Affordable Office Space: Buy, Rent, Or Something Else?
When operating a SMB, office space and equipment are among the largest expenses.
These can put a real strain on your operating budget. That means you may have to limit other activities in order to pay for space and gear — but why compromise? Rather than investing all your funds into your office, there are other options. While you may choose to buy or rent, in today’s changing professional environment, you may find other approaches that work for your business.
Thinking About Space
Office space is costly, and unlike a home, few companies purchase office space; they rent. Rather than committing to a lease, though, take the time to determine how much space you will need, and how often you’ll use it. Some businesses choose to rent a larger space and share it with other companies or contractors; this can help reduce the cost of a quality space. Other businesses rent a small space, but only use it part of the week. Another company occupies it part-time.
Perhaps the most innovative approach to SMB space is renting a desk or room in a coworking space. Coworking spaces are ideal for one-or two-person operations and typically have computers and printers you can use. This allows you to save on technology costs in addition to renting office space, making it an affordable solution for small businesses. These spaces are great for plumbers and contractors who rarely have clients in the office.
Often included in consideration of office space, SMB owners need to consider the state of appliances and other systems before choosing one. Depending on your lease, you may be responsible for certain elements, such as installing air conditioning, and if you buy, you’re responsible for everything. Before choosing a property, assess the air conditioner, heat, ductwork, and other equipment and ask when they were installed. If you own the property, you’ll have to decide whether to repair or replace appliances when they break. Either can take a bite out of your budget.
Like office space, office equipment comes with its own set of considerations, and that goes beyond used versus new. You’ll also want to consider, for example, that you get tax benefits from buying office equipment — but only when you purchase it outright. Leased equipment doesn’t carry the same benefits because you aren’t responsible for depreciation. If leased equipment breaks down, the company that owns it is responsible for it. On the other hand, though you get tax benefits from buying, you also have to make repairs. That can be costly.
A Question Of Need
In addition to deciding whether to buy or lease office equipment, you should consider how much you need a given item. Short-term rentals, for example, may be ideal for certain projects that need special equipment. You could borrow equipment from another company or visit a local marketplace if you need to use something like a 3D printer. With growing community infrastructure for DIYers, business have new options available to them. There’s also a difference between equipment you need and gear that would give you an advantage, but is ultimately optional. As with other purchases, timing is everything.
How much you need certain features on a product can also determine whether it makes sense for your SMB to buy used equipment. When companies lease high-end printing equipment, one thing they’re doing is avoiding equipment obsolescence; upgrades are no longer your company’s responsibility. If your office can make do with an older printer, though, buying used can be cheaper then either buying new or leasing. You can also buy office seconds like desks and file cabinets from companies that are closing or getting new equipment.
The Growing Subscription Model
Subscription services have made it much easier for business to access the software they need. This includes everything from security programs to the Adobe suite, but ultimately subscriptions are similar to leasing. It’s important to consider how those costs add up. Sure, pay-as-you-go technology is affordable for short projects, but what happens over time? It’s tempting to lease equipment when you’re getting started, but after a few months, if you decide to buy, you’ll have to eat those costs. And lease expenses only become more wasteful the longer you operate, unless you gain some other benefits from the contract.
The decision to buy, rent, lease, or borrow space and equipment has to do with the length of time an item is needed, budgetary allowances, and community availability, among other factors. That means, as your business grows, you may need to make adjustments. Just as you’d rent a larger space or a larger server as you scale up, you need to be open to new approaches. You innovate every day. Don’t let your approach to office space or equipment be any different.
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