Should You Invest in Office Space for Your Business?

In the current job market, many skilled and knowledgeable workers are finding themselves unable to get the kinds of employment they’re trained for. As a result, some have turned to alternative methods of earning in order to continue growing their careers and bringing in the money needed to pay the bills. So it’s no surprise that the number of independent contractors and small business entities has grown over the last few years as unemployment rose. But now that the economy is starting to improve, you may have found that your home-based startup is also growing. As you have become established and taken on more clients, you’ve probably hired on employees to keep your business up and running. And whether you’re worried about the liability of having your staff in your home, you’d like to consolidate remote workers, or you’re tired of meeting clients at coffee shops, perhaps you’re thinking about investing in office space. Here are a few things you’ll want to consider before you take the plunge and sign a lease.

The first thing to address is the cost of such an endeavor, and office space can be pricy. You’ll have to pay not only for a lease, but also for utilities and probably a variety of insurance policies. Having employees on the premises will require you to carry workman’s compensation in case of accident or injury at work, and if you host clients, vendors, or other outsiders that aren’t on the payroll, you’ll also need liability insurance. In addition, you may want to make over your office space, you’ll certainly have to shell out the money for furniture and equipment, and you’ll probably want to secure signage so people know you’re there. That’s a lot of up-front and ongoing expense to deal with, so you’d better be sure your budget can bear it.

Next you’ll want to consider what you stand to gain from leasing an office space. Since you’re shelling out so much money for it, there better be some kind of profit inherent in the move. Will it allow you to hire more employees and take on more clients? Will it make your current employees more productive? Will you be able to hook higher-paying clients or perhaps a business partner because of a more professional atmosphere for operations? While you’ll have no trouble listing your expenses when you opt to get an office space you might have a much harder time detailing the gains to be expected from your move. So you’d better put some thought into potential benefits before you start spending your hard-earned cash on what could be a pipe dream.

The long and short of it is that you may need office space in order to expand your business and create new opportunities for growth. On the other hand, you might do well enough by simply working out of your home and hiring a remote workforce. It all depends on the type of business you run, how you want to manage it, and your goals for the future. If you’re not sure you could always lease a temporary office space in NYC, LA, or whatever city you call home. But generally speaking you can probably figure out whether or not you need office space by considering the type of business you run.

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