotiating the lease, building the space, and moving in can take a considerable amount of time. If you don’t give yourself enough time, your business may find itself without an office space to use.
Before you sign a lease for an office space, careful planning is needed to ensure the space is right for your business. Business owners need to ensure that an office meets their needs, providing the right office layout, amount of space, and electrical/telecom requirements.
Lack of Tenant Representation:
Before signing a lease, you should have a tenant representative go over the agreement and ensure that the terms are in your interests. Tenant representatives can negotiate on your behalf. With a multi-year lease, you can become stuck with an unfair or undesirable office space. If you are using a small business space for rent, then you do not need a representative, as long as you are renting on a daily, weekly, or monthly basis.
Not Understanding/Checking Lease Terms:
If you’re signing a lease, then you should understand all aspects of the agreement. Review all documentation and ensure that you know what you are signing up for. Landlords will always try to maximize the money they can make, and there may be hidden terms in your lease that could have a big negative impact on your business.
Not Checking Rent and the Security Deposit:
With any small business space for rent, you want to make sure that the rent is in line with other office spaces and properties on the market. The security deposit should also be in line with market norms. Landlords will always try to secure the highest rent for their property, so you want to be able to ensure that your rent is reasonable and negotiate a fairer price if it is not. Fully furnished office suite rentals are typically more affordable than leasing an entire office space.
Working with the Wrong Broker:
Some business owners will use a real estate broker to help them find the right space. The problem with this is that many real estate brokers represent both landlords and tenants, which can be a conflict of interest. These brokers may have your landlord’s interests at heart. Look for a broker that can represent your interests, not your landlord’s.
Making Impulsive Decisions
Sometimes, being on a major time crunch to rent an office space can force you to make quick and impulsive decisions without fully thinking them through. This can have some pretty serious financial and practical consequences for your business as it could incur a lot of unnecessary spending or cause you to miss something important that you needed but underestimated. Make sure you carefully consider all of your options and don’t let landlords or real estate brokers try to pressure you into making a quick decision. Always go with your gut instinct.
Relying Only on Commercial Real Estate Listings
When it comes to renting office space, sifting through listings can be very helpful, but it’s also important that you do your own thorough research to ensure that the spaces that catch your attention are actually worth considering. Take the time to view each location before signing any leases so that you can be absolutely certain that you’re making an informed decision.
Waiting Too Long to Search for Office Spaces
Procrastination is the downfall of every commercial real estate deal. Waiting too long to start searching for a small business office space could actually be very problematic for you. It usually means that you’ll feel more pressured to make decisions based upon convenience and availability rather than truly taking the time to think about the needs of your business. This is exactly what landlords and real estate brokers are hoping for because they’re banking on the fact that you’ll be so desperate to find a space that you’ll agree to pay premium rates.
Failing to Understand the Power of Negotiation
All real estate deals rely heavily on the art of negotiation and you should never underestimate how truly powerful a good counter-offer actually is. Don’t be afraid to voice your opinion and fight for a location that you know would be an ideal workspace for your company. These days, it’s standard to have a number of amenities and utilities included in your biweekly or monthly rental fee, so make sure that’s exactly what you’re getting as part of your lease agreement.
Failing to Consider Your Employees’ and Clients’ Commutes
When choosing an appropriate and conveniently located rental office space for your company, one of the main points you need to take into account is how your employees are getting to work. Whether they drive in or take public transportation, it’s imperative to choose a location that can properly accommodate both options. A location that has adequate parking and is located within walking distance of a nearby public transportation is ideal. Your customers should also be able to have easy access to your new office space location. Parking should be easy to find and either free of charge or validated so that they don’t have to pay astronomical fees just to come in for a meeting with you.
Becoming Emotionally Attached to a Certain Office Space or Building
Throughout your search for an appropriate rental office space, try to keep your personal feelings in check as much as possible. Sometimes, you might be completely enamoured with a specific location or space that for some reason just doesn’t work out in your favour. Perhaps you simply can’t afford it or you’re unable to reach an amicable agreement with the landlord, or maybe it just doesn’t suit the needs of your company and expectations of your employees and clients. When this happens, the best thing you can do is simply cut your losses and move on to a different property. Eventually, you’ll find a location that’s perfect for your current and future business requirements.
Failing to Conduct Thorough Market Research
In order to ascertain that you’re getting the best deal possible on your lease agreement and that all of the terms are at least standard within the industry, you should hire a reputable real estate broker. They have the expertise and necessary resources to handle the majority of the necessary research, help you fill out paperwork, and aid in the negotiation process. Just make sure you hire a broker who isn’t biased towards your landlord because then they’ll most likely convince you to take a deal that benefits them more than you. One of the worst mistakes you can make in this regard is to hire the first broker who comes knocking on your door. Meet with a few different brokers and try to get a feel for how they operate and what they have to offer you specifically.
Quickly Skimming Through a Lease Agreement or Contract
This is, without a doubt, the absolute worst mistake you can make throughout the process of renting an office space. How can you possibly agree to the terms of a contract or lease agreement without actually knowing and understanding what they are? Before signing anywhere near the dotted line, go over the contract in its entirety with a real estate lawyer and make sure you fully comprehend and agree to all of the terms and conditions involved. This will save you from enduring a lot of problems down the road.
Failing to Research Average Rental Fees and Security Deposits
When researching rental office spaces in any given area, you need to pay your due diligence. Draw comparisons between different buildings in each area based on location, rental fees, security deposits, and the amenities offered. While all of these factors are essential to finding a fitting office space rental for your company, you also need to try to focus on the ones that’ll make the biggest impact on the success of your enterprise, regardless of its size. Try to find a workable middle ground by going with something that’s affordable, clean, conveniently located for everyone involved, and equipped with a slew of amenities that your employees and clients can enjoy.
Settling for a Fixer-Upper
It’s easy to settle for an older building that’s a little rough around the edges because it comes with a slightly cheaper monthly rental fee attached, but in the long run, this can actually end up costing you more than you anticipated. Even though it’s generally the landlord’s responsibility to make sure that the building’s infrastructure is completely up to code and that everything is properly taken care of, it can be extremely inconvenient and costly to have to temporarily relocate or shut down your business operations every time repairs need to be made. Frequent repairs and evacuations are a risk you take when renting older buildings because a lot of these structures have unforeseen internal structural issues that can be hazardous to the health and safety of anyone who uses them, including yourself and your employees.
If you’re looking for affordable office suite rentals, Innovative Professional Offices offers fully furnished rentals, along with coworking spaces and virtual offices in Ottawa, Brampton, and Mississauga. To learn more, visit www.InnovativeProfessionalOffices.com.
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