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Know How to Compare Office Rental Opportunities
and Keep Expenses to a Minimum

Next to salaries and raw material costs, the biggest expenses in your business are likely to be office rental and utility bills. Fortunately, there are a few things you can do to reduce these costs and improve the profit margins in your organization. You need to take this into account now — the earlier you think about reducing these costs, the bigger the long-term benefits to your business.

Here’s our step-by-step guide to keeping your office-related costs down as much as possible.

Step One: Prepare to Compare Office Renting Options

When you’re looking to rent office space, you will likely have a lot of choices. You’ll have access to plenty of information, and it’s important to capture all those details in a way that lets you make an accurate comparison. We recommend setting up a spreadsheet or other system you can use to compare “apples to apples” across the various commercial spaces you could rent.

Step Two: Decide What You Are Going to Compare

Before you start looking at office spaces for rent, you need to establish exactly what information you want to capture. Here are some possibilities:

  • Total square footage/area
  • Total cost of lease
  • Cost per square foot/area
  • Length of lease
  • What costs are included in the lease
  • What other services are included in the lease
  • Hidden costs like property management, maintenance or repair fees
  • Likely insurance costs
  • Energy type and likely costs (for HVAC, etc.)
  • Likely utility costs for water, sewage and garbage

Then, create a question sheet so you can get this information when you speak to commercial realtors.

Step Three: Find a Good Commercial Realtor

Next, look for some good commercial realtors in your area. Speak to other business owners and colleagues to see if they have anyone they can recommend. It’s likely you will also find commercial property managers who have space available for rent.

Share your questions with your commercial realtor or agent to let them know what information you need. Find people who will be cooperative and help you make an informed choice.

Step Four: Research and Compare Office Rental Options

Now that you have your questions, a way to compare the answers and an agent to assist, it’s time to start looking at office spaces. Review the various options across the region to help decide what’s right for you. Don’t just look at your current business needs — consider future growth. Think about what the business might look like between one and three years in the future and how it might grow.

Gather all the data you need to answer your questions and make a comparison. Work out a total price per square foot that takes into account the lease, likely energy costs, insurance, hidden costs and any other potential expenses.

Step Five: Balance Your Research Against Other Factors to Choose the Right Office Space

Although cost is a major consideration in choosing the right office space, you need to balance that against other factors including:

  • Budget, revenue and profit margin forecasts
  • Expansion needs of your business
  • Location, including other buildings and businesses in your area
  • Traffic, parking and how easily accessible your office space is to employees, partners and clients

Weigh all these factors together when deciding on the right commercial rental for your business.

Step Six: Factor in Costs of Furniture, Equipment and Installation

Of course, it’s not just the office rental that will be an expense for your business. You should also account for other upfront costs like buying furniture, equipment, electronics and other office necessities — in addition to any costs to install everything and get you up and running in the new location.

Tips & Tricks to Reduce Other Office-Related Costs

Now that you have the perfect office space, let’s dig into other things you can do to keep your costs down.

Track, Understand and Budget for Your Costs

You can’t reduce your costs unless you can measure them. As you run your business and pay out expenses for equipment, furniture, utilities and other office costs, carefully track expenses over time. Build all these expenses into your business budget. As you make improvements, continue to measure so you can see the impact of your changes.

Reduce Energy Consumption

If any of your expenses are metered (like utility bills, for example), then look at ways to reduce consumption. That might be as simple as changing temperature settings to lower power usage, or getting the HVAC systems serviced to become more efficient. Look for Energy Star appliances and equipment that draws less electricity.

Compare Prices and Choose the Cheapest

Take advantage of the competitive landscape and swap out one product or service for a cheaper one. There are plenty of ways to compare prices and features, so you may want to choose a lower-cost option that largely performs the same functions for your business. For example, look at various equipment manufacturers to choose the best price point, or compare internet and electricity vendors.

Reduce Scope and Benefits of Certain Areas

For some expenses, you might want to look at reducing scope, which is the range of benefits that expense provides. For example, if you have insurance, you could reduce coverage or increase deductibles to lower your premiums.

Spend to Save

You can spend in the short-term to save money over time. For example, you could get a discount on utilities by paying in advance, or you might want to invest in something like solar power for your office. You could insulate your building to reduce energy costs, or spend to save in other ways across dozens of other areas.

Let Staff Work From Home

Staff-related costs are a major factor in business budgeting. One way to reduce these costs is to allow your employees to work from home. You won’t need to pay for utilities or office space if you don't need workers to be based in a physical business location.

Continue to Optimize and Improve

As you make changes, track the impact. Make improvements and see how that changes expenses. That way you can track your returns, maximize your profit margins and retain enough money for future growth.

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