4 Essential Tips for Setting Up Your First Office Space

Setting up a first office space is a significant milestone for any startup or small business. Whether you’re growing out of a home office or ready to build a stronger team culture, securing office space is essential. However, it raises questions about cost, the rental process, and which workspace type best suits your needs. This guide answers key questions such as how much it costs to set up a small office, how to rent office space, and the advantages and disadvantages of coworking space vs. traditional office space.

A welcoming reception team can make a long-lasting impression on your business when you have onsite meetings.

1. How Much Does It Cost to Set Up a Small Office?

When setting up an office for the first time, many startups and small businesses wonder about the costs involved. Understanding the potential expenses will help you budget effectively and avoid any unexpected costs down the line.

Key Costs to Consider in Office Setup

Office Rent: This will be one of your biggest expenses. Office rent varies based on location, type of office space (traditional, coworking, or serviced office), and lease terms. For small teams in London, you might pay anywhere from £500–£1,500 per desk monthly. Renting a private office in a coworking space may provide more flexibility in lease terms and amenities compared to traditional leases. Overall, the initial set-up cost for a small office can range from £5,000 to £10,000.

Furniture and Equipment: Essential items include desks, chairs, storage, and computer equipment. For a basic setup, expect to budget around £3,000–£5,000 for furniture and equipment for a small team. If you choose a serviced or coworking space, furniture is often included, reducing your upfront costs.

Utilities and Internet: Utilities, such as electricity, heating, water, and high-speed internet, are essential for office operations. In traditional office spaces, these might cost between £200–£500 monthly, depending on office size and usage. Many coworking spaces and serviced offices include utilities in the rental fee, which can simplify budgeting.

Business Rates and Insurance: Business rates apply to most office spaces in the UK and are calculated based on the rateable value of the property. Expect to pay around £200–£800 monthly for business rates, though coworking spaces may include this in the membership fee. Office insurance for contents and liability is also essential, and rates vary based on coverage.

IT Infrastructure and Security: Setting up secure internet, IT support, and physical security (such as locks and alarm systems) can add to setup costs. If your business deals with sensitive data, factor in additional costs for secure systems. Managed offices and serviced office spaces often include basic IT support.

Communal lounge & breakout area at Runway East.

2. How to Rent Office Space: Step-by-Step Guide

Renting office space requires careful consideration to ensure it meets your business needs and fits your budget. Here’s a step-by-step guide on how to rent office space and what to expect throughout the process.

Define Your Office Space Requirements

It’s essential to consider the specific needs of your business. Are you seeking a private office for focused work or a shared office space for networking opportunities? Define factors such as:

Size Requirements: Calculate the number of desks and breakout areas your team needs.

Amenities: Determine if you need amenities such as conference rooms, communal lounges, and a kitchen.

Budget: Decide on a budget for both initial setup and monthly rent, factoring in other expenses like utilities and business rates.

Choose a Location

Location is crucial. Central areas may offer better transport links, and nearby dining, and networking potential, but they come at a premium. Consider whether being close to clients, partners, or specific industries is necessary for your business.

Decide on a Lease Type

There are three main types of office space leases for startups:

Traditional Lease: Often involves a 3–5 year commitment, providing full control but also requiring a significant upfront cost.

Serviced Office: Offers shorter leases (sometimes month-to-month) and includes amenities like reception, cleaning, and internet. Great for flexibility.

Shared / Coworking Spaces: Ideal for startups needing flexibility, with short-term or monthly agreements, access to shared facilities, and a built-in community of other businesses.

Schedule Viewings and Compare Options

Take the time to visit different office spaces and truly assess key elements such as lighting, layout, and the overall atmosphere. Don’t forget to ask about hidden fees, lease flexibility, and available amenities to ensure you maximize value for your investment. Finding the right workspace is crucial for your success!

Negotiate Terms and Finalize Your Lease

When negotiating, focus on important aspects such as rent increases, renewal options, and notice periods. Finalize the agreement to ensure it meets both your business’s short-term and long-term goals.

Leased workspace by British Land on Blossom Street.

