Finding a new home for your business can be an exciting time. It can also present many challenges, especially for those less experienced in commercial leasing.
For most businesses, leasing office space will be one of the biggest operating costs so it’s critical that you follow a solid process and make good decisions when signing a lease. With a range of offices and locations to consider as well as legal documents and negotiations with landlords, the process of leasing office space can be time consuming and mistakes costly.
In this article, we look at some of the mistakes to avoid when leasing office space.
1. Not having a clear brief
Having a clear, detailed understanding of exactly what you’re looking for, right from the start, will ensure that your leasing agent can narrow the search, show you the properties that best match your requirements and ultimately find the perfect office for your business. It’s actually one of the most important parts of the entire leasing process.
A good brief will clearly answer these questions for your business:
- What is your annual leasing budget?
- How many staff do you have now?
- How many staff will you have over the next 3-5 years?
- What lease term (years) can you commit to?
- When do you need to move?
It’s also important to consider location and also the amenities you will need.
2. Not forecasting growth properly
One of the critical factors of a good leasing brief is a solid understanding of where your business is heading over the next 3 to 5 years. This includes increases or decreases in employee numbers, as well things like new equipment which will take up space, or the need for more meeting rooms or conference facilities.
Take the time to really plan what your business will look like over the lease term, so you can find a space that will move with your business into the future.
3. Failing to consult your team
Smart business owners know that their team is the business’s number one asset. If you are considering moving your office to a new location, it’s critical that you consult with your team and involve them in the process.
Be sure to check with your employees about how they will travel to and from work in the new location, and what amenities, both work related and personal, they would like to be able to access in the office and nearby. Taking the time to talk to your team about any proposed new office locations will ensure they are happy and able to keep doing a great job.
4. Leaving it too late
It can take time to not only find the right office to lease, but also to complete all of the necessary paperwork and negotiate the terms. For this reason, it’s important to keep an eye on when your current lease will expire, and start the process of finding a new office early. Leave yourself enough time to weigh up all of your options properly so you don’t feel rushed into a deal.
5. Not viewing enough properties
Once you start searching for an office, be sure to actually compare enough offices to make a informed decision. This means working closely with your commercial leasing agent to review suitable properties, and to consider the advantages that each one has to offer your business.
6. Not considering the whole deal
Following on from the tip above, try not to fall in love with one of the first offices you see. While a fabulous, newly fitted-out contemporary office can look great, it’s important to understand all of the other factors of the leasing deal and ensure, with certainty that it is the right office for your business.
Ask yourself or your agent the following questions:
- Is it the right location for your team and your clients?
- What other expenses will you incur, including electricity, data, end-of-trip facilities and cleaning?
- Is there any flexibility with the amount of space, or the lease term, if things change in your business?
7. Failing to understand the lease terms
Always seek independent legal advice from an expert property lawyer before signing a commercial lease. Ensure that you understand the terms, including the length of the lease term, exit arrangements and costs involved. It’s possible to negotiate better terms for any aspect of the lease that you believe may have a negative impact on your business.
8. Rushing into a deal
It can be tempting to sign on the dotted line quickly once you have found an office you like. However, it’s important to follow each of the steps in the leasing process, including seeking independent advice, to ensure there are no nasty surprises down the track. Take your time, and trust the process.
Finding the right office for your business can be exciting, but also challenging. It’s important that you take the time to follow a clear process, find the perfect space, negotiate a good deal and get your paperwork in order. Be sure to consult with your team to make sure they are happy with the new location. Work closely with your leasing agent to view understand the lease terms so when you sign you are confident that you’ve found the perfect new home for your business.