So you’ve got an idea for a startup. You’ve mapped out a business plan. You’ve secured capital. You’ve assembled your team. Now for the hard part: finding startup office space.
If that wasn’t daunting enough, add in the extra variable of finding startup office space in New York City, and you’ve got a monumental — and potentially expensive — task. What’s a budget-savvy entrepreneur to do? Let us help.
In this article, the office space experts at Bond Collective guide you through everything you need to know to find the best work environment for your startup.
Startup Office Space: Factors To Consider
When shopping for startup office space, begin by calculating the minimum size of your working area. Allow for at least 100 square feet per team member. That works out to a 10-foot-by-10-foot space for each person. If your team is ten people strong (including you), you’ll need at least 1000 square feet of office space.
Next, consider what space you’ll need for technology (copiers, printers, servers, etc.), break room, bathrooms, reception, lounge, and storage. Add in those office essentials, and it’s easy to see how quickly you’ll need to double — or even triple — the basic 100-square-foot-per-person startup office space.
2) Occupancy Costs
Many entrepreneurs find the perfect-sized space and fail to factor in the occupancy costs. These hidden expenses include vital infrastructure, such as:
Without these, your startup isn’t going anywhere. Be sure to ask for a utilities report before putting up a down payment on your ideal office. Occupancy costs can easily double the price you pay for the space alone.
When you own or lease your startup office space, it’s up to you to decorate the interior. You want your team to feel comfortable and enjoy coming to work, and you want your clients to be impressed with your professional image.
Given these considerations, you might decide to hire a decorator to help you make the right office design decisions. That can get expensive very quickly.
Don’t forget to set aside money for the upkeep of the exterior of your building. The landlord or property owner will often cover major repairs, but if you need a sign, for example, that comes out of your pocket.
If you want to tweak the facade of your office so that your clients don’t get the wrong impression when visiting, you’ll have another hidden expense of finding startup office space in New York City.
It may not seem like it at first, but neighborhood plays a big role in the success of your startup. It’s the very first thing your clients see, and it provides dining, nightlife, and other services for your team members.
Depending on the terms you negotiate with your landlord, you may be responsible for property taxes at the end of the year. One common arrangement is for the landlord to pay the property taxes for the first year. After that, you pay part or all for the remainder of the lease.
Be sure to ask about any and all relevant taxes before signing a contract so that you’re not blindsided by surprised fees.
Will you need more or less space in the coming months? If your office doesn’t have a conference room, will you need one soon? These questions all speak to the issue of flexibility.
Even though you may have plenty of space right now, it can be incredibly difficult to expand (or contract) a leased office should the need arise. Generate a best- and worst-case scenario for your business, and shop for startup office space with those extremes in mind.
8) Total Lease Amount
Be sure to take into account any interest applied to the terms of your lease and identify any hidden fees before you sign on the dotted line. These extra expenses can have a dramatic effect on the total amount of your lease.
The Cost Of Leasing Your Own Startup Office Space
Let’s look at a hypothetical situation to get a sense of the effort and cost involved in finding your own startup office space.
We’ll simplify the variables somewhat by assuming that the space is located in a desirable neighborhood like Midtown (e.g., 5 Manhattan West), and that the space is move-in ready (e.g., no redecorating required).
For 2,500 square feet, you’re likely to pay at least $15,625 per month. That breaks down to $2,500 per month for a 400-square-foot office (20’x20’), or $625 per 100 square feet (the minimum per-person space we mentioned earlier). Multiply that by 12 months, and you’ll pay $187,500 per year just in rent for your office space.
Rates may decrease depending on where your startup office space is located, but you’ll still have to factor in furniture, technology, decorations, modifications (interior and exterior), and any infrastructure your business might need that isn’t already established.
If those numbers seem a bit daunting — and perhaps out of reach for your startup — there is a better way to get the office space you need without the sky-high overhead and long-term commitment.
Coworking: The Best Way To Find Startup Office Space
Let’s go back to the eight factors that we discussed at the beginning of this article and see how coworking satisfies them all.
Coworking spaces like Bond Collective offer a wide range of square footage to fit all your needs. Take advantage of open-floor-plan coworking spaces, dedicated desks, private offices, and even conference rooms. Coworking office space has it all.
2) Occupancy Costs
At a coworking space, occupancy costs like heating, cooling, lightning-fast Wi-Fi, water, and cleaning are often included in your basic monthly fee.
With a coworking space like Bond Collective, you don’t have to go through the hassle (or expense) of redecorating. Each and every office environment is decorated to the nines. Your team will love working there, and your clients will be impressed with the professional image your office conveys.
Just as with the interior, there’s no need to worry about the exterior of your startup office space when you opt for a coworking environment. That expense is taken care of for you.
Coworking spaces are located in a wide variety of desirable neighborhoods. Bond Collective, for example, gives you access to Bushwick, 55 Broadway, 60 Broad, Gowanus, and Flatiron, not to mention an event venue (The Mezzanine) in the heart of the Financial District.
Operating your business out of a coworking space means that property taxes are not your responsibility.
When you lease your own startup office space, you’re locked in for the duration of the contract. That can cause serious problems if your revenue stream dries up. And let’s not forget how difficult it can be to upsize or downsize a leased space.
With a coworking space like Bond Collective, you pay by the month for only what you need. Want to expand or contract? Simply talk to one of our friendly community managers and they’ll make the transition easy.
This is where the difference between leasing your own space and renting a coworking space is most obvious. With a leased space, you’re on the hook for all the variables on this list. With a coworking space, everything is included in your membership.
Where you might pay $2500 for 400 square feet (e.g., a 20’x20’ office) in your own building, a coworking space of the same size might only cost ⅓ as much (or even less).
Help Your Startup Succeed
Don’t let the difficulty and expense of finding startup office space in New York City prevent you from taking your business to the next level. Give your startup everything it needs to succeed by reaping the benefits that coworking spaces have to offer.
Tour our gorgeous office spaces in New York City (55 Broadway, 60 Broad, Gowanus, Flatiron, and Bushwick) and Philadelphia (Station House) to experience the best in modern coworking. Then become a member of Bond Collective to take advantage of our coworking spaces, dedicated desks, and private offices.
To get started or to learn more about coworking space benefits for digital nomads, startups, remote workers, and businesses of all sizes, visit BondCollective.com today.