To explore those common elements and to learn more about what a good commercial lease should have in it, see the real property lease checklist in the Business Tools area.
The ultimate success of the business can hinge on where it's located; there are many options to consider for finding just the right space for your startup.
Deciding where to open your new business is often one of the most difficult decisions a business owner faces: the ultimate success of the business can hinge on it. You'll need to decide whether to lease office space or work from home, while also considering the best possible geographic location for your business. Then there's negotiating a lease for your office or business establishment, if that's your eventual decision. And don't forget the possibility of using business incubators to locate and grow your startup.
Before you decide whether to lease office space or work from home, you have to determine exactly what your facility needs will be. In some cases, your facility needs will be such that you'll have to lease office or commercial space. In other cases, your facility needs may be minimal and you can work from home.
If you have a choice, and all things are otherwise equal, you should probably work from home, primarily because it's a lot cheaper than renting office space and you will have less to lose if your business fails.
Unfortunately, your decision probably won't be that easy. The list below identifies some of the questions you should answer when making your decision:
For a further exploration of the choice between working from home and leasing office space, see our discussions of businesses that work out well from home and government restrictions on business use of a home.
An important factor in selecting a location is that you keep a long-term perspective. Site selection and acquisition can be a big investment. Choosing the right site now can avoid the costs of relocation in the future.
Here are some factors that should be considered when making your site decision:
For additional information, see common needs of small businesses.
If you decide that you want to lease office space and you've found a location, the next step is to negotiate a lease agreement for that location. A lease agreement is a contract between you and the property owner. Since this is a legal document, you should have your attorney review it before you sign.
Lease agreements will vary, so there's no way that you can anticipate every issue that might arise. That's why it's important to thoroughly review the terms of the specific document you're being asked to sign. All commercial leases should contain certain basic provisions with which you should be familiar.
To explore those common elements and to learn more about what a good commercial lease should have in it, see the real property lease checklist in the Business Tools area.
A lease agreement is generally a long-term commitment for your business. View it as a planning opportunity and keep in mind the following points:
In some situations, you may be better off buying office space rather than renting it. For more information on that decision, see should you rent or buy?
If working from home is not a possibility and you're operating on a shoe-string budget and can't afford to rent office space, consider a business incubator. A business incubator is a facility that provides economical space, business services such as typing and copying, some management advice, and possibly financial assistance.
Business incubators are owned and operated by a wide variety of entities and sponsors, including local government, universities, economic development groups, state government and a combination of sources. They're located throughout the country, and there's probably one near you. To find the one closest to you, contact the National Business Incubation Association.
As their name implies, business incubators are designed to nurture small businesses until they are able to exist on their own. The main benefits are the inexpensive office space and the access to business services.
Private companies are also in the incubation business. Be careful if you're considering one of those companies because they, unlike the nonprofit agencies, are in business to make a buck from you. They may try to force you into a long-term lease or other commitment that will hinder the flexibility of your business. Also, their managerial assistance may be useless or nonexistent. Before you agree to pay for a private incubator, talk to your attorney.
Also available are businesses that provide leased office space. They provide office space and all of the associated services, such as a receptionist, meeting rooms, online access, and the other things that you might need to run a business. They are an attractive alternative when a home office isn't feasible and an incubator isn't available or doesn't fit your needs.