Most businesses eventually need an office, but leases can be incredibly expensive. Depending on the nature of your business, your rent payment could wind up being one of your biggest monthly expenses. Fortunately, there are several strategies you can use to save money on your office lease.
First, start early. The sooner you start looking for an office, the more time you’ll have to carefully review your options, negotiate terms, and consider alternatives. Additionally, you’ll be under less pressure. If you wait until the last possible moment to begin looking for an office, your range of options will be limited, and you could be forced into a bad deal.
Hire a Professional
Next, consider hiring a professional who can help you find a better office space and negotiate more aggressively on your lease. While most commercial real estate experts will charge money for their services, you’ll often save money in the long run by hiring one.
Many entrepreneurs get excited about the notion of leasing their first office, and they speculate about the type of office they might need years down the road. This leads them to move into massive offices, with far more space than they truly need. This is a problem, since most office leases are calculated at least in part based on available square footage.
One simple resolution here is to downsize. Instead of moving into the office you might need several years from now, move into the office you need today. This might limit your growth, or force you to move in a few years, but it could save you a lot of money. Similarly, you might skip some of the optional features you desire, netting you a lower price.
Move Outside the City
If you’re like most entrepreneurs, you’re interested in moving into the downtown area of a big city because it is centrally accessible, serving as a central meeting point for all your employees, and may also get you closer to your ideal clientele. However, the bigger and more populated an area, the higher its rent costs are going to be. It may be in your best interests to move outside the city to the suburbs or a lesser-known area of town. Obviously, there are some drawbacks here; you may not have as much foot traffic, and you may be further from your clients, but you’ll definitely save money on your lease.
If your contract allows it, you may be able to sublet your office space. In this arrangement, you’ll be responsible for the full cost of the lease, but you’ll have the option to host another tenant (such as another business) in the space. Your secondary tenant can pay you a fraction of the rent, offsetting the costs to you. And depending on the nature of your businesses, this could even turn into a kind of symbiotic business relationship.
One of your best tools for scoring a better deal on your lease is to negotiate the terms. Sometimes, simply asking for lower rent is enough to help you get it.
- Understand supply and demand. Consider leveraging the power of competition; get rent prices from other office spaces nearby, and be prepared to use them as part of your negotiation.
- Be confident in your assertions. The more confidence you exude, the more likely the negotiation will go in your favor. Don’t be arrogant or rude, but have faith in your fact-based arguments.
- Talk about what you bring to the table. Make the lease seem favorable to the landlord by stating what you bring to the table. Are you going to be here for years? How will you improve this property?
- Consider additional perks. If you can’t get a lower rent price, consider pushing for additional perks, like free parking.
- Strive for flexibility. No matter what, try to build more flexibility into your lease, so you have more options down the road.
Go Fully Remote
These days, it’s possible for many businesses to work fully remotely—in other words, they can get by without an office. There are many benefits to this approach, including nonexistent rent costs and office expenses, as well as higher employee morale and productivity. Think carefully about whether you truly need a physical workspace for your company to function efficiently, and consider adopting a fully remote model if possible.
Not all businesses will need a physical office space, but if yours does, you’ll need to carefully consider your needs and plan your search carefully to get the lowest possible rent price. Even a small amount of effort can help you get a better deal, which could ultimately save your business thousands of dollars a month. Don’t underestimate the value of this process.