I haven’t discussed it very much on this blog because it is mostly irrelevant to the theme here (not sure there really is a theme any more :P), but I run a reasonably successful internet marketing business. The business is 99% B2B, and 100% numbers driven.
Using a combination of SEO and SEM marketing practices, my business seeks to provide business owners with marketing strategies that cash flow from day one. The less simple story is that we use a proprietary algorithm developed over the last eight or nine years based on market size, demographic data, and willingness to spend to find available channels for profitable advertising.
Mostly limited to financial-related companies, we’ve really come back with vengeance after 2008-2009 nearly left me completely broke. Man, the upside since the financial crisis has been outstanding, but the downside was absolutely horrendous. Have I mentioned I have gray hair at 21? Yeah. :-/ Luckily, side income from writing gigs elsewhere did supplement the downturn.
Anyway, after growing back out of the adspend recession, I wanted to further solidify my business and get an office for it. I had been, up to a few weeks ago, working entirely from home, and it wasn’t cutting it any more.
Why I didn’t like working at home
Working at home sounds like such a luxury, when in reality I’ve found it everything but. What I didn’t like:
Dividing time – This is the absolute hardest part of working at home. While working I would often look to my left to a pile of dirty laundry. Soon enough I’d start to get the urge to do a load of laundry while I worked. Okay, so that might take 10 minutes tops to set it and forget it, but then on the 50 foot walk back to my room I’d find hundreds more things to get in the way of productivity. Besides, if I’m doing laundry from 10AM-11AM, for example, does that mean I have to work until 6? More importantly, if I work at 6-9PM, does that mean I can goof from 8-11 the next day? See, it’s hard!
People – This goes with dividing time, but with a different perspective. I still live at home with the ‘rents; it works well for the budget and affording school, and I do as best I can not to burden them financially or otherwise. At any rate, they do an exceptional job of realizing when I’m in “work-mode,” as does my girlfriend, but there’s just something about getting away from a home setting that does wonders. The thing is, though, that I think there’s a natural tendency to think that people who are self-employed can do whatever they want, whenever they want. When I’m in “work mode,” I’m going to be doing work and avoid other things as best I can. I don’t want to be taking personal calls, much like those who work a 9-to-5 shouldn’t be taking personal calls on company time at their jobs. This gets lost on people–the office solved that, even if it’s because I won’t answer personal calls no matter what.
Having balance – I am an absolute workaholic; I can say that with certainty. My desire to work 24/7 on what I love has led to strains in relationships of all types—family, friends, the significant other, and even on occasion, school. I’d drop anything, all the time, to go do what I love most: working on my business, and working on new businesses.
Routine gets old – I’m ADD to the core. In a lot of ways, it has helped me, and in a lot of ways it hasn’t. I’m prone to picking something up, starting it, but never finishing it. Or starting a new project, spending hundreds of hours learning everything about it, and then just giving it up because I find out that what I truly enjoyed wasn’t the project itself, but the intellectual pursuit of a particular project. I can’t change the way I am, and I wouldn’t even if I could. If I weren’t the way I am, I wouldn’t ever develop an interest in both finance and marketing—two subjects where there is always more information to be consumed on an almost daily basis. But “who I am” sure does get in the way of “getting stuff done.” There are very few things to distract me in my new office.
Legitimacy – I couldn’t believe the number of people I know—friends, but not clients—who thought an office to be some mark of supposed profitability or legitimacy. Most aren’t business owners, and they’re definitely not working online, but it amazes me how people see an office as if it’s some massively awesome way to “go legit.” I think it’s silly, but that’s marketing—it’s not about what I as an individual think, it’s about what the aggregate thinks.
Most of my clients have known me for years, and I don’t need to “impress” them–the other day I was on a video conference wearing a summer camp T-shirt from third grade LOL. I don’t go looking for new business, either, so I can’t give you any input on whether having an address will help on that end. This is largely a moot point for me, but it may not be for you.
Shopping for an office: Tips and Tricks
I’ll admit that I actually started looking for an office nearly three years ago, but after making only a very broad look at the commercial real estate available in my area, I wasn’t very satisfied with what was up for rent. It was either too expensive (usually because it was too big; I run a one-man office) or too far from home.
I solicited a few quotes at that time, and never heard back from most people. From this, I have concluded that real estate brokers are lazy (they are) and don’t want to bother with small money people like myself.
