Our Top 9 Tips
Breaking away from a senior role to start your own business is about as exciting as it is daunting. You may have considered it for years, or you’ve seen an incredible opportunity and you’re ready to pounce.
In the current employment climate of the sharing economy and technology, we’re seeing more and more breakaway tenants coming to us, ready to lease their new premises. We’ve helped accountants, lawyers, financial services, executive search businesses, foreign currency traders and barristers leave their current workplaces and relocate to new office to start their own businesses.
Have you committed to breaking away and starting your own business? Here are the nine things you should know before you leap into your lease:
Set up a corporate entity
Before you start the office search, get advice from your lawyer and accountant about how to best set up company structures and trading names. The property owner will want to know what style of business you’re operating and that you have adequate experience to take on a lease, so be prepared for these questions.
Understand your setup costs
Setting up a new office can often be very expensive, even before you start paying rent. The standard bond or bank guarantee is six months gross rental (plus GST). If the premises has no fit out, you’ll need to pay for that too - budget on anywhere from $600 sqm to $1,000 sqm to build and furnish an empty office. You’ll need about 10m2 per person, so for a team of 10 will need about 100m2, this factors a reception, boardroom and open plan work areas.
Research, Research, Research
Before you sign a lease, do your homework. There are many great sources of information - agent websites, as well as industry bodies and government sources - which will help you understand prevailing market conditions and what rental and lease incentives are on offer.
Manage your standards
Chances are, in your current role, you’re working in a premium or A grade office tower with views, first class facilities and a top fit out. Be prepared to lower your standard. You might need to make some compromises to get your business off the ground (and into the tower!).
Which lease term?
Your lease terms should be based around your growth strategy. If you’re planning to grow quickly a shorter lease is the best option, or you can take on a sub lease from another tenant walking away. Alternatively, you can take on a longer lease and then sub lease the remaining term when you outgrow the space. A serviced office or co-working tenancy is another option if you’re uncertain of the space you need - this option works well until you grow large enough to warrant taking your own space. It can be more expensive but the shorter lease terms give you valuable flexibility.
One voice, One agent
If you’re working with a few colleagues, allocate one person in your team to do the searching. It can get confusing if there are too many people involved - multiple tenants contacting multiple agents is a recipe for disaster - so research the most active agent in the market segment you’re targeting and try to focus your search with that one agent. Because you’re breaking away from your current employer, confidentiality is important and dealing with one agent will ensure your search is treated as such.
Sealing the deal
There are many variables in commercial leasing so it pays to have a short list of two or three options in case your dream property doesn’t come to fruition. Be prepared to haggle on terms and don’t be afraid to ask the owner for some concessions - many lessors will offer deal sweeteners. Be prepared to move quickly and have a lawyer ready to review a lease proposal and documentation on short notice.
Moving in
It pays to shop around for a good builder or project manager - they will be experienced in cost efficiencies and be able to add value in areas like product sourcing and arranging furniture. Source two to three quotes before you decide. Your agent can help point you in the direction of qualified professionals, to help you save time and money. Be sure to arrange your data connection well ahead of time, it’s critical to the smooth transition into the space.
Managing your lease
Once you’ve signed, the clock starts ticking on your current lease. You might need to pre plan your next move or lease renewal six to nine months in advance, so keep in contact with a good agent with their finger on the pulse. Working with an agent who understands market rents and current lease incentives will open up your options when the fun starts again at renewal time.
At Ray White Commercial we have offices ranging from 20m2 and larger, get in touch today and see if we can assist finding your first office.
Anthony Harris
Principal | Commercial Office Leasing Sydney
M 0409 319 060
E aharris@raywhite.com
Ray White’s top 10 listings for February: (Click on address to view listing)
Terrace 40, 42 Young Street Sydney
Suite 28.02, 1 Farrer Place GPT Sydney
Suite 9.03, 46 Market Street Sydney
Level 10, 387 George Street Sydney
Level 6, 23 O'Connell Street Sydney
Level 2, 1 Barrack Street Sydney
Part floor 23, 9 Castlereagh Street Sydney
Suite 2.01, 24 Hickson Road Sydney
Part Level 3, 22 Market Street Sydney
Level 4, 86 Liverpool Street Sydney