Which Office Option to Select?
Which Office option is best for you? When setting up a new Office one has several options to chose from, ranging from moving into a rented office, owning an office, taking space in a Business Centre, sharing space with a friend or taking up a virtual office.
The options are quite a few, and each option comes with several choices, their own unique costs, advantages and disadvantages. So how does one go about figuring out what is best suited for ones needs?
Size of your Business:-
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For teams which are more than 15 in size and there are no immediate plans to grow the team it makes sense to take an office on rent.
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For teams of 5 to 15 people it makes a lot of sense to take space in a Business Centre. Lot of support services, like office maintenance, reception services, office support services and the headaches of making sure that all equipment is working well can be left to the business centre. Plus the cost of all these services gets shared in the Business Centre across several companies so one needs to only pay for that which is used, overall the costs works out. For example, even a 5 member team needs a receptionist, however there is not so much work for the one receptionist, and what if the receptionist in not keeping well? Who will answer the calls? All these hassles and overheads are taken care off by the business centre. However do check if the business centre provides all these services.
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For teams of 1- 5 people there is no doubt that a business centre or a virtual office facility makes a lot of sense in terms of costs as well as efficiency compared to renting an office. When comparing costs factor in the cost saving in terms of manpower, maintenance, cost of furniture and equipment etc. And then look at the convenience factor. It the team needs to interact regularly then a dedicated office makes in a business centre makes sense. In case the team needs to meet only once in a while then one could use the virtual office facility for handling messages and phone calls and use the discussion rooms on an hourly basis for team meetings as and when needed. This can lead to a big reduction in your office overheads.
Nature of your Business:-
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Does your team need to interact closely on an hour to hour basis? If so you need a dedicated office space where all the team members need to work from. If not you could actually consider having a virtual office in a Business Centre and use meeting rooms or conference rooms for team meetings.
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Does your customer have to visit your office often? Is it important that the office makes the right impression on him? This might vary depending on the nature of your business, for instance if you are a builder and your customer has to invest his life saving in a project you are coming up with it makes sense to have a plush office which looks permanent and impressive. For a lot of other businesses what matters is an efficient and neat office.
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What kind of office space makes your team more productive? Look at the atmosphere and the culture of the office space or business centre. What is the focus on? Will your team feel comfortable, are they well taken care off? Will they be getting the proper support so that they can be more productive?
( See Below for Cost Comparisons )
Cost Comparison Table.
When comparing office options it is important to factor in the total cost as well as look at the total life time cost of the option that you are selecting.
Costs to include would be:-
| Cost |
Rented Office |
Business Centre Dedicated office |
Virtual Office |
| Monthly Expenses |
|
|
|
| Rent |
Add |
Add |
Variable |
| Building Maintenance |
Add |
Included in Rent |
Included in Rent |
| Electricity |
Add |
Included in Rent |
Included in Rent |
| Generator |
Add |
Included in Rent |
Included in Rent |
| House Keeping |
Add |
Included in Rent |
Included in Rent |
| CAPITAL SPEND |
|
|
|
| Deposit for Office |
Typically 10 months of Office Rent |
3 Months of Cabin Charge |
A small deposit. |
| Furniture |
Add (unless included in Furnished office rent) |
Included in Rent |
Included in Rent |
| Telephone Lines and Equipment |
Add |
As per use, no fixed cost. (some business centres charge a set up cost) |
As per use |
| Internet, LAN, WiFi |
Add |
As per use, no fixed cost. (some business centres charge a set up cost) |
As per use |
| Photo Copier, Fax Machines, |
Add |
As per use |
As per use |
| Coffee Vending Machines, Pantry Equipment |
Add |
As per use |
As per use |
| Conference Room Equipment |
Add |
As per use |
As per use |
| People Costs |
|
|
|
| Receptionist |
Add |
Included |
Included |
| Office Assistants |
Add |
As per Use |
As per Use |
| Office Administration |
Add or apportion cost |
Included |
Included |
| IT Infrastructure support |
Add |
Included for typical requirements |
Included for typical requirements |
For Capital Expenses take an interest rate suitable to your business to make it a monthly expense.
Add depreciation cost / loss on sale in case you need to move office after 2-3 years.
Intangibles to consider while evaluating between Rented office vs Business Centre
- Energy and Time spent on non core activities like office facilities.
- Time spent in training staff related to office facilities.
- Time spent in fighting facilities related hassles, phone not working, A/ C not working etc.
- Network Support, Some Business Centres including Golden Square actively connect customers to good quality vendors as well as to customers.
To sum up, look at the total cost and needs of your business before coming to a conclusion on which office option suits your business. Use a spread sheet to capture all costs, add some value to intangible benefits and then come to your own conclusions.
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