As a business owner, you make many important decisions every day, but whether or not to renew your lease for your office space may be one of the most important. It doesn't happen too often. Depending on the terms of your previous lease, it could be every two or three up to 15 years. And commercial leases are a little more complicated than residential ones, so it's not a decision to make lightly. Once you sign on the dotted line, you're stuck there, no matter what it costs your company. That's why it's important to avoid these five mistakes when renewing your office space.
Procrastinating when it comes to your lease is one of the worst things you can do as a business owner. But unfortunately, it's probably the biggest mistake people make in this situation. As a general rule of thumb, you should give yourself 12-36 months to a year to make assessments about your office needs, look for other potential space, negotiate with your landlord and come to a resolution. If your business is smaller, six months is usually sufficient, while larger companies may need a year or longer.
If you do wait until the last minute, your landlord knows you're in a tight spot and that you don't have time to negotiate or look for better deals. They can use this to their advantage, leaving you paying more than you want or signing a lease you don't like.
If you've been in a particular location for a while, it's easy to become complacent and assume it always has been and always will be the right space for your company. But businesses are constantly evolving and, hopefully, growing, so you may not even realize that your current space could be hampering your productivity.
Taking some time to see what else is out there is always a good idea. You may find a genuinely better deal that is better for both the business and your employees. And, even if you don't, if your landlord knows you're looking, they may negotiate a better deal on your current space.
As a business owner, your mind is focused on what's going to save or earn you the most money. While the price on the lease should be an important deciding factor, it shouldn't be the only one. You'll need to think about the location. Is it still the best place to do business, or would you benefit from moving across town, closer to your clients or your employees' homes? The size of the office space is also important. If your business has grown or you've hired more employees, you may need more square footage. On the other hand, if you've found ways to downsize, like having employees work from home, you may be paying for space you don't need anymore. Finally, if the current commercial real estate market favors lessors over landlords, you may be in a place to negotiate incentives and upgrades.
If you haven't done so recently, the year before you renew your lease is the best time to reconsider your company's needs right now and in the near future. Taking some time to reassess can help you make a decision about office space. You may find that:
Finally, with few exceptions, most business owners aren't equipped to make the decision without some help, and this is a commitment that can be costly if you make one wrong move. Start with finding out if your current office space is working for you with factual data delivered to you by 4SITE. We add sensors to your desks, offices, conference rooms, common areas and anywhere else you need them to help determine how your employees interact with your space. All of the data gathered goes into a report that you can use to make actionable decisions relevant to how your unique workforce wants to work. You can then take that information to a tenant rep broker who will consult with you and help you renegotiate your current lease or find the perfect place for your next big move.