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Beware of the hidden costs

Beware the hidden costs of office space

As solopreneurs, we all know the challenges of working from home or the coffee shop. At some point, you think to yourself: “I’m a professional. I need a real office.”
On the surface, traditional office space might look like a good deal. But before you sign a lease, make sure you know what your total cost will be. The cost of the space, plus extra costs and commitments.
At this point, as you’re touring potential offices, you’ll want to create a “what-if” budget that allows you to account for the varied costs of all the spaces you visit. Below are some of the items you should watch for.

Total lease costs
We won’t give you a lecture on leases here, but make sure you understand the different costs that might be coming your way after you sign. Some leases are  “gross” or “fully serviced,” which means your monthly rate includes everything. More often, you’ll be offered a lease that requires you to pay certain additional expenses, such as:

  • Utilities
  • Taxes
  • Insurance
  • Maintenance

Personal guarantee
Most first-time renters are required to sign a personal guarantee. That means if your business goes under and you need to break the lease, the landlord can still come after you for the full amount of the lease. On a 3-year lease at $1,000 per month, the full lease amount would be $36,000.

If you’re used to paying for residential rates, prepare for a wake-up call. Sure, you can get the slowest speeds for under $100, but if you need the fastest speed available, currently 1Gb, you could pay many times more. One important thing to note about fiber Internet: unlike cable or DSL, the speeds are synchronous, which means that you get the same speed uploading as well as downloading. This is important if your business involves uploading large files.

Landlords typically don’t provide furniture. If you already have furniture or can settle with IKEA, then it probably won’t cost you too much to furnish a one-person office. One piece of advice: if you’re going to splurge on anything, buy a high-quality, ergonomic chair. Skip the office supply stores and talk to a commercial furniture provider and plan on spending $500 to $1000.

If you drive to your office, you’ll have to deal with parking somehow. If the office is located in the city, then most likely the landlord will not provide you with a parking space, especially a free one. Therefore, you need to investigate whether there is any free street parking nearby or if you’re limited to meters and parking ramps. If you go the parking ramp then be sure to check on the cost of parking contracts and add that cost to your budget. Beware: in some neighborhoods, like the North Loop of Minneapolis, it’s difficult to find any kind of parking.

Many landlords arrange for someone to empty trash and clean the offices, whether it’s once a day or once a week. Depending on your lease, you may pay for cleaning in addition to your base rent (see leases above). If cleaning is not accounted for, then be sure to budget time or money to get your space cleaned and have the trash emptied.

Odds are, a one-person office space won’t come with a kitchen or even a sink. The building may provide one, in which case you’ve got the ability to pack a lunch or bring your own ingredients and make your own meals. If not (or if you simply hate to prepare a lunch bag) then budget for at least $10/day, which over a month can add up to over $2oo.

Coffee & tea
Depending on your habits, you may be content just brewing a pot of coffee or making tea in your office. If so, no problem. But if you like the good stuff, then budget for regular visits to Starbucks or the local purveyor. A $5/day habit will cost you over $100 per month.

You can avoid hidden costs and get some extras at Coco
For freelancers and consultants, a shared office space like Coco is an ideal alternative to a long-term office lease. Why? For starters, you avoid most of the hidden costs mentioned above. They’re simply covered in your monthly membership. Secondly, you get a bunch of extras that aren’t available at any price, including:

  • Social and educational events – where you can learn and easily build your network
  • A variety of work settings – change your workspace depending on your mood or goals.
  • Meeting rooms – almost 20 different sized rooms to choose from.
  • Multiple locations – you can work out of any of them!
  • A professional greeter at the front desk.
  • An office manager who makes sure everything is working fine.
  • Ideas & inspiration – that’s what you get when you work around hundreds of other solopreneurs!

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