Selecting the right kind of workspace is a crucial decision for any business. The workspace you choose can impact your productivity, efficiency, and overall success. There are various options available, each with its own set of advantages and disadvantages. In this lesson, we will explore the different workspace options and factors to consider when making your decision. Additionally, we will delve into the significance of location and how it can influence your business operations. By understanding these aspects, you can make informed choices that align with your business goals and optimize your chances of success.
Now, let’s dive into the various workspace options and their pros and cons to help you make an informed decision for your business.
Setting up a workspace
Setting up a workspace is a crucial step in the start-up process. Many businesses initially operate from a part of the home, such as a garage, shed, spare bedroom, or home office. However, as your business grows, you may need to consider moving to a dedicated workspace outside of your home.
There are several advantages to having a dedicated workspace outside of your home. Firstly, it helps eliminate distractions and interruptions from your personal life, allowing you to focus more effectively on your work. Additionally, a dedicated workspace can be customized to suit your specific business needs, providing ample space for equipment, storage, and potentially even a suitable environment for meeting clients or customers. It also gives your business a formal and professional image, establishing a physical base of operations.
While acquiring a dedicated workspace comes at a cost, there are various options available to consider. In the upcoming sections, we will explore different types of workspaces and their pros and cons, helping you make an informed decision based on your unique business requirements and budget.
Let’s delve into the options available for setting up your workspace and explore the different factors to consider when making this important decision for your business.
1. Using shared space
Shared workspaces have become increasingly popular and offer a convenient option for many businesses. These spaces provide a professional environment where you can rent a designated workspace, often including basic equipment and services like internet access, as part of the rental package. Instead of committing to a long-term lease and the associated maintenance and setup costs, shared workspaces allow you to pay for the space for as long as you need it.
There are several benefits to using shared workspaces. Firstly, they provide a professional setting that can enhance your business image and credibility. Clients and customers will perceive your business as having a dedicated workspace, even if you don’t have a physical office of your own. Shared workspaces also offer the opportunity for networking and collaboration with other professionals who share the same space, potentially leading to valuable connections and partnerships.
Additionally, shared workspaces often provide access to amenities such as meeting rooms, reception services, and communal areas, creating a conducive working environment. These spaces are typically well-equipped with modern technology and infrastructure, allowing you to focus on your work without worrying about setting up and maintaining your own office.
For some businesses, creating the impression of having a dedicated workspace is more important than having a physical space. This concept is known as a “virtual workspace,” where you utilize shared space and services on an as-needed basis while primarily working remotely. A virtual workspace allows you to maintain a professional business presence without the costs associated with a physical office.
2. Virtual workspace
For small businesses and start-ups with limited resources, the cost of renting traditional office space can be prohibitive. In such cases, a virtual office provides a cost-effective solution that offers many of the benefits of a physical office at a fraction of the cost.
With a virtual office, entrepreneurs have the flexibility to work from their own homes or remote locations while still maintaining a professional business image. The key feature of a virtual office is the use of services that create the impression of a physical office presence. For example, a telephone-answering service can manage incoming calls on behalf of the business, ensuring a professional and responsive customer experience. Reception services are also often included, providing a dedicated point of contact for clients and visitors.
In addition to call management and reception services, virtual offices often offer other valuable features. Entrepreneurs can have access to real meeting rooms on an as-needed basis, allowing for professional and face-to-face interactions with clients or team members. This is particularly useful when in-person meetings are required but a permanent office space is not necessary.
Furthermore, a virtual office can provide a business address, giving home-based companies a more prestigious and professional image. The virtual office service may include mail-handling, where the business’s mail is received and managed at the designated address. This adds an extra layer of credibility and privacy, as the business doesn’t need to use a personal home address for official correspondence.
By utilizing a virtual office, start-ups and small businesses can benefit from the advantages of a physical office without the associated costs and commitments. It allows entrepreneurs to focus their resources on business growth and operations while still maintaining a professional presence in the market.
3. Storing and warehousing
For businesses that deal with physical products and require storage space for inventory, finding appropriate storage and warehousing solutions is essential. Depending on the nature of your business and the volume of products you handle, you may need to consider various options to ensure your stock is safe, well-maintained, and easily accessible.
