This week in our business on a budget advice series: find out how to negotiate, avoid brokers' fees and use the latest online tools to slash office costs.
Andy Yates, entrepreneur and director of Huddlebuy.co.uk gives Real Business readers regular top money saving tips to help business owners save thousands of pounds.
This week: How to slash office costs.
This week in our Business on a Budget series, we have a few invaluable tips for you to save you money on your office rent.
Tip 1: Be on top of the online market
Online research can give you a head start when taking on the heady task of finding office space. Office Genie specialises in space for small businesses and start-ups, including shared offices, serviced offices and rented offices.
Officebroker has some comprehensive listings and account managers that negotiate on your behalf. Also, don’t overlook services like Gumtree as a resource. Remember to sort your search results by private listings to avoid high agent rates.
Some careful online research will give you a good picture of what is out there and how much it costs - vital when it comes to…
Tip 2: Good old fashioned negotiation
The chances are you are going to have to negotiate with an estate agent or office broker at some point - especially if you are looking for permanent space. Here are some tricks of the trade:
- Don’t put all your eggs in one basket. There is a fair amount of availability at the moment, given tougher economic times, so don’t shy away from tough negotiations.
- If time is on your side, play the waiting game. Be patient and find out whether the office brokers/owners really want your business.
- If time is not on your side, use urgency as an asset. Say you can move in quickly if they can move on the price. A bird in the hand may be worth two in the bush for a landlord keen to get some rent coming in during lean times.
- Blame the boss. Stick to a budget, say the boss or shareholders won’t budge and see if the landlord will.
- Many landlords have to pay business rates on empty office and commercial space so they are losing money every day. If you find an area with lots of empty office space you could be in a great negotiating position.
- Even if a landlord won’t budge on the core price, try and get extras thrown in such as communication and telecoms costs.
- Try and go direct if you can - office brokers can add a 10-15% fee to the price.
Tip 3: Hot desk for hot savings
Whether you are a start-up, a small business, working virtually or just need a bit of extra space, hiring a desk can be a useful and flexible alternative to going all out for a new office. Collaborative space websites such a Deskwanted, Spaceontap, Officegenie and Rentadesk are useful starting points. In London, for example, Central Working combines a coffee culture with commerce, Techhub and Innovation Warehouse cater to start-ups. Whoever you choose, always check the flexibility of contracts, opening hours, what is included in the price and any added extras.
Tip 4: Meet your budget
Rather than forking out on expensive offices in the middle of town, there are other options to consider. You can hire meeting rooms when you need to woo those all important clients. Take a look at these deals: Deal 1 or Deal 2. Alternatively, you can get a prestigious address to impress - and have your mail forwarded. Business clubs are another alternative that have become more popular and widespread in recent years. Payment is rather like a gym, i.e. a one-off membership fee and a monthly ongoing fee. If you use clubs regularly for meetings, they can certainly trim your costs.
Tip 5: An enterprising solution
If you want to cut your business rate bill, consider locating yourself in an enterprise zone. A list of areas can be found here.
Tip 6: Consider sub-lets or serviced offices
Sub-letting space from others can be a win-win for both parties - and some of the websites mentioned above are great starting points. Serviced offices can also be a good alternative, with sites such as Office Genie and Regus being good places to start - but expect to pay more.
Tip 7: Forget the office
We live in a virtual world - which makes it possible to virtually run many businesses from wherever you are in the world. Conference call services through the likes of PowWowNow and Skype make remote working so much easier than it used to be. The coffee shop WiFi culture is in full swing across the UK and Work Snug is a useful service to find your local laptop hangout. Roaming dongles are getting cheaper and cheaper. All in all, home working is far easier than it used to be - so it is a brave new world for office space and if you are prepared to embrace it, you can save thousands.