Most traditional office spaces have a lease agreement that runs for at least one year.
Long-term leases are a suitable choice for large companies and corporations that generate sufficient revenue to afford expensive overhead.
But what if you run a startup in the early stages or a small business that needs to reduce costs in order to maximise profits?
In this case, long-term commitments may not be the best option for your company.
Furthermore, flexibility has become a significant asset for small businesses (especially thanks to Covid-19).
When rapid changes occur in technology and economy, you do not want to be tied up in a long-term lease agreement.
I have already outlined in a previous post that pop-up offices (office spaces where companies can “pop-in” and “pop-out” on a short-term basis) have become the “new normal” in the post-pandemic world.
Now, I will provide a comprehensive list of benefits that short-term office leases bring to start-ups and small businesses (even though large companies can benefit from short-term office leases as well).
Table of contents:
1. Short-Term Office Leases: The Basics
Typically, short-term office leases have a span of 6 months. However, you can also rent office space on a daily or monthly basis.
A short-term lease has a fixed rent amount that you must pay per week or month. Depending on your package and the type of office space you choose, you may need to pay extra fees for additional services (e.g., pay-per-use office facilities).
Short-term office leases are an excellent choice for:
- Start-ups and small businesses looking to improve efficiency and reduce costs
- Companies that are constructing and remodelling their permanent business location
- Pop-up businesses that operate temporarily (e.g., short-term stores for the holiday season)
- Companies that have outgrown their office and need additional office space
- Businesses that are expanding or opening an office in a new location
- Businesses that are testing a new market
Before taking an in-depth look at the top benefits of renting short-term office space, you should know where to find an office that you can rent for any period shorter than a standard office lease (i.e. one year).
There are three main types of flexible office spaces that typically DO NOT provide lock-in contracts:
- Coworking space
Coworking spaces are offices where people and businesses work independently on different projects. They offer the same amenities as a traditional office, but the only difference is that you work in a public place with little privacy.
- Serviced office
A serviced office is a fully equipped office that you rent in a building on a short-term basis. A serviced office gives you access to a wide range of facilities and services (e.g., security, reception, administrative support, etc.). Serviced offices are very similar to brick-and-mortar offices, but they can have higher costs in the long term.
- Virtual office
A professional virtual office is an excellent alternative to coworking and serviced office space as it provides companies with a unique business address and office facilities at a fraction of the cost. As a result, small businesses can save money while building a professional business image.
Choosing between coworking, serviced office, and virtual office space depends mainly on your business needs, size, and structure.
To learn more about the differences between these office types and find out which one of them fits your business, I suggest that you read the following posts: Serviced Vs. Virtual Office: Which Suits Your Business Best? and Differences Between Virtual Office, Coworking, Serviced Office And Traditional Office.
2. 7 Benefits Of Short-Term Office Leases
Below you will find a complete list of benefits that short-term office leases have for small businesses:
- Lower costs
A short-term office lease is a money-saving option. When you rent fully equipped and furnished office space, you avoid the expenses that come along with equipping an office with furniture, Internet connection, kitchen supplies, stationery, photocopiers and printers, storage equipment, and much more. Furthermore, you are not responsible for the maintenance of the building. And last but not least, a short-term monthly rental is more affordable than a long-term one (in Australia, you can get a virtual office for $100 a month or less, a short-term office for about $700 a month per seat, while prices for a traditional physical office start at $2,000 a month).
With a short-term office lease, your business becomes more mobile, as you are not limited to your current space for long. As a result, you can easily navigate through uncertainty (especially after the coronavirus pandemic outbreak, addressing the uncertainties is crucial for every business). For example, a short-term lease agreement allows you to switch to remote work temporarily and operate from home.
- Quick and easy process
When you rent short-term office space, it takes just a few days (or even hours) to set up. You do not need to spend time finding an affordable traditional office in a premium location, furnishing it, and buying equipment. If you need office space quickly and want to avoid the hassle, short-term lease agreements are an excellent option. In addition, you will also avoid a long negotiation process with your landlord. Most of the time, long-term leases involve a slow negotiation process.
- Support for scalability
Short-term office leases offer excellent support for scalability. With no lock-in contracts, your resources and operations can adapt to changes over time. Most short-term office spaces provide businesses with pay-per-use services (e.g., boardrooms and meeting rooms) that you can access as your business grows. You don’t have to pay for the space you don’t use. For example, with a virtual office, you can customise your package as you scale and access whenever you want a wider range of services, such as a virtual receptionist, mail handling services, etc.
- Premium services
Most of the time, short-term office space agreements include premium, top-notch services. If a landlord locks you in a long-term lease agreement, they may not have enough reasons to deliver excellent services (e.g., repairs and maintenance). If you fall into the trap of a bad rental agreement, changing office space isn’t that easy, especially when you have to pay high lease termination fees. On the other hand, most short-term office spaces do not require cancellation fees, meaning that short-term office providers have more reasons to deliver outstanding services (because they are aware that you are free to leave whenever you want).
- Continuity and contingency
As a business owner, you should have a continuity and contingency plan for times of crisis that threaten your company’s stability. Creating a plan B for everything is critical so that you can manage any potential risks. The purpose of a continuity and contingency plan is to enable your business to operate in times of crisis or keep the business closed for a specific period. For example, a short-term office lease allows you to consider relocation options if you need to vacate your premises and move to another location. To read more about creating and updating a business continuity plan, please check out the official website of the Australian Government.
- More time
Short-term office spaces support a more convenient way of doing business. Remote and hybrid work have replaced the traditional 9 to 5 business working hours. The Covid-19 pandemic forced most employees and managers to stop their daily commute. As a result, modern businesses have switched to hybrid and remote work policies that allow workers and business owners to save time on commuting and live a healthy work-life balance. Short-term, modern office spaces provide great support for remote and hybrid working (e.g., you can meet your team only for brainstorming sessions and other relevant meetings), meaning that you and your team will save valuable time.
Short-term office rentals are more convenient and affordable. They give you everything you need to successfully run your business without the hassle of a lock-in rental agreement.
Long-term office space requires a significant investment (e.g., maintenance, startup, and build-out costs – not to mention the money you pay for underutilised or unused space) and limits you to a physical office for long.
On the other hand, short-term office space is cost-effective, requires little investment, and provides access to cutting-edge technology and infrastructure (among many other benefits).
Has this post inspired you? If you are willing to try a modern office with first-class facilities and a month-to-month rental agreement (with no cancellation fees), the B2B HQ team would be more than glad to help you out.
You can enjoy the fantastic benefits of a flexible virtual office with no long-term commitments or lock-in contracts. Do not hesitate to contact us! We would be more than happy to provide you with further details about our cost-effective and modern office spaces.