A new year and a new decade are upon us. This fresh chapter probably has you pondering about the next move for your business. One such decision to make is whether to lease or buy an office space. Whether you are a start-up, growing small business or long-established firm with 200+ employees, it’s something every company has to consider at some point.
2020 is as good a time as any to consider what would work best for your office. Here at Advanced Commercial Interiors, we are experienced at helping clients across the UK, from our base in Nottingham to create their ideal office space. We know there are some challenging decisions to make, especially as your company expands during its lifespan.
If you are debating whether leasing or buying an office would be better for your business in 2020, here’s our take on what both options have to offer.
Leasing An Office
Leasing an office space can include renting a building or serviced office space. The building may come fully furnished, or it may be a building that requires some conversion to turn it into a workable office environment. Similar to renting a residential property, you will normally be expected to pay a deposit, a monthly rental fee and cover any bills. You’ll also have to agree to stay there for a minimum amount of time, which may not be ideal if you’re a startup without secure capital.
Renting an office space is convenient, not least because it doesn’t require a huge upfront investment. What’s more, with companies such as We Work, it’s possible to find ultra cool serviced offices in some of the most desirable areas of the UK, that are fully kitted out ready to go. Compared with sourcing the location, design and materials yourself… it’s much less hassle!
The downside with leasing is that the space is never truly yours, making it difficult to customise it to your needs or even put down real roots. After all, if the landlord decides to sell the property or even demolish it – you’d have little say in the matter.
In the case of a serviced office, you are relying on the company staying in business for you to be able to lease that space. Plus, serviced offices can be way more costly than buying an office in the long term. Juggling expensive overheads can make it difficult to grow your business in the long term, and can put a real strain on finances if the business is under-performing.
That being said, leasing an office takes away the responsibility. You’re not responsible for sorting the fire escapes nor are you expected to pay out for faulty heating. However, it does depend on the relationship you have with your landlord as to how quickly such pressing issues will be resolved. When you have to consider bringing clients into your office space, having unresolved issues with health and safety not only looks unprofessional, it’s potentially dangerous too. Unless you’ve had previous dealings with the landlord, you can never be entirely sure what to expect and a bad relationship with your landlord could put a strain on your business.
If buying seems like too big a commitment (especially if your business is new), then leasing can make a great short term option. After all, few companies start out with the capital needed to purchase a building as well as all the other costs associated with getting a business up and running. There’s also no reason why an established business can’t lease long term either, however you will be fore-fitting the ability to customise the space as your company develops.
Buying An Office
There are many benefits to buying your own office space. Firstly, you no longer have to deal with a landlord which although means more responsibility, it also means you can change the building as you wish. We’ve helped many business owners do just that from providing general refurbishments to creating mezzanine floors to totally open up the space. There’s endless possibility when you own the building and are in charge of the decision making, compared to when you are just leasing it.
Owning an office requires a large upfront investment, which by far is the biggest downside especially if the property prices in your area are expensive. However, either way, you look at it an office space is going to cost you money, whether you buy or lease. The different with buying is that each payment you make goes towards owning the building outright, as opposed to hiring the space for a particular length of time.
As with most property, the price of your building is likely to appreciate over time, meaning as your business grows there is the potential to sell the building and move into larger/more modern premises in the future, with a healthy return on your initial investment.
When you own an office, it’s yours to really make your own. Aside from renovating it completely to keep up with your changing business needs, it also gives your business real roots in the community you’re located in. If clients are actively visiting your premises, this couldn’t be more important.
To sum up
Whether you buy or lease an office space, each option has its own pros and cons. Ultimately, it comes down to your specific company to decide whether it would be better to have something short term through leasing or to find a property you can truly make your own through purchasing a company space.
Here at ACI, we specialise in helping companies transform their office space to realise its full potential. If you’d like to find out more, call us on 0115 939 7572 with any questions you might have! We’re more than happy to help.