Is it time to move to a new office space? Congratulations on your growing business. The thought of moving to a nicer, larger space is exciting, but it’s still a chore both legally and logistically. While you’re searching for commercial property, choosing a space, and planning your move, make sure you don’t make any of the following mistakes.
1. Not Studying The Different Kinds of Leases
Do you know what the difference between a gross lease and a net lease is? What about the difference between a net-net lease and a net-net-net lease? We swear those aren’t made up terms.
The five common lease arrangements are:
- Gross lease: This is a straightforward arrangement where you pay a fixed rate and your landlord handles all the other expenses such as insurance and real estate tax.
- Net lease: You pay a base rent plus a portion of the real estate tax and your landlord is responsible for operating costs.
- Net-net lease: You’re responsible for the base rent plus taxes plus insurance.
- Net-net-net lease aka “triple net” lease: You cover the rent, taxes, insurance, and operating costs (usually for industrial property).
- Percentage lease: You pay fixed rent plus a portion of your gross income (usually for businesses in multi-tenant buildings like shopping malls).
2. Neglecting to Check Out The Building’s Condition
Building management can make or break how much you enjoy your office space. When you tour the space take a look around. Is the building in a state of disrepair? Does it look dirty or neglected? Ask the right questions, as well. Is there a cleaning staff? How frequently do they come in? You want to work with a management team that prioritizes its tenants’ comfort and responds to issues promptly. If possible, speak to other business owners in the building to learn about their experience.
3. Failing to Check Out The Level of Security In The Building
What level of access does the public have to this office space? Are visitors checked in and checked out at the front desk? Is there a surveillance system? These are important questions to ask before moving your entire team to a new location. Pose these questions to the building manager to get the answers you need. The level of security in your new building can have implications on your insurance.
4. Failing to Carefully Check for Inconvenient Clauses
Read your contract carefully to check whether there’s a clause that allows your landlord to give you another space if the original space is not ready on time. If they invoke this, you’re stuck with multiple moves and the costs that come with that.
5. Dismissing How The Move Will Impact Your Employees
The reason people choose to work for a company are complex. For instance, location may have been a factor in why certain employees chose to work for you. Consider the impact that your move may have on your team, especially if you’re moving somewhere out of the way. You’ll also want to ensure your team has access to the same facilities they had in your soon-to-be-former office space, like access to free parking.
6. Not Checking Your Building’s Hours
Does your team have 24/7 access to the building or do you need to be out of the building by 8pm every evening? Even if you don’t plan on burning the midnight oil, the option may be something you want for busy periods or when you’re working on a large project. If you absolutely never stay late, this may not be a huge sticking point, but if you’re a startup that deals with unpredictability now and then, this could be a dealbreaker.
7. Giving Yourself Too Little Time To Move
You don’t realize just how much stuff it takes to run your business until it’s time to move out. It’s not just boxes and files you have to think about. It’s vital features like your telephone system and your internet that need to be set up in your new space. Time your transition so that your move falls on a weekend or your business’s off-season and you can set everything up with minimal interruption to your day-to-day operations.
8. Compromising on Comfort
Choose an office space with room for all of your employees and some. Keep the comfort of your employees – and any clients who may visit the office! – top of mind. Your employees spend eight hours a day or more in this space, so avoid a situation where everyone is packed in like sardines.
9. Taking a Casual Approach To a Sublease
Subleasing an office space is a nice option. There’s more flexibility and you usually get a lower rate. But this flexibility does come with some vulnerabilities. Confirm whether the landlord even allows subleases lest you make the move only to be evicted a month later. Ask the sublessor for a written contract verifying the terms of your sublease.
10. Failing to Consider the Impact on Your Insurance
Depending on the area, the type of building, and its security your commercial property insurance may change. Talk to your insurance provider to check out if your move affects your policy in any way.
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Zensurance is Canada’s leading online commercial insurance broker. We offer a full range of insurance products to small businesses, with a particular focus on digitizing businesses and technology startups. We understand what it is to work with new technology, and know the most common risks of which you should be aware. Based on that (and a lot of analytics), we recommend the ideal insurance coverage for your business.