How Much Is Office Space in London?
- 10 Minute Read
So your business has grown to the point where you’re thinking of renting some startup office space - congratulations!
Choosing your first or second office can be a crucial decision at this point of your startup’s development.
Your new office needs to sit comfortably within your budget but also fulfil all the requirements you have for the space, so that you’re well equipped to continue growing your startup.
Compromise may be necessary on a startup budget, but with some planning you’re bound to find a space that fits the direction, size and requirements of your business.
Here we’ll run through how to find your perfect startup office space, from planning the essential and desirable requirements for your office through to selecting a property
Before you look at your budget and start browsing offices, you need to think about what you want to get out of your startup office space.
Different businesses place different emphasis on the importance of the office; for example some want it to be a place employees gather, and some want it to be a professional-looking space where they can host clients.
If you’re expecting to greet clients at your office you may want to budget for this, as the more money you place into your office the more you could potentially secure in sales.
Equally, you may want a prestigious location and address to give your startup authority, such as leasing on London’s famous Tottenham Court Road, in which case you may be prepared to spend more for the recognisable location.
A key mistake to avoid as a startup is either overpredicting or underestimating your growth potential when choosing startup office space.
Sure you want to avoid wasting money on empty space, but you should always be prepared for the unexpected.
For example, you could pick up some key new business or investment that might require you to make a number of new hires and rapidly expand.
Equally, the loss of a client, loss of an investor or other unplanned circumstances like the 2020 Coronavirus may mean you need to downsize.
Being trapped in an inflexible year or two-year lease could cripple your growth or be a huge financial burden - evidently something to avoid at this crucial stage of development.
Happily, there are commercial property companies who offer flexibility. For example, Sub800 allow you to move within their portfolio easily, meaning when you discover you need more space you can move to another of their properties, with no legal contracts rooting you in place.
Similarly, make sure not to mistake what your startup office space needs with what you want.
For example, you may want a decent view, but if it’s not necessary for your startup goals, you don’t want to overlook potentially great properties which don’t have a view.
Once you’ve figured out your reasons for wanting startup office space, and have considered your individual requirements, budget is going to be your next consideration.
Examine your available budget closely to see what you can reasonably set aside for office costs.
Weigh up the advantages and disadvantages of different options, and the potential financial implications; the right office space could pay dividends for your business.
For example, it could be worth spending more on the space to keep employees happy, which can improve productivity and increase your employee retention rate, saving you buckets of money in the long run.
Similarly, good startup office space could help you attract top talent - which could secure you a superstar who’ll become a key part of your business expansion.
Also make sure you factor in needing to buy office furniture in your budget.
If it’s your first office, you probably won’t want to spend too much on the property and then end up needing to purchase cheap furniture that needs replacing often.
Buying quality office furniture that lasts is also a good investment - so you need to strike a good balance between the property and the furniture if it’s your first startup office.
When looking at locations for your startup office space, you need to consider factors like accessibility, amenities and cost.
Remote rural offices may be cheaper but could limit your clients to businesses nearby and seriously restrict your pool of potential employees.
On the other hand, large cities are more expensive and could give you more direct competition for clients.
They reported that leasing startup office space in London gives access to bigger investments on average; the average seed round in London stands at $650k, compared with the global average of $494k.
So making the move to London at this early stage could be a financially sound idea for your startup.
Next, decide what kind of rental contract you’d be looking for.
There’s two types of office space contract - a license to occupy or a lease.
A license to occupy is usually shorter-term, and is usually offered in serviced offices, or as part of an arrangement to rent space within another business’ property.
A lease is usually longer-term, lasting at least a year. The rent paid for a lease grants exclusivity for the premises, has a longer notice period and often works out cheaper in the long run.
For more information on the differences between the two, and which might be best for you, check out our blog on an office licence vs an office lease.
Once you’ve finished your planning, start looking at startup office space, checking the properties against your essential criteria.
On a startup budget, you’ll likely have to compromise on some of your top requirements - your first few offices obviously aren’t going to look anything like Google’s office.
If you’re making a move to another city, consider looking at startup properties virtually first, if the property company can offer this feature.
Sub800 offer realistic virtual tours of each property, so you can visit virtually without paying for costly trains and spending days trawling around the city looking at offices.
If you’re interested in what you’ve virtually seen, you’ll know it’s worth visiting in person.
Deciding to rent office space is a very exciting next step for your startup.
However, there’s plenty to consider to make sure you’re making the right choice.
Why not check out Sub800’s offices? Sub800 offer affordable, flexible startup office space, and you can easily move within their portfolio if you need to expand, exactly what you need as a blossoming startup.