Finding and affording good office space is one of the biggest challenges that new businesses, particularly start-ups, face. Not only is location incredibly important, but the ever-growing cost of rent is also a major concern. Despite these barriers however, small and start-up businesses need to keep finding the right office space environment at the top of their business agenda and if you’re unsure as to why, we discuss below.
For any business to have launched, a gap in the market will have been identified and a really robust business model will have been drawn up. It is usually at this point that the new business owners realise that they need to identify where this new enterprise will happen. Most start with the entrepreneur working from home before taking the leap to sourcing office space. The first step in the search can be a seemingly never-ending trail around potential office locations, this is when reality kicks in and the obstacle of cost is raised.
Recent data has revealed that London’s West End has now overtaken Hong Kong as the priciest place in the world to rent office space and finding the right space for any new business can seem very daunting. It is no surprise that because of the increasing amounting costs, office space can be one of the biggest expenditures for start-ups, with the average cost of UK office space rising to nearly £170 per square foot.
The right research = the right place
Even though the thought of office space can be daunting there are possible ways to navigate this maze and the key thing to carry out first is some due diligence, which explores the various options that are out there and available for your business.
It’s important at this stage not to assume that you have to opt for the most expensive London-based options, which many companies think is necessary. Many offices based in London also have long lease times, which can be very costly too. Instead, to keep your costs down, especially in the early stages of development, a decision about its location should be made solely on the needs of the business.
First of all, think about how your business model actually works. What will it need from a working space for it to be successful? For example:
- Where are your potential customers based? How will they connect with your business and what it offers?
- What sort of travel infrastructure will work? Will it be more important to be near an airport or even a train-line or will your business need to be located in the capital?
- Do you need to consider space for product storage and distribution?
- What technology resources will be required?
The questions you need to ask yourself will be dependent on the type of business you have, however, the above are just some key things to bear in mind when you begin to make a decision.
The right environment for the right people
Location is key for a business, but you shouldn’t overlook a business’ most vital ingredient – its people. The right space will need to accommodate not only the current team but also allow for a growing team too. As the business expands and develops then the office space will need to be flexible to accommodate for this.
Sometimes less can be more. Many start-ups are usually run by one or two entrepreneurs and they need just as much investment and access to the right infrastructure as larger scale enterprises. Yet, that said, they don’t need to be paying for acres of space they don’t need.
This is where business incubators can play a critical role within the start-up community. There is a network of business incubators throughout the UK all dedicated to providing support and resources to help early-stage businesses achieve success. Start-ups or businesses looking to get to the next level of commercial development can really benefit from a business incubator’s support, no matter how much they may need. Membership of these schemes can provide an ‘entrepreneurial ecosystem’ with specialist business support and access to funding, as well as in-house support, access to mentors and finally affordable office space options, with room for growth.
Once a new business has demonstrated that its sustainable, has a proven business model and that it can meet all the Incubator’s membership criteria, it will be given access to some of the best mentoring, support and access to potential funding at an affordable cost – vital for any new start-up business.
Most incubators do not insist on imposing onerous long-term leases because their very purpose is to support and accelerate commercial growth for young businesses for a short period of time. They want businesses within the incubator to grow and move when it is commercially viable to do so.
Another key benefit to joining a business incubator is that they encourage the very modern concept of ‘co-working’, a collaborative atmosphere where new business owners can network with their peers, whether that’s within their own organisation or with any business entrepreneurs located in the same office space.
Agile innovation has now come to the fore
One way of summing up this next generation approach, to finding the right space for your business, is ‘agile innovation’. Agile innovation is essentially a process of looking at office space solutions in a more holistic way; not just in terms of square footage and travel infrastructure, but as part of the bigger business picture.
In today’s modern world, start-ups need not be constrained by location or cost and because of this, it is vital that businesses take a more holistic approach to ensure they get the right environment, ultimately to allow a business to flourish and achieve its maximum potential.
Sarah De’Lacy is Head of Incubation for the University of Surrey and is involved in both the Surrey Tech Incubator, in partnership with SETsquared, and the Surrey Space Incubator.