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5 Reasons Cutting Costs On Office Space Might Cost You

Working out of a garage makes for a great origin myth, but it’s a bad strategy for most startups.

5 Reasons Cutting Costs On Office Space Might Cost You
[Photo: Shutterstock]

Starting a company in a crummy garage, or working for that first year out of cramped, dank quarters next to weird neighbors are popular details in many startups’ origin myths. Later, they’re rehearsed from the conference rooms of successful companies’ gleaming new offices as proof of their founders’ gumption and hard work rewarded.

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And sometimes it is. But the fact is that your company’s work space can make a big difference in your work culture and productivity, especially during those first formative years. So while it might be tempting to cut corners on office space, or seem wise to pounce on a great leasing deal because you need something immediately, it’s smart to think twice. Most of the time, you get what you pay for, and there’s a big difference between scrappy and crappy–which can impact your bottom line. Here are five pitfalls to avoid when you’re shopping around for office space.

1. It’s Too Boring To Get Inspired

Kooky office perks are en vogue these days. Clif Bar for instance, has an on-site gym featuring a rock wall, and Dutch e-commerce site Coolblue hosts some of its meetings in a ball pit, like the kind you’d find at Chuck E. Cheese’s.

Those companies believe that letting employees have some fun at work pays off by boosting their morale and helping them blow off steam. But while others are more skeptical of the relationship between office perks and productivity, many smaller, younger companies don’t have the resources to consider installing a rock-climbing wall in the first place.

Still, giving your staff some sort of outlet to channel their frustrations and step away from their work for a while is a good idea. And it doesn’t have to be lavishly executed. We have a Nintendo 64 in our office, and our game of choice is Mario Kart. Playing games together is a great way to get to know other team members and encourage friendly competition. In addition to more standard-issue perks, like a coffee machine and and a fridge full of goodies, we also have a mural on one of the walls, a bunch of art, and plenty of frisbees lying around the office. The point is to make your space comfortable and inviting, and encourage staff to take a break from the grind so they can feel refreshed when they get back to work.

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2. It’s Too Distracting To Focus

Boring is bad, but distracting is worse. If you do have a Ping-Pong table in your office, make sure it isn’t sitting right behind your employees’ desks. Keep an eye on excessive noise and decor that might divert your employees’ attention.

These days, budget-conscious startups tend to consider coworking spaces before they’re able to sign a lease on their own office. And they’re a great interim option. Just bear in mind that you can’t choose your neighbors. In my first time in a coworking space, I had neighbors who supposedly worked in real estate, but in practice did more singing and movie-watching than brokering. It felt like a karaoke lounge, and not in a good way. Before you move into any sort of shared office, look into the companies around you to determine if your business is compatible with theirs.

3. The Layout Makes It Hard To Interact

Your work space needs to cultivate communication. If it doesn’t, what’s the point of having an office at all? Even if you’re on Slack or a system like it, there’s no replacement for actual face time. Your office should have around 100 to 200 square feet per person, so everyone can work independently as well as collaboratively.

But don’t mistake activity for interaction–or encourage too much of either. In one of my first jobs, my employer crammed all the cold-calling interns into one tiny space. The cacophony of sales talk was nearly dizzying. Whatever the company saved on rent, it lost in employee performance (and retention).

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4. It’s Out Of The Way

It’s no secret that if you scored a great deal on an office space but it’s an hour away from where all of your employees live, you’re going to have grumpy employees. Still, that obvious fact can be easy to disregard if you’re juggling other priorities. It doesn’t matter how dedicated your team is or how confident you are that they can adapt. In New York City, outer-borough prices are tempting, but New Yorkers have some of the longest commute times of any major city, so don’t make it worse. And a bad location isn’t just bad for your employees, it’s bad for your potential clients and partners as well.

5. It’s Too Hot, Too Cold, Or Badly Lit

This shouldn’t need spelling out either, but too many offices (and not just cheap ones) are downright uncomfortable to work in. Heating and air-conditioning systems that aren’t up to snuff can make a real difference in what your staff can get done and even how long they stick around.

While there’s no substitute for adequate utilities, you’re never going to please everyone when it comes to something as, well, temperamental as temperature control. But that’s all the more reason to make sure your office’s climate is something everyone can deal with.

The same goes for lighting. Natural light can be a pricey luxury for plenty of small companies, so if you can’t find an office where it’s abundant, try to aim for one where there’s enough lighting to emulate daylight. Lighting can impact employees’ moods and energy levels much the way it does at home. So invest in high-quality bulbs, and they’re likely to pay off in the long run.

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Trying to save money on office space is a tricky proposition. You need to make sure your employees are happy and comfortable in the office and have the tools they need to succeed. Otherwise, cutting costs in dollars might ultimately cost you success.

Aron Susman is a cofounder and the CFO of TheSquareFoot, a tech-fueled commercial real estate brokerage and listings aggregator helping startups find office space. Follow him on Twitter at @asusman103.

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