An
“Outsider” Discusses Officing Options
Published Tuesday, July 16th, 2013,
by Sue Saldibar.
You have read some excellent
Expertorials on Officing Today written by Brian MacMahon, Your Office Agent
CEO, on subjects involving business centers and alternative workspaces. Brian
recently passed along the article below, which I would like to share with
readers. It was written by Jennifer Grady, an attorney and associate of
Brian’s, who explored the various “officing” options available and has provided
her take as to what they are and when each of them is appropriate.
If you are a business center or
coworking space operator, you are an insider, living and breathing business
centers every day. There is a tendency to forget that, while we are all well
acquainted with the various types of offices and the latest trends, most
business owners, entrepreneurs and start ups are not.
I hope you will read this article
and learn how an attorney, not a business center insider, views the industry
and the officing options available. There are some great thoughts here and I
hope these “basics” will provide greater insight into key “pros” and “cons” as
seen from the outside.
Get out of your pajamas, inflexible
leases, or stuffy office space – and into a location that suits your work
style.
by Jennifer A. Grady, Esq.
by Jennifer A. Grady, Esq.
As the global economy continues to
change and evolve at a dizzying pace, with more entrepreneurs opening their own
businesses, established companies entering new markets, and employees working
remotely, the traditional office space model is about as relevant as a
dial-up Internet connection. In the aftermath of the Great Recession and with
the proliferation of e-commerce, companies can be more nimble and adaptable to
market trends because they no longer require brick and mortar store fronts or a
fixed location for their employees to be housed under one roof. Virtual
Receptionists and Assistants make the need to be tethered to a specific
location almost obsolete.
Which type of office suits your
needs? Learn more about the Top 5 Workspace Types below.
1. VIRTUAL OFFICES – Perfect for Startups and testing out new markets
What are they? Virtual Offices provide
their tenants with a “Fortune 500” company image (prestigious address and
access to conference rooms and a receptionist) for a fraction of the price of
traditional office space.
Pros – Virtual Offices are easy to set up globally, and can be
available within one to two business days. Packages start as low as $50 per
month for use of the address and mail collection/forwarding, and can cost up to
$300 for packages that include conference room rental packages and a receptionist.
Because they are so cost-effective and usually have month-to-month leases,
Virtual Offices are the ideal solution for new businesses with limited capital
and short-term business plans. In addition, they are an excellent option for
companies that are looking to expand into new domestic or foreign markets
without significant office space capital investment.
Cons – Basic Virtual Offices merely provide an address, with
optional mail forwarding, conference room rental, and receptionist packages for
an extra fee. They do not provide their tenants with an actual place to work.
2. COWORKING SPACE – An alternative solution for individuals seeking
socialization and collaboration while they work
What is it? Working from home or noisy coffee shops can
be an isolating, unproductive experience for individuals such as writers,
designers, freelancers, solo practitioners, contract employees, and Startup
founders. For the professional seeking a collaborative environment and sense of
community, Coworking Space may be an alternative to working at the kitchen
table in a bathrobe and slippers. Costs range from $100 per month to $600 per
month (including storage and group meeting space), with an average cost of
around $300 per month.
Pros – Coworking spaces provide a stimulating environment in
which to work with creative or technical types from other professions. The
added benefit to these spaces is that there is an automatic network of peers
with whom you can share ideas, learn about upcoming events, work on projects,
obtain feedback, and exchange referrals. Some locations even provide designated
work spaces, team areas, conference rooms, and storage space.
Cons – Because Coworking spaces are usually open environments
without cubicles or offices, it may be difficult to maintain privacy, have an
intimate conversation, or make confidential phone calls. However, some spaces
offer Executive Suites or private rooms for this purpose. It may also be
difficult for companies to forge their own company culture in this group
setting.
3. EXECUTIVE SUITES – Customizable work space for the professional who wants a
private office and the ability to work with a team in the same location
What are they? Executive Suites provide flexible lease options in a
designated space for professionals and their teams with the option to expand or
downsize as their staffing needs fluctuate.
Tenants on the same floor share a receptionist, conference rooms, kitchen, and
mail/copy room. Prices range from $600 to $1200 per office.
Pros – Executive Suites are located in prestigious “A”-rated
buildings and project a professional image to employees and visitors. Often,
offices and cubicles come furnished and have Internet, phone, and fax systems
included in the lease; when bundled together, they can be more cost-effective
than traditional office space cost totals. Offices and cubicles can be rented
by the hour or the day for special projects or visitors. Administrative
assistants can be hired by the half hour for overflow work. As a bonus,
Executive Suites can provide an excellent source of referrals because many
tenants on the same floor interact with each other in the hallways, common areas,
and lunch rooms.
Cons – Incidentals, such as copies, faxes, water and coffee can
add up quickly. Read the lease agreement thoroughly and look out for additional
hidden costs.
4. BUSINESS LOUNGES – Cost-effective option for the professional on-the-go
What is it? Virtual Office companies are starting to offer “Business
Lounge” options as part of their Virtual Office or Executive Suites packages,
or a la carte for a small monthly fee.
Pros – This option is valuable for people who travel frequently
and have down time between meetings, or for the Virtual Office tenant who wants
a change of scenery on an intermittent basis. Business Lounges usually provide
an open-seating arrangement with free WiFi; work space areas with outlets;
complimentary refreshments; and for an additional fee, access to administrative
assistants, concierge services, conference rooms, printers, copiers, scanners,
and fax machines. Some of these packages start at $25 per month, and can be
used at locations across town or around the world. Members located in big
cities can work from a different location every day of the week.
Cons – Business Lounges lack of privacy for conversations and
phone calls. Daily parking rates can add up quickly and exceed the cost of the
monthly membership after only two to three days.
5. TRADITIONAL SPACE – Semi-permanent space for companies that want to create
their own culture and keep tabs on their employees.
What is it? According to Brian MacMahon, CEO of CEO of Your Office
Agent, ninety-nine percent of today’s office space is still under the
“traditional” format, in which companies build out and furnish their own space
under mid-term and long-term leases. Prices range from $2.50 to $5.00 per
square foot in major markets.
Pros – Companies can construct and furnish their work area to
their own specifications, and can be the exclusive tenant of a particular
suite, floor, or building.
Cons – Most conventional lease terms are for 3-5 years, yet the
most accurate business plans can only project 3-6 months into the future. Many
Startups that have failed in the last few years were unable to survive because
they could not keep up with the monthly costs demanded in their strict lease
agreements. Most leases have minimum square foot requirements that are three
times the amount of space required in leases for Executive Suites. There are
many online services to help you locate the right style and location for your
office space. As an example, Your Office Agent (www.yourofficeagent.com)
has a database of over 11,000 properties and packages in markets around the
world.
About the author
Jennifer A. Grady, Esq. is an
attorney and business consultant who provides coaching and legal services for
entrepreneurs so they can focus on managing and growing their businesses. As a
second generation entrepreneur, she founded The Grady Firm, P.C. in
March 2012 with the goal of helping her clients take proactive measures to
avoid or mitigate costly litigation.
