How and Where Should a Small Business Set Up Office?

A key question facing all new small businesses is where to set up the office. The answer to this depends largely on the financial resources of the small business as well as whether it requires a large or small office space.

Leasing Office Space

One of the most popular office options for any small business is to lease the required office space. Here's why:
  • Taking on an office lease can save your small business time and money. Owning property can be much more expensive than a lease and take up a lot of resources that could otherwise be spent on growing your small business.

  • By taking on a lease for your small business office space, you are freeing business money to be used on other matters that are more important to the development of your small business.

  • Buying office space as opposed to taking on a lease in a prime location can be prohibitively costly, particularly for a new small business. By taking on a business lease it may be possible for a small business to secure a prime position that is vital to the success of the small business.
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Purchasing Office Space

That is not to say that there are no benefits in purchasing office space, as opposed to taking on a lease. The advantages of purchasing office premises include:
  • Commercial mortgages allow a small business to budget for set monthly payments without the risk of increased rents commonly associated with office leases.

  • Owning office space gives a business the option of sub-letting part of the space to another business, thus increasing the small business income. Any lease income, however small, will be useful to a new small business in the early stages.

Other Office Space Options for a New Small Business

Although taking out a lease or outright purchase are the most common means for a small business to secure office space, other options should also be considered.

Business Incubators: Business incubators are a recent idea to help new small businesses survive and grow. An office unit with sufficient space to meet the business' needs is provided to the small business along with shared office facilities and office equipment. In addition, a business incubator also offers business management and technical advice, when required.

Enterprise Zones: Enterprise zones are areas set up by the government, which enable businesses to lease office space at a low rate and enjoy substantial tax breaks. This option is available to large, medium and small businesses, although space is limited and finding an available lease in a location suitable for your business may be difficult.

Office Sharing: By sharing office space with another similar business a new small business can benefit from sharing established office facilities and maybe even an established business client base.

Home Office: Many entrepreneurs are now opting to create office space in their home. For a new small business this can be a safer option, as there is no need to sign an expensive lease agreement. However, other costs associated with setting up a business office may be incurred such as Internet and phone connections.

Whichever way you decide to create office space for your small business, make sure that you are fully aware of your small business' legal responsibilities should anything go wrong. Get professional advice before signing any lease or mortgage.