Finding Office Space : Shared or Private

My advice is to never work at home, unless you have a totally separate room that is totally isolated and you don’t have any human distractions at home like wife and/or kids, or you are disciplined enough to not succumb to any of the distractions at home to take you away from your work. In making the decision about where to work, you interestingly do not hear a lot about renting excess office space from other existing companies or sharing a lease with other businesses or freelancers.

When you are just starting or when you’re a freelancer controlling costs is extremely important. You don’t want to pay for more office space than you need, you don’t want to pay for the entire Internet bill if you don’t have to. I started out working from home and before I got really busy it was great. But as I started to get busy and contracts started rolling in, I found that I had to get a lot more productive, yet I didn’t want to spend the money to rent my own office to myself.

You always think about either working at home or getting your own office, but getting your office seems like a scary undertaking, signing and committing to a lease can be pretty stressful. However, you might find that there is a lot more opportunity to share space or rent from existing businesses than you think.

Over the past 5 years I worked at home, shared office space, moved back home, had my own office space to myself, and now I’m sharing space again. My recommendation, while you’re working on your own at least, is to start out working from home, but you’ll quickly find that as you get busy, you’ll need to go out and find office space to either share with another company or group of freelancers or rent your own office entirely. I like the idea of shared office space.

When you do decide on working away from home, here are some things to keep in mind:

1. It Forces a Routine
   Having a separate office space will force you into a routine. You’ll need to be at work during your office hours to answer phone calls, and because your equipment will be at your office you’ll need to be there to handle most of your work. This will force you into getting up regularly each morning to get to work.
2. Separate Home and Work
   Working at home makes it difficult to separate your work life and your home life. You’ll find that you’ll be checking your e-mails and actually responding to them more frequently, and working later on a lot more on projects just because it’s convenient. A separate office will force you to separate the two so you don’t take up all your time at home to work.

Now that you’re ready to move out of your home you need to decide if you want to share office space or find your own space. Here are some of the many reasons I like sharing space:

1. Reduce Rent and Office Expenses Significantly
   Sharing office space is much less expensive than renting an entire office to yourself. When I was looking for office space, I found a bunch of space available for approximately $500/month. It was for more than enough room than I would need, however, when I started considering a larger office space and sharing it with another business, (in one case there was going to be 3 businesses), I got about the same size of space but the end monthly cost for me was between $325-350/month. That’s a savings of $150/month, or $1800 / year. That’s big money when you’re starting out and don’t want to incur too many unnecessary expenses. As well, you can share other costs like your Internet connection, phone system, gas and electric bills. You’ll find some significant savings per year on all of your shared costs if you share space.
2. Professional Office Amenities
   By sharing space and resources, you should be able to find a space that has a board room and you’ll be able to put more money into the presentation of your office. This means a more professional setting when clients come in, and can also mean a more productive work area, with nicer furniture, desks, and workstations. Once you start to get busy, you may even be able to hire a shared receptionist or assistant.
3. Find Complementary Businesses
   One of the single most significant reason for sharing space is to find complementary businesses to share space with. I consider myself a full-service web freelancer since I provide web design, development, hosting, and Internet marketing services however I first shared space with an on-site computer tech support company. This company dealt with hundreds of potential clients each week, and was a great source of referral business for me. As well, in that case, I always had someone near by in case I had problems with my computer.

   In another situation, I shared space with a small ad agency. In that case I became their go to web guy since we shared space. We were able to share contacts and refer existing clients to each other which led to a lot of new business.

4. Leasehold Improvements
   Leasehold improvements can be huge when you move into a new office. If you’re sharing space with another business or group of freelancers, then you won’t need to pay for all the improvements yourself. You’ll be able to share the costs of improvements to the office space and have the professional office space to impress clients for only a portion of the cost.
5. The Company of Others
   It can get kind of lonely if you have your own office and you’re there alone all day. Sharing office space means there’s always someone nearby to talk to. Just make sure you’re still getting your work done.

If you decide to rent space from an existing business, you can consider the following:

1. Flexible Lease Terms
   If you are renting space of an existing business, you might not have to sign a long-term, multi-year lease. They may even prefer to keep it month-to-month. That is a great option if you are still starting out, since it keeps you flexible should you need to find new space in six months or a year.
2. Existing Office Furniture
   As well, when renting existing space there may be existing desks and office furniture that you can use. This can be a great way to offset the costs of buying that big fancy new desk. As well, you may be able to share office equipment like the photocopier and fax machine.

As a business person you always need to keep in mind the potential downfalls and risks of your situation. Here are some of the downfalls of getting your own office, shared or not:

1. You’ll Still Have To Commute
   You will have to actually get up everyday and go to work to get your work done. This might go against your reasons for becoming a freelancer in the first place.
2. Writing Off Percentages Of Your House Bills
   When working from home you can write off a portion of your monthly rent or mortgage and utility bills as part of your business.

Finally, if you were to share space with a group of freelancers or another small business, more risks should be considered:

1. Flexible Lease
   This was one of the advantages of sharing office space, but it can backfire if the company you rent from decides they want to do something else with the space you’re renting. They’ll have to give you notice, but you may find yourself forced to move at some inopportune times.
2. Watch Your Growth
   What happens if the freelancer or company you’re sharing space with grows and needs twice the space they currently have, what if you do? You may find that you need to shuffle the office layout and space requirements in order to accommodate the growth of your business, or your office mates.
3. Distractions
   The group you share space with may become a huge distraction. They may listen to loud music in the office, always want to go out for lunch/coffee, or might be always on the phone and causing disturbances to your work routine. You’re not their boss, so you can’t tell them to change, but you may want to look into having your own office within the overall space you share.
4. Office Décor Is Shared
   Does the company you move in with have horrible taste? Maybe they wanted to have the office done in bright, vibrant colors like bright green, yellow, and orange, while you want to incorporate a totally different atmosphere. You might clash on some of these issues.
5. Closing of Business
   Things can always change, especially in business. One company I shared space with decided to split up and one of the partners left. This was a major impact on that business, and essentially they weren’t able to maintain their part of the rent. You don’t want to get stuck with the entire cost of rent if your office partners go out of business or aren’t able to afford their share.

My final advice is that if you do decide to share space with a group of freelancers or some other business make sure you have an agreement in place. If you are renting space from an existing larger business, or you and another small business are leasing space together you need to have a written agreement that sets out who is responsible for what share of the office and monthly costs like rent, Internet, utility bills, and phone system in some cases. As well, make sure you understand consequences if your officemate were to go out of business. If you have a combined expense of $1000/month and you’re paying $300 you may get stuck with the entire $1000/month if they were to fold their business or go bankrupt. Make sure that issue is addressed when you sign the lease agreement.

Lastly, get to know the person or people you’re moving in with. Just like a college roommate you may move in and find out they’re not quite the person you thought they were and you want to make sure the experience will be beneficial and fun for both of you.