One option is to allocate storage space within your own business premises. This can involve setting aside an area specifically designed for storing your products. It should provide adequate protection against environmental factors such as moisture, temperature fluctuations, and security risks. However, it’s important to note that dedicating space within your premises for storage may limit the overall working space available for other business activities.
If your business operates on a business-to-consumer (B2C) model and requires frequent shipping of products to customers, you may need to explore additional storage options beyond your own premises. Self-storage facilities offer a convenient solution, allowing you to rent storage units of various sizes according to your specific requirements. These facilities are equipped with security measures and provide a secure environment for storing your inventory. However, keep in mind that self-storage facilities may not provide additional logistics services such as transportation or inventory control.
Alternatively, if you require more comprehensive storage and logistics services, you can consider renting warehouse space. Warehousing facilities not only offer storage space but also handle the logistics aspects of your inventory management, including inbound and outbound goods flow, transportation, and inventory control. However, it’s important to be aware that the costs associated with renting warehouse space and utilizing logistics services can be significant.
In recent years, some distribution and fulfillment companies have introduced flexible and cost-effective storage options. These companies allow you to pay only for the storage space you use, making it a more scalable solution depending on your business needs and trading seasons. This approach can help optimize costs while ensuring that your inventory is managed efficiently.
When deciding on storage and warehousing options, consider factors such as the size of your inventory, the nature of your products, the frequency of shipments, and your budget. Careful planning and evaluation of these factors will help you choose the most suitable storage solution that meets your business requirements while minimizing costs and ensuring the smooth flow of goods to and from your warehouse.
Conclusion: Pros and cons:
Which options will you choose?
When it comes to selecting the right workspace for your business, each option has its own advantages and disadvantages.
When making your decision, carefully consider factors such as cost, convenience, networking opportunities, privacy requirements, and the image you want to project to clients. It’s essential to find a workspace that aligns with your business goals, promotes productivity, and fits within your budget.
Consider the following pros and cons to help you make an informed decision based on your specific needs:
1. Working from home
Pros...
- No commute, saving you time, stress, and transportation costs.
- Flexible working hours that allow you to manage other commitments more easily.
- Lower costs as you eliminate commercial rents and transportation expenses.
Cons...
- Difficulty in separating work and home life when your workspace is within your living space.
- Potential isolation and loneliness without direct interaction with colleagues.
- Perception of a less professional image to clients compared to a formal business address.
2. Shared space
A shared space can be an affordable choice, but working alongside others can be helpful or a hindrance.
Pros...
- Affordable office space with shared resources, reducing setup and maintenance costs.
- Opportunity for networking and collaboration with other entrepreneurs and business people.
- Access to communal areas that foster a sense of community.
Cons...
- Commute time, stress, and transportation expenses associated with traveling to the shared workspace.
- Lack of privacy in an open office environment, which may not be suitable for certain businesses.
- Potential distractions from working in close proximity to others.
- Higher costs than home working, due to rental fees and transport costs.
3. Private workspaces
A private office outside your home puts you in control and gives your business prestige, but this all comes at a cost.
Pros...
- Customizable office space tailored to your preferences and needs.
- Privacy and control over the work environment, minimizing distractions.
- Professional credibility and a dedicated place to meet clients in person.
Cons...
- Higher overhead costs compared to other workspace options.
- Commute time and transportation expenses similar to working from a shared space.
- Limited networking opportunities as you have less direct contact with other businesses.
Fun Fact!
66% of companies start in a spare bedroom, garage or shed.
Expert Entrepreneur Advice
Case Study: Ecommerce x 3PL Success – $0 to $5 million in 1 year working from home
In my personal experience with my e-commerce business, I was able to achieve remarkable success working from my one-bedroom apartment without a private office or storage space. I didn’t have any prior knowledge of warehouse management, yet I managed to have over $1 million worth of stock on hand, equivalent to around 25,000 units of a product. How was this possible? The key was partnering with a third-party logistics (3PL) service.
A 3PL service is a fulfillment, storage, and logistics provider that handles the storage and shipment of your products on your behalf, often at a more efficient rate than what you could achieve on your own. Here’s how it worked for me:
Instead of renting a private warehouse and managing storage and logistics myself, I collaborated with a 3PL service. They provided me with warehousing space and calculated the monthly rent based on the amount of pallet space my stock occupied in their warehouse. This cost was significantly lower than what I would have paid for a private warehouse, not to mention the added burden of self-management.
