Chris Carmen / March 22, 2018
This is the question we’re often asked by Indy entrepreneurs contemplating or starting a new venture. The reason? Because there are no hard and fast rules that define when is the right time to move to traditional office space.
How Does a Startup Select an Office?
As a result, it’s not uncommon to see startups signing office leases before the ink is dry on organizational documents, or ten employees crammed into the founder’s garage. Bootstrapping in someone’s garage may have a certain cache, but at some point, the productivity of the organization will be lost to the “coolness” factor of the garage and ultimately, when the startup goes under….it just won’t be that cool anymore.
Strategic planning in a startup environment can be a dynamic process because so many operational factors are ever-changing. The same applies to the office space question. Entrepreneurs have to be conscious of employee productivity, the efficiency of operating from non-office space and the culture developing around the business, in order to recognize the right time to pull the trigger on the new office space.
At the same time, it’s imperative to operate the new venture within budget. Let’s face it, most startups operate on limited funds and have to be careful to budget spending in order to get to the next round of funding or to the point of generating enough revenue to cause positive cash flow.
Spending startup funds on office space will inevitably be taking funds from other aspects of the business, i.e. hiring employees, buying or leasing necessary technology, etc. There is a careful order that entrepreneurs need to find while operating their startup.
In a recent article on TECH.CO, When Should Startups Move Into Physical Space, a number of entrepreneurs operating startup tech companies were interviewed for their thoughts on when is the right time to move to office space. Regardless of where the startup is located, many entrepreneurs seem to have the same considerations and concerns about office space.
Entrepreneurs should seek the guidance of commercial real estate brokers that specialize in representing tenants. Tenant Advisors, like CARMEN, can provide startup entrepreneurs with much of the same guidance provided to larger and/or more mature organizations.
CARMEN places special emphasis on counseling the early-stage organization or entrepreneur in order to help them understand key factors that should be considered when deciding to lease office space. Our commitment to growing the tech community in Indy is reflected in our approach: we work to help startups thrive by helping entrepreneurs make better decisions.
Are you considering making the move to your first office?
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