How to Choose Your Office Space
- That expensive $5K looks attractive to your 5-person startup.
- "It'll impress my clients!" Bob tells himself.
Bob takes the 3-year lease. Bob is now paying $60K per year.
Bob could've invested that $60K into a salesperson.
- ...which would've grown his company even further
- ...and increase his company's value
- ...and make his company look more attractive to investors
- ...and brought in more money to grow the company further
Luxuries Just Attract Spenders
You don't want Schmo, who chooses a company because of its luxury offices instead of things that matter to a company's long-term future (i.e., team, direction, work ethic, etc.).
If Schmo rejects you because of your office space, you don't want Schmo.
Rich Companies Live Cheap
Goldman Sachs, the crazy ridiculous rich company of the world, has horrible-looking offices, with dirt-stained carpets, ten-year-old chairs, no signages, the yaddas.
Wal-mart, the wealthiest company in the world, still has its headquarters in Bentonville, with windowless offices, cheap carpeting, and resembling a cheap motel.
Bill Gates and Microsoft CEO Steve Balmer have ~100-square foot offices, with desks that you could buy on Craigslist.
Rent is a cost.
Businesses that thrive reduce their costs as much as possible, and invest in as many appreciating assets as possible (e.g., sales-oriented staff, technology that helps the team become more productive, etc.)
Find office space where:
- your team can work comfortably
- it's accessible to your team (and potential team)
DONE.
Invest in things that grow.
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Posted November 10 in Finance, Management |
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on "How to Choose Your Office Space"ricerocket (Rank: #23)
The startup days with those luxury offices in Palo Alto were fun times.
naina (Rank: #1726)
Or be a freelancer. Work from your laptop - wherever that is. Lots of coffee shops provide great meeting-areas, where you can meet with clients if you HAVE to.
heather (Rank: #1922)
I totally agree with what you said. I have never understood why people think they must have the luxuries at the expense of making the company more solid. Some say "Look like you are already successful." Well, if the business goes under because of bad spending, none of it will do any good.
david730 (Rank: #2252)
windows supposedly help boost morale and inspire creativity also.
reilly3000 (Rank: #37)
I run a low overhead ship- second hand furniture etc. But as a web freelance type I found it important to have an office for three reasons:
A. Quiet workspace is a must- I have a 2.5 year old interruption machine at home, and coffee shops make me just want to look cool and listen to others interesting conversations.
B. Clients like it and are willing to pay more for an "established business". I just got an SEO contract because I could prove that I am NOT working out of my home.
C. Connections- I have made some stellar connections with people in my building, and yesterday some random guy literally knocked on my door and asked for some social media consulting help- because he saw my sign. Random, but I'll take it!
roblambert (Rank: #2256)
I agree with this post, but windows are not a luxury but a necessity!
maurknip (Rank: #3)
I'm a fan of the windows are a necessity train of thought, but the post in general made a great point.
You don't need a fancy office to run a good business, and you don't want customers who are more concerned about the appearance of your office than your work quality because chances are they'll be too poor to pay for you services soon anyways.
carbur8r82 (Rank: #8)
People are too superficial. The bottom line needs to be about productivity and profit not how pretty the office is.
Great example companies too.
e.ferg (Rank: #10)
I'm a big believer that simpler is better... I don't think that people need a super fancy office to be productive and successful and it's good to see a post that confirms that...
jseyah (Rank: #11)
rent is a cost is a really great thing to point out. so many people don't take rent into account when they rattle off their expenses and it's a terrible mistake to make.
pbcdanielle (Rank: #2298)
I think the last line of this article rings very true, "Invest in things that grow." I am a firm believer in growing your business, but that all happens in due time. No person should live beyond their means – and this is the same for companies. If you don’t have the 30K a month to spend on a huge office space in downtown SF why not start off with a small virtual office with a great SF address – then expand as your business grows? There are many sensible solutions to office space, and people should definitely choose wisely.
Kudos on a great article!
mniffirg (Rank: #7)
Very true PBC.
Spending wisely is something that a lot of businesses and adults in general don't understand.
I little bit of enlightenment would go a long way, and big flashy offices are usually far from enlightening.
victsteria (Rank: #4)
I find that basic spaces are really the best option as well
Windows are important to me personally I feel that they are good for morale even if they do provide distraction
I am a fan of simplicity though Nothing fancy is needed in an office just the necessary equipment for your business to function