It wasn’t until this year that I contacted a friend of mine from high school about leasing an office. His father owns the best real estate business in my area—they seriously own or broker every piece of commercial real estate worth owning—and I was a little worried that they wouldn’t want to bother with me either. I was wrong.
Get a broker – Don’t start shopping by yourself, and don’t even think about calling up or emailing a real estate broker. They’re lazy. Instead, show up, in person, and get the job done. That, or go talk to someone who you know is close to a commercial real estate brokerage. I couldn’t be happier that I sent my friend a message–on Facebook, no less–and that they took care of me from then on out.
Know your lease types – There are single, double, and triple net leases, and also gross or “all-inclusive” leases.
- Single net lease – The tenant is responsible for rent and property taxes.
- Double net lease – The tenant is responsible for rent, property taxes, as well as building insurance. The lessor pays for building maintanence, and upkeep.
- Triple net lease – The tenant pays for rent, property taxes, building insurance, utilities—practically everything, to be honest.
- Gross lease – Everything is paid for by the lessor, and the tenant just writes a monthly check. I signed a modified gross lease, where I get my space, utilities, and internet connection paid for by the lessor, and I have to cover insurance for the property I store in the building.
Know your risks – I signed for a small office in a building made up of a number of small offices. I have a door and all, but there are, at this time, I think about 8 other businesses operating in the premises. Originally, I didn’t want to sign for this property because it was being marketed as a net lease, where I would have to pay for property taxes in addition to my monthly rent. Not cool. See, if I have to burden a proportional part of the property taxes, they have little incentive to fill the space to keep total costs low. Alternatively, with a gross lease, I have zero-risk in rising property taxes. Ballin!
Know that everything is negotiable – This is the most important part. Everything in commercial real estate is negotiable, especially in this market. At the end of the day, I signed onto a 12-month lease, with two, one-year options that will allow me to continue leasing the property at a price adjusted for CPI-U, the consumer price index for urban workers.
Thus, if my lease expires in 12 months and I don’t want to renew, I don’t have to. If I do want to renew, I can at my current lease plus CPI-U. The current rate of inflation according to CPI-U is like 3.6% since last year, so I would pay 3.6% more for the next 12 months if I choose to renew (and if the price level stays similar). I have this option out two years, meaning I can stay here for 3 years with a largely known monthly rent.
Accessing your office – This is more important for small office space, but I looked at a few other offices that were in offices of other companies. I wasn’t impressed. For one, I don’t want to be a business in the middle of another business. Number two, I didn’t like that I could be there only during office hours. At my current location, I can come and go as I please, as I have an electronic key to get into the main doors, and my office has an individual lock. I am a college student, so the ability to stop by the office after night classes to go pick something up/print something off/whatever was, and is, very important to me.
So how much do I pay?
That’s personal. Nah, just kidding—I want you to know so you can see how crazy the commercial real estate rental market is right now.
I have an office that:
- Is in a highly-desirable part of town, with very-low crime
- Is in a medical services and technology building with people who aren’t shady
- Is less than 2 miles from my home
- Is only 125 sq feet (it has a window, at least!)
- Includes the cost of utilities, 6mb/s internet access (I speedtested it 😉 ) and upkeep for the general area not including my office
And I pay a whopping $131 per month. Yeah, not joking. I pay $131 per month, and had to put up only $131 as a security deposit. So I pay only $1.05 per sq ft, per month, with all utilities and related costs included. It is PHENOMENAL.
Note that I do live in a very inexpensive part of the country. However, I can say that there are probably spaces like this near you for a similar, geo-location adjusted price that should fit your fancy. At this price, and with the convenience, I’ll never go back to working at home again.
I tell myself that I can work only when I’m at the office, and in doing so, I resist (almost) all of the temptation to slave away at home. Finally, for once in my life, I have balance in work and life, and a necessary physical barrier that keeps me from working from 6AM to 2AM just because I want to.
All in all, I’m more productive, happier, and healthier all for the cost of $131 per month, or right around $1,600 per year. It was, and is, an absolute no-brainer.
So there you have it: the ins and outs of renting small commercial space for an online business. I wish that someone had told me all this before I went looking, so I’m glad to have written this for all the people who are looking to rent an office for their online business in the future.