By partnering with a 3PL, I was able to focus on growing my e-commerce business without the hassle of inventory management and shipping logistics. The 3PL took care of receiving, storing, and shipping products to my customers, allowing me to scale my business quickly and efficiently.
This case study highlights the effectiveness of leveraging a 3PL service, especially for businesses operating from home or without the resources to manage their own warehouse. It’s crucial to explore different options and find the right 3PL provider that aligns with your business needs, ensuring seamless fulfillment and logistics operations while minimizing costs and complexities.
Remember, success is not always limited by the physical space you work from. By leveraging strategic partnerships and outsourcing certain aspects of your business, you can overcome limitations and achieve remarkable growth even in unconventional settings.
Choosing where to locate your start-up
Selecting the right location for your business is a crucial decision that can impact your costs and influence the type and number of customers or clients you attract. To make the best choice, careful analysis and assessment are necessary. Here are some key factors to consider:
Assessing your business needs
The nature of your business will determine the importance of location. For example, if you plan to open a restaurant or shop, being in a high-traffic area will be essential. However, if your business operates mostly online, location may be less critical. Consider factors such as rent, storage, transport, and the working environment that will make you and your employees comfortable. Safety, security, parking spaces, and easy access for you, your employees, and clients should also be taken into account.
Researching the area
Define your criteria, such as being on a main shopping street or near a transportation hub.
Look online, in newspapers, and visit commercial property agents to gather information about available business premises in your desired area. Identify areas where special deals or incentives, such as grants or tax reductions, are offered to new businesses.
Get a feel for the area by visiting potential locations and speaking with local business owners to understand the business climate. If similar businesses have failed in the past, try to determine the reasons, as they may be tied to the location.
Check for any local regulations or planned developments that could impact your business. Additionally, consider the availability of necessary local services and whether you require specific permissions or licenses to operate in the area.
Suitability for your business
Ensure that the chosen location aligns with the nature of your business. For instance, starting an upmarket beauty salon in a rundown area may not be ideal. Put yourself in the shoes of your potential customers and consider their psychographic and behavioral tendencies. Where would they expect your business to be?
Assess the level of competition in the area and determine whether it will impede your business operations or success. Keep in mind that having competitors nearby isn’t always a disadvantage. If your business offers a unique proposition that exceeds your competitors’ offerings and meets customer expectations, being near them can actually increase the value of your proposition.
By carefully evaluating your business needs, researching the area, and considering the suitability of the location, you can make an informed decision that sets your start-up on the path to success. Remember to thoroughly analyze and prioritize the factors that matter most to your specific business to ensure a location that supports your growth and meets your customers’ expectations.
Need to knows:
Lease term is the minimum period covered by the lease.
Lessee is the person taking out a lease on a premises from the lessor, the property owner.
Renewal options define when and under what terms the lessee can extend the lease.
Security deposit is the amount paid by the lessee at the beginning of the lease agreement. This sum is returned by the lessor at the end of the lease.
Questions to ask yourself...
If you can start from your home, do that!
You’ll need to make your premises accessible to everybody.
Base your answer on how much space you need and your required floor plan.
Consider the feel of your surrounding area and match your building type to your business’ needs and culture.
If customers can book in advance, you may not need to worry about foot traffic and can tuck away your business on an accessible side street for lower rent than a main street premises.
If your business needs to attract foot traffic to get business, like a cafe or restaurant, you will need to be located in a busy main street. If you want to set up an agency or an accountancy, an office in a professional looking business centre will be enough for you.
If your business is seasonal you should look for shorter term leases as the most common lease terms are +1 year. You don’t want to be paying rent when your business is not trading due to the season!
You’d be so lucky to find the perfect premises at the right price, so you may have to compromise on at least some features. Make a list of “must-haves” and a list of “nice-to-haves” then prepare to make sacrifices.
The cost of your premises is fixed, whether your business is making money or not. This means you really need to make sure that you can afford your premises based on all of your expenses and estimates.
Instead of having premises on a high street, could you maybe share space with another small business or trade from a mobile vehicle? For example, locating a small cafe inside of a craft shop may have advantages for both businesses.
