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How I Lowered my Office Space Expense
By Ellen Thompson
Jun 13, 2006, 12:49
I founded Know It All, a company that provided computer training services, in 1993 as a sole proprietor. By 2000 the company had evolved into a leading producer of computer skills testing software for the staffing industry and had a staff of about 50 people. The company was continuing to grow rapidly and adequate office space was a perennial problem.
In order to keep pace with the growth of Know It All’s staff, we decided to sublease an entire floor of an A class building in downtown Philadelphia from Price Waterhouse Coopers for about $30,000 a month. Even though this was quite a deal ($15 per square foot, full service and $1 a year to use the furniture left by PWC) it still gave me heart palpitations every time I signed the rent check.
When we started 4 Walls, our internet-based apartment guide company, we were working on a shoestring and spending only what was absolutely necessary. We did some heavy outside the box thinking and realized that we didn’t need to approach our office space situation as we had in previous ventures.
First, we predicted our workforce would need to be more distributed. After all, we were building a national apartment guide, and it would be a benefit to have salespeople geographically dispersed. Second, all of 4 Walls’ founders had small children this time around, so our priorities had changed.
We assessed our needs. Yes, we could make do without a traditional office where everyone meets everyday. Everyone involved with 4 Walls was a self-starting mid to upper level professional working on independent projects. There was really no reason for us to all “schlep” into an office everyday. We did, however, need some place to send mail and to meet with a client in a pinch. Perhaps most importantly, I needed to feel confident and comfortable answering the question that virtually all potential clients ask me: “So exactly where is your office?”
The perfect solution for us was to all work from home and to rent a very small amount of space.
From our founding to now, we have rented one small office from my sister-in-law who runs a very successful law firm, and it has been the perfect low-cost solution. We have a physical mailing address, use of an office, conference facilities and some storage space that we use to store paper-based records, marketing material and trade show equipment.
When I was a newbie entrepreneur, one of the first things I did was look for office space. Did I really need it? No. If I am honest about it, I didn’t have a legitimate need for space at the time. At least in the beginning, the only benefit of having office space was that it made me feel more “important” than I did working from a spare bedroom.
After 4 startups, I see things differently. Office space is expensive, and since it always seems to take every penny I have to launch a new business, I try to avoid renting space until it’s absolutely necessary. Of course, when I can truly justify that it will have a positive impact on my growth and profitability, or my business requires retail or warehouse space, then I go ahead and invest in some well located, and fairly priced space.
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