3. Shared Office Space Options for Startups and Small Businesses

Shared office spaces, such as coworking and serviced offices, are popular among startups due to their flexibility and lower costs. Here are some of the primary types of shared office spaces available:

Coworking Spaces

Coworking spaces are open-plan environments with shared amenities and community events. Memberships are typically month-to-month, and you can choose between hot desks (first-come, first-served) and dedicated desks (reserved for you). Popular coworking spaces in London include WeWork, FORA, and LABS.

Advantages:

Flexibility: Month-to-month memberships and easy scalability make coworking ideal for growing businesses.

Cost-Effective: Utilities, internet, and cleaning are usually included, reducing overhead.

Networking: Coworking environments foster networking, which can be beneficial for client acquisition and partnerships.

Disadvantages:

Limited Privacy: Shared spaces and coworking are more communal, and noise may be an issue.

Less Control: Limited customization of the space means less brand presence.

Serviced Offices

Serviced offices provide private suites within shared buildings, with amenities such as reception services, IT support, and access to communal areas. Examples of serviced office providers, include WeWork and Landmark. Both of which offer flexible lease terms.

Advantages:

Privacy: You’ll have a private office space but access to shared facilities.

Flexible Leases: Shorter, flexible lease options reduce long-term commitments.

Fully Furnished: Offices typically include furniture, reducing upfront costs.

Disadvantages:

Higher Monthly Fees: While less than a traditional lease, serviced offices can be more expensive than coworking memberships.

Limited Customization: Like coworking, serviced offices often restrict branding and customization.

Managed Offices

Managed offices combine traditional and serviced spaces, providing customization with flexible lease terms. These offices can be tailored to represent your brand, featuring furnishings and layouts designed for your team.

Premium office space with Uncommon in Holborn features a communial bar and coworking lounge.

4. Coworking Space vs. Traditional Office: Which Should You Choose?

When determining whether to opt for coworking spaces or traditional offices, it’s essential to consider various factors such as your business requirements, budget constraints, and future growth strategies. This guide provides a comprehensive comparison to assist you in making an informed decision.

Coworking Space

Advantages:

Flexibility: Many coworking spaces provide flexible month-to-month memberships, making it easier to adapt as your team evolves.

All-Inclusive Costs: Most coworking spaces cover utilities, internet, and amenities in the membership fee.

Community and Networking: Coworking fosters a social environment, great for collaboration and building connections with other startups.

Disadvantages:

Privacy Concerns: Shared spaces mean limited privacy and potential distractions.

Less Control over Space: Limited ability to brand or customize the area to reflect your company’s personality.

Traditional Office

Advantages:

• Privacy and Brand Control: A traditional office provides a dedicated, branded space, ideal for client visits and building team culture.

• Customization: You can personalize the office layout, furniture, and décor to fit your team’s needs.

Disadvantages:

• Higher Initial Costs: Furniture, utilities, and setup fees can be costly.

• Long-Term Commitment: Traditional office leases typically require a commitment of 3–5 years, which can be restrictive for startups needing flexibility or having the financial backing/accounts to secure the lease.

Which Option is Best for Your Startup?

Select a coworking space if your team needs flexibility, networking opportunities, and a budget-friendly setup. Opt for a traditional office if you value privacy, control, and a permanent space that strengthens your brand.

Many serviced offices have shared kitchen facilities and breakout areas for coworking.

Conclusion

Setting up an office space is a crucial step in establishing your business. By carefully evaluating costs, rental options, and different types of workspaces, you can create a productive environment that meets your team’s needs. Whether you opt for a coworking space due to its flexibility or a traditional office for its control, each choice offers unique advantages.

By considering the expenses associated with setting up a small office, understanding how to rent office space, and weighing the advantages and disadvantages of coworking versus traditional office options, you can make an informed decision that aligns with your business goals.

For a closer look at the office spaces available and to explore options tailored to your needs, feel free to browse our website or submit your details. We’re here to help make the office search as seamless and rewarding as possible – and to guide you toward a workspace that truly aligns with your company’s vision.