How to Find the Perfect Space for a Tech Start-up
Where will your start-up’s story start?
You want your first office to be affordable, yet scalable for when you start to scale operations. You want it to be cool and inviting so you can attract a high level of talent, but not at the expense of practicality.
The right space can be crucial in launching your tech business, but the wrong space can almost single-handedly bring you down.
With that in mind, here is what you will want to consider.
Beware Heritage and Classic Buildings
There is something instantly appealing about old heritage buildings and new tech companies coming together. Combining exposed brick with glass doors and new technology seems to create the perfect dichotomy.
However, trendy can be a headache. This old building is going to come with some concessions. For example, unless a serious retrofit has taken place, the building’s infrastructure could be lacking. This means less-than-stellar wiring could mean living with spotty internet, or an old A/C system could mean some hot summer days.
Living with these things is one thing, but paying for them is another. The landlord may ask you to take on too much. If this is your first space, you may be wondering what a triple net lease (NNN) is and is it right for my business?
Basically, a NNN means you will receive a great monthly rate (which is tempting) in exchange for you paying for most of the other expenses such as upkeep, taxes and maintenance. This may seem like a great deal at the time.
However, it seems like less of a bargain when you get someone in to look at the building’s wiring to boost your internet speeds. You then find out the building isn’t up to code and you now have to pay for a total re-wiring.
The space likely won’t be exactly what you need on Day 1 and that’s OK. Your landlord will likely offer you some sort of tenant improvement allowance to get the facilities where you want them.
However, keep in mind that this allowance is really reimbursement. You will have to spend the money on upgrades yourself and receive the money back later. This can lock up too much of your cash flow if you’re too focused on upgrades.
Your best bet is actually to negotiate for a cash allowance from your landlord, which would simply be an agreed-upon amount of money (per square foot, typically) to invest in upgrades.
Keep an Open Mind about Open Concept
Open concept is very popular with start-up companies for a number of reasons. First of all, it’s very scalable. You don’t have to find new offices for new employees. You simply have to rearrange the furniture. Also, there’s a widely held notion that open concept means open communication. No walls means no barriers.
However, keep in mind that not everyone likes open concept and some people want those walls. They need the ability to lock into their work with some peace and quiet, or they need privacy for phone/ conference calls.
You may feel rushed to find an office, but do not rush this decision. Take the time to make sure you get a good space and a good lease. Otherwise, this space could cost you a lot more than you think! A bad lease can soon turn your dream office into a nightmare.