A staggering 90% of startups fail. In those first few precarious months of a new business, being able to grow and adapt can be what separates the 10% that make it with those that don’t. As a business owner you want your startup to succeed, but that means understanding your financials and making clearly calculated spending decisions.
So, what does this have to do with your office? Sleepwalking into a permanent office you can neither afford nor necessarily need might just suffocate your business. Instead, using a serviced offices could be advantageous, allowing you to not only save money, but save your startup from early collapse.
Serviced offices are a genuine alternative to the crippling costs of a permanent space. Here’s how you can use serviced offices to make financial savings that’ll help your startup survive.
Find service office space outside of London
Most landlords in London demand a 3 to 5 year lease, making it a huge gamble for any startup to choose a permanent office space. On top of that, the UK’s upcoming 2017 revaluation has worried business rates experts. Many young entrepreneurs may start to wonder whether the costs of setting up a startup in London may soon outweigh the benefits.
Yet, it isn’t just startup costs that are changing the way we rent. With long leases on permanent space and increased prices in big cities like London, many startups are casting a wider net when it comes to selecting a location for their business.
Serviced offices provider Easy Offices suggest that the North might be the answer for startups, especially for those looking for lower cost spaces who aren’t tied to the capital. Of course, this will only work largely for those who can work remotely or have more online based businesses.
Use co-working spaces when you’re in the city
The lifespan of startups can be unpredictable, that’s why more and more new businesses are using alternative working. In 2017 the number of coworking spaces worldwide will hit around 10,000, as opposed to 3,400 in 2013, if we continue at the current rate.
Some serviced office providers will also offer co-working spaces; which equates to desk renting. This can help you to slim down investment costs within big cities, offering you a space for a week or month, while using a cheaper out of city serviced office for the majority of the year.
Rent in smaller periods to explore a city
A recent study by Vonage found London tech startups are far more likely to survive in Hackney than the neighbouring borough of Islington. Committing to a certain area for a long period of time can therefore be disastrous for a new business if you haven’t researched survival rates.
Using serviced offices can allow you to try a couple of months in each location, on a single membership, until you find the best area for your industry. This will keep your committed spend down.
You can try more costly areas for a few months without committing long term, then balance with a cheaper area for the next period. Small startups may not be able to afford a long term contract on a property, but they’re flexible.
Get a space just for meetings
If you’re a startup that hires less than 10 full time staff you should consider whether you actually need an office at all. Working remotely is on the rise, with experts predicting half of us will be doing it by 2020.
Being versatile with your space will not only save you money, it might actually make you more productive. At the very least you might save some of your sanity by avoiding the dreaded daily commute.
Alternatively, virtual offices can give startups the coveted address of a big professional outfit but not the stifling costs. If you need to hold meetings you can rent rooms, when and where you want, on a daily or even hourly basis. This way you spend the least on actual rented space.
If you can find the right balance of serviced office space, rented desks or meeting rooms, to suit your startup, then you’ll be much more likely to flourish. Being the 10% of surviving startups is a tough gamble but one where careful financial planning and serviced offices can make all the difference.