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I Got Stuck in an Office Lease
Real Stories from Entrepreneurs
Pia started leasing an office very soon after starting a business, without considering that her business might change. She suggests that new business owners plan carefully before leasing an office to avoid the problems that she faced.
“Office space is an important part of many businesses, but securing a good leasing contract is essential so that you don’t get stuck like I did. Long before you start researching locations and buildings, first objectively assess whether your business really needs one in the first place. Signing up for the services of a virtual office is an effective way to fulfill your need for telephone and fax messaging without getting stuck in a long term contract. That’s what happened to me.
The first problem was that contracts for leasing an office tend to run for longer terms that residential ones. Mine was a three-year minimum and the real problem was that it is hard to really estimate the amount of space you’ll need over this period, especially for a new business. To save money, I went for a conservative estimate by assuming just a small amount of growth, but the reality was we ended up expanding really quickly. This was obviously good news for my company, but I couldn’t really enjoy it because we had more than outgrown the size of the office space.
If there had been empty spaces near my existing unit, or at least in the same building, it would have been easy. Unfortunately, I’d never thought of that. The cost of breaking the lease was too high and the landlord wasn’t willing to make any allowances because breaking the lease meant that my company would have to move out of the building. He had nothing to gain from being flexible, so there I was stuck in an increasingly cramped office for two and a half years.
With no other options, my company stayed in the premises. Eventually, we had to take on more space in another building, which was inconvenient to say the least. This time I was a little more savvy about how to go about leasing an office. I chose a larger unit with adjacent space for easy expansion. I also negotiated slightly more favorable terms that would allow me to cancel my contract with lower penalties. Now I feel better prepared to handle the uncertainty of business.”
So… what is your experience with an office lease?
If you have an interesting point of view or an experience you would like to share please do so in the comments below, we would love to hear from you.