Renting a commercial office space vs. renting at a business center
You might be running your business out of your one car garage, meeting clients at random coffee shops, or trying to get work done at the kitchen table and thinking “I need an office.” You might be renting space from a friend or family member and wondering, how long will I be able to do this?
But commercial space can be expensive. There’s the big, obvious expense of rent. But what about utilities, furniture, office equipment? Can you afford all that?
We’ve done some of the leg work to help you estimate the real cost of setting up an office by yourself or moving into a business center like College Park Executive Suites.
In the example below, we’ve used rent and utility rates in Virginia Beach, Virginia, but you can easily find information for your area using the resources linked here.
How much is commercial rent?
According to offices.net, the commercial rent market is strong in the Norfolk, Virginia Beach and Chesapeake regions. Decreasing vacancy rates means it might be difficult to find a commercial office space that fits your needs and your budget.
An informal survey of office rents as listed at cityfeet.com turned up rents ranging from about $9.91 per square foot to $33.00. Those rentals are between 550 and 5,000 square feet.
So that means, if you found the smallest possible office at the least expensive price, you’d be paying a grand total of $5450.00 per month for the space.
That’s all well and good if you need 550+ square feet of office space. But what if you need less than that? It looks like you have no choice but to pay for space you don’t really need.
What utilities will you pay for?
Most commercial rents include water and sewer but require you to pay for electricity and internet.
Accurately estimating your monthly electric bill can be a difficult proposition since it depends on the unique needs of your business. But according to electricchoice.com an average electric bill for a business in Virginia was about $490 per month in 2016.
You’ll also need to pay for internet, since most modern businesses can’t operate without it. Again, prices vary depending on which service provider you use, but according to Broadbandnow.com, you’re likely to pay between $64.99 and $135.00 per month.
That’s a total of at least $554.99 per month in utilities.
How much furniture do you need?
At bare minimum, you’ll need a desk and a chair to get started. You might already own these things, but if you don’t you’ll need to buy or rent them. A very simple desk will cost you around $50. A chair is about $40. These are the very base model options. Costs only go up from here. Companies like Staples.com also offer full business furniture sets starting at about $2,000
If buying seems like too much of an upfront investment you can also rent a desk for about $30 per month and a desk chair for about $15 per month. That might not be a cost-effective option since you probably plan to be in business for years, not months.
On top of those bare essentials, you may need bookcases, conference tables, and additional seating for clients or visitors. Every item you add increases the cost of outfitting your office.
What office equipment is essential?
Finally, you’ll need to consider office equipment. You may need a printer, fax machine, or copier. A business-grade all-in-one can costs around $300. You can also lease one; while that reduces up-front cost and may include a maintenance plan, your cost will be higher over time.
Depending on your type of business you might also need a shredder, laminator or paper cutter. Add in a refrigerator, microwave and coffee maker to make a 40-hour work week a little more pleasant and your out-of-pocket costs grow quickly.
Totals – Can you afford commercial office space?
So let’s look at the total cost of renting an office space. For a bare bones setup in the smallest available space, you’ll need to spend about $6394.99 for the first month and about $6,004.99 every month thereafter. That’s about $76,740 per year.
Keep in mind that most landlords require you to pay your first and last month’s rent up front as a security deposit.
Now let’s look at the cost of renting an office space in a business center. At College Park Executive Suites, you can rent one office or several. The smallest space is 115 square feet. The largest is about 225. Rent as many offices as you need to get the space you want.
For the sake of comparison, let’s say you rent two large offices and one small office, for a total of 565 square feet. That’s about the same size as the smallest commercial office space. At College Park your rent would be $3,300 per month. Plus an upfront fee of $20 for each magnetic keycard you need.
You’ll need to pay first and last month’s rent up front, but all utilities are included. You’ll get electricity and internet at no extra cost to you. Your basic furniture is also included. You’ll have access to an all-in-one printer. Instead of buying paper and ink, you’ll pay per page for printing or copying.
So you’ll spend about $3,320 the first month and $3,300 for each month thereafter, for a grand total of $39,620 per year.
If you want a smaller space, for example a one-desk office at around 115 square feet, your rent could be as low as $610 a month.
It turns out office space might not be as expensive as you thought.