If one played a game of word association with the term ‘startup’, the first response is likely to be ‘garage.’ It’s an enduring image, isn’t it? Walking into a dusty garage or back room and turning it into an office is something that most entrepreneurs end up doing. But what happens when you want to take your business idea further? Any notion of scaling up is usually accompanied by some hiring of new talent. And eventually, there comes a point of time when working out of home ceases to be an option.
As a startup, one has limited means and hence, it is not viable to rent out vast tracts of carpeted corporate shelter in an up-market location. However, that does not imply that your first office needs to be a hole-in-the-wall joint. The key is to strike a balance between the most productive atmosphere for your team and the best price. We at YourStory answer some frequently asked questions about renting office space.
When should one rent an office?
It’s obvious that staying virtual / working out of home is the best thing to do, for as long as possible. It’s terribly difficult to put away resources for rent, especially when there’s no funding. But this is sustainable only as long as the core team members are very familiar with each other. Otherwise, a virtual workplace is not the best arrangement. When the money starts coming in and looks like it will continue to come in, it’s time to move out.
How can one find good, inexpensive office spaces?
It’s not easy. But it’s definitely not impossible. Some of the startups we’ve covered have great offices which don’t blow a meteor-sized hole in their pockets. The idea is put the word out. Speaking to other entrepreneurs and keeping an eye on internet listings really helps. Also, do write on forums meant for entrepreneurs. You never know when you will find your dream workspace. So, it’s important to never stop looking. You can look at approaching a real estate agent. But seldom do they point out places for less than 10 people. Also, there’s a commission that you will have to pay. Keep these in mind if you plan to go down that road.
Is sharing an office with other startups a good idea?
It can be. It is a popular concept in Mumbai, given the absurdly expensive real estate prices there. The advantage of sharing a workplace is that you get to share costs for rent, electricity, Wifi etc, thereby reducing the burden. It is an opportunistic agreement that can be mutually beneficial. The flipside is that it’s never going to be anything more than a stop-gap arrangement. Eventually, everyone likes to have a place of their own and if you’re not the one who’s moving out, there can be some stress till you find alternatives.
What are the parameters to evaluate a potential office space?
Here’s our list:
1) Savings – Notice how we’ve termed it ‘savings’ and not ‘rent’ or ‘money’. Because that is how it ought to be approached. Evaluate how the place you’re looking at can help you save on your total outlay.
2) Location – If all your clients are in one part of town and your domain requires you to meet them often, it makes sense to find space in that area. Being close to public transportation and food outlets makes life easier.
3) Productivity – These days, there are a number of ‘plug-and-play’ options designed exclusively for startups and entrepreneurs. They come with desks, power backup, internet, ventilation, security and everything else required to create and bolster productivity. If you’re not looking at an option like this, create a checklist and ensure that the basics are in place.
4) Terms & Conditions – Go through the agreement with a fine comb so that there are no ugly surprises. Understanding your requirement clearly is vital. For instance, if you’re a tech startup, 24x7 access to the office could be required as developers tend to be more productive post dinner.
We at YourStory wish you all the very best. Do send us your feedback and comments.
Sriram Mohan | YourStory | 8th November 2010 | Bangalore