Offices & Operations mentor Mie-Yun Lee responds to the following question from an inc.com user:
We are a small engineering firm (11 people), and the lease on our two small offices will be up in one year. We need one big office. Would it be better to buy, build, or lease an office?
Mie-Yun Lee's response:The quick answer to your question is it would be best to lease, but let me explain why.
The type of office you need is widely available. As an engineering firm, your requirements are probably pretty straightforward. You probably need a combination of closed offices and open space to house workstations, a conference room or two, a reception area, a computer server room, and a kitchen area.
While you could build this kind of office, it is the least practical option unless you have very specific needs.
If you really want to own your own building, buying an existing property is a better, but still pricey, option.On the downside, real estate prices are at an all-time high in many parts of the country. Also, owning your own office building comes with a lot of additional work and expenses. You'll have to deal with nuisances such as annual property taxes, as well as daily tenant-related maintenance issues if you plan to lease some of your space to others.
However, if you are looking for another revenue stream or already have building management experience, owning your office building does have some perks. You can do whatever you like to the design and décor. You won't have to worry about losing your space to a higher bidder every time your lease is up for renewal. And if the building is large enough, you'll have room to grow your business.
But in most cases, leasing is the most practical and affordable option for a small business. A commercial real estate broker can help you locate available office space. But before you even start talking to one, you should calculate roughly how much space you'll need. To get you started, private offices are 120 to 200 square feet each, workstations are around 36 to 80 square feet, and conference rooms for 10 to 12 people are around 200 to 375 square feet.
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