For the early stage business, having a space to work together is often an essential but expensive necessity. Finding that space in London where competition is fierce is always tough.
Having sourced and moved into 5 different offices myself over the last few years here's some tips on finding space.
1. How much SPACE do you need?
To calculate the amount of space you need, think about how many desks you need now and in the future (which is always going to be a guess).
If you are going to rent by the desk, find somewhere that has enough desks for you now and where you have the option to take more in the future.
If you are going to rent your own office, I find the 50 to 100 sqft per person a useful yardstick...
How many people you have now x 100 = how much space you need in sqft.
e.g. 10 people = 1,000 sqft.
This includes meeting space, communal areas etc. That ratio will be quite spacious.
The maximum number you can fit in the space is the size / 50.
e.g. 1,000 sqft will fit 20 people at a push - but it will be really cramped.
Optimal is a ratio of 1:75
2. What else do you NEED?
Think through your needs and wants. The two are different and different for different types of businesses...
- short term contract, flexibility
- shared entrance or own entrance
- high speed internet connection
- access to shared meeting rooms
- own meeting rooms
- furniture supplied
- cleaning service
- telephony
- network trunking
- coffee machine
- kitchen space
- bike parking
- easy to get to for founding team
- close to public transport links
- cool image
- storage
- security
3. What can YOU offer?
As a startup at first your filed accounts will be non-existent or meagre so a landlord will need to have security upfront. If you have VC funding it makes it a little easier if you can show a bank balance.
The three main things you can offer are
contract length
- your budget limit
- your deposit available
Be really clear on what you have to offer and don't kid yourself
4. Make sure you understand ALL costs
The headline cost of a rent is the tip of the iceberg. You need to not only consider the monthly rent and the rent deposit but you may have other costs as well such as;
- service charges
- business rates
- contents insurance
- fire safety equipment
- fit out costs
- moving costs
- security (optional)
- dilapidation costs (what you pay at the end to put the space back in the condition you found it)
- legal fees
5. Start your SEARCH
Careful. Many online listing services charge a 10% commission to the landlord. Try go to the landlord direct.
Areas with lots of building work often have cheaper rents. (I wonder why). It might be a trade-off you're willing to make.
End-of-lease subleases are quite handy. Say a company had a 10 year lease and they move out on year 8 to a new place. They still need to pay their rent and it's better for them to rent it than not rent it. You can actually get a sublease for less than the rent paid by the existing tenant.
There are co-working hubs that can be a good place to start (see list below).
Another tip is to contact VCs that you know and ask around if they have portfolio companies that have extra space to rent. Often a growth company will take more space than it needs and rent desks out until they need the space.
6. NEGOTIATE and close
When negotiating consider what you can negotiate with other than the rental rate. Look to reduce the overall cost of the deal.
These are the main elements of a deal;
- monthly rent
- lease length and break clauses
- service fee
- rent free period
- rent deposit
And finally...
A list of co-working rent by the desk spaces in London...
Techspace London
Headspace
Club Workspace
Techhub
Google Campus
Rainmaking Loft
(Feel free to contact me if you have others to add and I will add them).
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