Hi,

I have been involved in 5 start-up businesses and the 6th is well underway. The difference being that for the 1st time I decided to use a serviced office facility for the new business, rather than do the traditional thing and rent my own office. After all, renting one’s own office must be cheaper than paying someone else a lot more than the rent I’m being quoted, for some office space! Well, you are wrong! I know. I’ve been there many times more than the average person. I learned the hard way.

The rent cost of one’s own office is just the start. Take this list of additional items you will need to purchase to get your office up and running - for starters:
- Copier
- Printers (colour & mono)
- Kitchen equipment and catering supplies
- Internet service and if you are a serious player, a commercial grade service and professionally managed security service
- Phone lines, phone system, voicemail
- Furniture (desks, chairs etc)
- Cabinets
- Office fit-out (very costly)
- Receptionist/secretary/administrator to function properly
- Meeting rooms with video projector, whiteboard, easel etc
- Insurance
- Bond for the office rent (3-6 months of your rent)
- Alarm system and ongoing monitoring
- Temporary backup staff when someone is ill or on holiday

Plus, setting this all up takes a lot of one’s time and energy and requires ongoing maintenance. The latter is a real hidden cost and often overlooked.

Furthermore, when one rents an office, it is natural to have to rent more space than you really need, to facilitate growth of your business.

So between meeting rooms, reception, kitchen, admin and future space, you will be paying for a whole lot of dead space that is not applicable in a serviced office environment.

This time round, for a business called Newpath Web, my partners and I have rented limited space in Collins Street Business Centre, fully equipped and moved in with staff and notebook computers and in a matter of minutes we were up and running. No fuss, minimal cost and no wasted space.

And then as we started to grow and added more staff, we have enlarged the office space we are renting.

We have not bought one item of equipment, furniture, insurance, services etc. as it is all inclusive of the office rent.

We only pay for what we use without any capital investment.

No Director’s guarantees to the landlord or to a finance company for the leasing of equipment and multiple creditors to pay each month. Most of our running costs comprise salaries and a single invoice for the office.

One does not need to be a brain surgeon to work out which approach costs less.