Office business centers: Alternatives for startups
By MasLeslie Libeskind
Consider the happy dilemma of a skeleton engineering team with a great startup idea. Marketing has been conducted, the product tweaked for sale, a chief executive officer in place and venture capital on the horizon. But during the waiting period between investment, money rolling in and product going out for manufacture, that core group of engineers/company executives needs a location to meet with prospective investors and conduct the day-to-day business of a fledgling company.
Operating from your chief technical officers' basement may be a cost-effective measure. Still, perception counts, particularly when trying to make a favorable impression on venture capitalists, and it's key to have the flexibility to respond quickly to changing space needs during periods of growth. But since most startup teams aren't in a position to purchase a building, two options frequently considered are leasing independent, stand-alone space or becoming part of an executive office suite.
Independent, stand-alone space usually involves a lease between the tenant and landlord, with leases typically running from three to five years. Disadvantages here can often outweigh benefits. It may be difficult to forecast the company's needs three to five years down the road, and you could find yourself on the wrong end of a five-year lease for property you no longer find usable.
Stand-alone offices come with their own set of challenges and costs including administrative support and equipment lease or purchase (facsimiles, copiers, high-speed Internet, and phone systems). And then you can factor in the question of maintenance: who will clean your offices every night? Unless you want to incur an additional expense, chances are good that your sales director may become one of the most overqualified custodians ever to hit the market.
Eventually, leasing or owning your own building or office space may prove advantageous. But until you have a solid outlook on your product's market potential and have the established cash flow to support it, it's worth looking at the executive office suite, or office business center, as a practical alternative for your professional office space.
The office business center concept provides professional, "A" or "B" office space in a building with many other businesses. Amenities are typically available on an a la carte basis. A center may house 30 to 40 individual businesses. Some remain in executive office suites for years; others are there for a matter of months. Many centers do not require a lease or will provide a month-to-month arrangement.
Executive office suites provide common or shared office equipment and administrative services, all arranged by the owner of the office business center. The owner also arranges for cleaning the building and exterior maintenance, and provides furnishings, conference facilities, water, coffee, and more. Businesses who use an executive office suite pay proportionately for the services they use. A software startup team might buy several hours' time from the common administrative assistant, or pay on a per-copy basis for documents that need reproduction.
Another standard service offered by most executive office suite arrangements is an on-site central administrative staff to answer telephones for each business. Conference facilities are part of the package too.
In addition to the traditional support services and conference facilities, these centers often have training and seminar areas, Internet access, videoconferencing, mobile messaging, desktop publishing, courier services and in some cases an on-site gym or day care center.
Individual offices range from as small as an 8-foot by 10-foot room to a several-office suite. Cost for such office space is usually from $500 per month to around $3,000. Most business centers also offer "virtual" office options that are less expensive than physical space.
A presence in a professional center can go a long way toward mitigating the risks associated with a high technology startup and garnering the capital necessary to move forward with your venture.
Leslie Libeskind is president of Highland-March Executive Suites, with locations in Braintree, Beverly, Mansfield, and Westborough. She can be reached at 877-316-3600.