The Moving Question
To move to commercial space or not to move: that is the question.
One of the most complex questions a budding entrepreneur must ask is do I need to move out of my home and into commercial space?
Your business may have begun as a hobby that suddenly became profitable, you may have begun the business for a secondary source of income, or you may find that something you're passionate about leads you into business. For example, consider a baker who loves to make cakes for her family and friends. Here and there these same family and friends begin offering to pay for the ingredients if she'll bake a cake for this or that occasion. Before she knows it, her cakes are in high demand. At what point will her kitchen, dining room and living room no longer be adequate for her booming business? When she begins to start thinking about a commercial space, what issues must she explore?
The Need for More Physical Space
The need for actual physical space becomes apparent when your business begins to take over your home. This is very common when your business is based on a manufactured, physical product (cakes, birdhouses, fancy dog collars, and so on). Space can also become an issue if you begin hiring employees. You may have people as opposed to products filing your dining room and living room, encroaching on your space. Each employee typically requires about 250 square feet of work space.
If employees or products are overflowing into your living space, but you are not financially ready to lease or buy commercial property, you still manage by setting very specific boundaries. Perhaps your finished garage has become your work space, your basement is designated as your office, or you have a separate entrance to a location within the house.
Seeing Clients
Depending on your business, you may see clients in your home office. Your analysis of your business and the types of clients you see will be the determining factor in whether this is appropriate or not. How often you see clients is also important. If you see clients very infrequently and yet a commercial office would be more suitable, could you use a rentable conference room for those meetings? Most large metropolitan cities have conference room areas to rent by the hour. Keep in mind that the client's perception of your business is a key factor.
Distractions and Interruptions
Perhaps have a perfectly suitable space at home, yet there is a snag: children. While you may choose in-home care for your children during your work hours, it is difficult for a toddler to understand why daddy can't come upstairs and play. External child care or external office space can be suitable. Self discipline of you and family members is a key factor.
Psychological Factors
Years of conditioning in an office space working with others may make your house feel like home, not a work space. Is the lack of social camaraderie making you feel isolated? Do you miss the social interaction of other people? Are you seeking an exterior space so that you can be surrounded by other professionals? Do not discount psychological realities like this. You may be able to meet this need by becoming very active with networking groups, arranging frequent breakfast meetings or lunch meetings to stay plugged in and attend to your social needs.
Defining your business hours is another consideration. Can you designate work hours and stick to them? Can you shut the door to the office at the end of the day and cross over to the threshold of home? It's 11:00 pm and you hear the fax machine and an email alert going. Can you wait until morning to address these items? Self-discipline may come in to play, or you may settle into a flexible routine that works for your business and lifestyle.
Business Regulations and Need for Commercial Address
Based on the industry you have chosen, there may be legal ramifications to working in a residential location. After researching this factor with state and local government and industry agencies, you may have no choice but to move to a commercial space. Some industries require a commercial business address. This factor trumps all other considerations.
Corporate Identity
Depending on your industry, a commercial space may be necessary from the view of your colleagues and clients. Client expectations come in many forms. Some seem obvious: you provide a good service at a competitive price. Other expectations, such as your workspace, are more elusive. The larger the dollar value of the purchase your client makes with you, the more the client needs to feel they have made the best decision to choose your company. The reassurance of an office, furnishings and commercial presence in a large building helps the client trust you. A consultant charging $250 an hour; a mortgage lender providing a $300,000 home loan; an attorney drafting franchise agreements are just some of the companies that may be better suited for commercial space. You may be tempted to dismiss this factor as merely a client's emotional expectation, but there is nothing "mere" about it.
Budget
This is the most important factor in choosing to move into commercial space. You must take a very close look at your operating expenses and determine what amount you could pay each month for rent. Most leased space comes with a minimum of a one year commitment. Are you prepared for this expense if there is a downturn in your business? We will cover many aspects of the costs associated with commercial space in detail.
Related Articles
| Building Analysis When you have made the decision to lease or buy a commercial property, you need to look at the entire commercial property, the specific portion of the property you need, and concerns about the property. |
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| Finding a Broker If you've ever bought a house or rented an apartment than you know you need a partner to help you locate the right property. When you start, you don't even know what you don't know. You many not even know what questions to ask to determine the best choice in space for your company. Do you want to lease or purchase? What does triple net mean? How much space do you need? What length of time do you need to commit to a lease? This is just the tip of the iceberg in questions you will begin asking in the search for the right property. The person who has the answers to those questions and can elicit the answers to questions you haven't even thought of yet is a professional commercial real estate broker. |
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| Searching on Your Own We've previously discussed that there are many questions that need to be answered when looking for the right property for your company. Although we recommend locating a commercial real estate broker so they can guide you through the process you may choose to locate your own property. We will review some of the things you can do to research properties, however to gain access you will need to contact the listing broker to view the specific property.
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| Business Considerations From your business's point of view, what issues need to be considered? In short, you need to assess how finances, timing, and convenience of a move will affect your business. |
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