Working from home as you build your business is great to start with as your creative juices flow, however it can quicky become limiting for your business especially if you have come as far as hiring people. If you’re ready to give up your kitchen table or living room sofa and start renting an office, we can help you navigate the end-to-end leasing process so you can focus on what you know best – growing your business.
Whether you’re a seed stage or Series A start-up or have raised additional funding rounds, start-up office space in Sydney can be overwhelming and a tricky landscape with a lot of negotiations to consider. Here are the 4 most important things start-ups should know before signing their first office space:
1. What your office space says about your business
Brand identity and credibility are the emotional connection that your team and clients will have with your brand. Meaning your physical office space is a first impression for your brand and vision that customers, employees, investors or visitors will form. Fortunately, you have a choice in the type of space that will most benefit your business:
- Coworking space: This is a popular choice amongst start-ups as it allows you to take a short-term commitment from a couple months to longer. Coworking spaces such as WeWork, JustCo, Hub Australia and Tanks Stream Labs, all provide a ready to go environment that is fully furnished and well designed. As you only need to sign a license agreement, you won’t need to worry about a lawyer reviewing your lease agreement. You will also be surrounded by like-minded entrepreneurs and start-ups.
- Sublease space: Subleases are a great way to maximize value for start-ups looking to secure office space. Especially since the pandemic hit as workplaces adopted an agile approach to working and no longer required their full floors and large spaces. Like any space, subleases run the full spectrum from brand new and beautifully fitted out to the more simple and minimal style. A sublease agreement is required so you will likely need to engage someone to take a closer look at this for you.
- New direct lease: A new direct lease is ideal for a start-up looking for longer term space of 3+ years and where you may be looking to modify an existing or fitout a new space to specifically meet your business requirements. There are more options to negotiate a good deal with the landlord to say cover a portion of the fitout costs.
Coworking space
2. The employee experience in and around your office space
We have learnt from assisting many of our start-up clients, that what surrounds the office space is imperative to attracting and retaining best talent in a competitive market and ultimately supports your business growth and opportunity.
Location plays a big role as people look for more convenience around their already busy work-lives in a post Covid world. Public transport, recreational spaces and restaurants all contribute to an attractive modern workplace and ultimately employee morale. Parking should be its own key factor if your business relies on client or customer interaction.
Surrounding yourself with like-minded people is key for Founders. Considering building and landlords with start-ups in their portfolios is key. These landlords will be more accustomed to the relative risk of a startup tenant, understand and be willing to adapt for uncertainty with respect to growth, and be more comfortable with startup financials. When you’re a startup, landlords want to “win” your business and grow you within their portfolio, but they also have varying levels of comfort with your relative “risk”. It’s important to understand which buildings and landlords are experienced with startups, as this will have a direct impact on the economics of your deal. Alternatively, consider joining a coworking space like WeWork, JustCo, Hub Australia or Tank Stream Labs.
Facilities also play a key role in employee experience. An A-grade/premium building will have state-of-the-art facilities while a B or C-grade building will have adequate to minimal facilities. Consider how your business operates and what facilities it would benefit from such as shared meeting spaces, day care services, outdoor areas and end-of-trip facilities. Access to these facilities and services will contribute significantly to the overall productivity of your team and ease of business operations.
3. Being optimistic and realistic about your future growth plans
Flexibility is key in the start up ecosystem and engaging with landlords who can provide for both growth and, on occasions sadly, contraction should be key in any decision making process – real estate as a fixed cost is a significant part of your business operational expense and being saddled with space you do not need reduces your ability to use cash for development and growth. This is where considering flexible co-working space or shorter terms subleases can be advantageous.
4. Should we talk about negotiating the right lease terms
Considering an office space for your start-up also means negotiating your lease and future makegood obligations which can in themselves be significant. Whilst an independent tenant advisor is best to assist with this, some start-ups choose to look after this themselves and may be deterred from what could have been an ideal location due to unfavourable asking terms. Taking good, independent professional advice will ensure you negotiate fair and flexible lease terms matched to your business needs, this is where we can help save you money and make the right choices to meet your start up’s fabulous future as hopefully you grow to be that next Australian Unicorn!
If you’re looking to take the leap out of your living room and into a space that provides opportunity and supports your business growth, we’d love to help. Contact Mike Franklin on +61 416 985 650 or [email protected]