Considering businesses can reduce their rent cost by 40% and also take a month to month lease term as opposed to the standard 3-5 month term with traditional real estate, more and more businesses are considering shared office space. For both small and large business, shared office space is a very smart option to at least research and consider.
But what should someone considering a shared office space watch out for? I’d like to share some industry insider insight and give you some questions to ask when you are touring shared office space to help in your search.
Before You Tour
Check their reputationNot all shared office space providers are created equal. Go online and get some advanced knowledge and check reviews. (Google map listings are a great source.) Also, check their website, are they a member of industry associations such as the Alliance Business Centers Network (ABCN)? Check with the center manager and ask if they are members of Office Business Centers Association International? These industry associations ensure that the operator meets industry standards
During Your Tour …
Ask To See A Complete Price List!The power of shared office space is that it bundles all of your office costs: janitorial, utilities, fax, copy, phones, high speed internet, furniture, admin assistance, receptionist, conference rooms, etc. The list is fairly extensive, but you will get a complete office and only need to worry about one bill. The best thing is that you only pay for what you use … but it is important to know what all of these features cost if you should use them.Ask to see a detailed price list. Make sure that everything is outlined and ask if there are any other possible charges that are not included in the list. Move in costs? Move out costs? What is the admin assistance charge?Insider Tip: Looking at all of the services itemized may look a little intimidating, but remember that you only pay for what you use. Where in a traditional office space you would pay for those needs when they sit idle. (Just a copy machine can cost $5,000 to $10,000 per year in maintenance contract after paying for the machine itself.) So weigh this fact when scrutinizing the price list.
Can You Track Conference Room Use?Following on the price list, is being able to track your usage to avoid any surprises. Many of the pay-per-use costs tend to be fairly minimal and don’t result in many surprises. For instance, if you ran tens of thousands of copies in one month, you won’t be surprised that the copy cost is higher than normal.However, were cost can really add up is in conference room utilization. It is a great feature, and the impact of meeting in an elegant boardroom for an important meeting cannot be understated. But, make sure that the shared office space provider has a method for you to not only book your meetings online, but also track your usage so you can avoid going over your allowance. (Or at least can budget if you do need to go over.)
Access To Decision Makers?Truth is that unlike other vendors, your shared office space provider is one that you will share an office suite with. (Though, considering many are very highly accomplished office managers, this can actually be a really great bonus.) As such, there is a closer relationship that is created.Make sure that you not only feel comfortable with the office space manager, but also that they are a decision maker. Typically, you will want to have easy access to a regional manager or higher. As a test, ask for their contact info … you can even send them a note letting them know you are considering renting an office and see if they get back to you.
After Your Tour …
Detailed QuoteIf you get a quote that doesn’t break down the various charges, get them clarified so that you can make sure that there aren’t costs missing that you will actually need to pay. Not only is a quote that lacks detail a red flag, but it doesn’t allow you to make an apples to apples comparison. Make sure you know not only know the lump sum, but also what is included and not included in that lump sum.
Detailed AgreementRental agreements are for your protection as much as the office space providers. Make sure that the agreement is not only clear but complete. If you don’t understand something in the agreement, make sure that it is clarified for you. These agreements aren’t rocket science, so don’t expect a heafty document. However, if the agreement is only one or two pages that is a major red flag … what isn’t outlined?
Insider Tip: Virtual Office agreements are typically less involved because it is a service agreement as opposed to a rental agreement. While it should be clear and complete, it won’t be as long as a rental agreement.
Termination NotificationWe hope that at some point, you will be so successful that you will expand into needs that a shared office space can’t provide and need to move out. Industry standard is 30 day notification to terminate your lease, however, some less upfront providers will slip in a clause to require notification up to three months in advance! Make sure you know the clause on termination notification and that you get it in writing!
With the tips above, you can feel confident that not only are you getting the cost savings and flexibility benefits of shared office space while making sure that you are partnering with an upfront and reputable shared office space operator.
Nicholas DeGraff Marketing Manager
Currently serves as a Marketing Manager with a focus in online marketing and market strategy. Prior to joining Pacific Business Centers (rebranded to Pacific Workplaces), Nick consulted with small businesses to assist in a business development and public relations role.