Lately, a number of individuals have suggested that nPost rent some office space. We are a very lean organization and generally work our of our homes or coffee shops. We definitely see the value in renting office space in what it provides; dedicated space, conference rooms, a place to meet, the ability for everyone to work out of one space with the potential to collaborate much more directly and openly that you would be able to do so at a coffee shop.
All of those reasons are good and make plenty of sense, but are they worth the few hundred dollars to much more? Now, running the numbers it should be fairly easy to determine which option is best.
Home:
Free, and you get to meet at different locations.
Coffee Shops:
Ranging from as low as $66.00 / month (at 1 coffee per day at $3 / coffee) to $132.00 / month (at 2 coffees per day at $3 / coffee). Obviously this will range depending upon the margin that local coffee shops earn in your area. I try to stay to tea ($2.00) when I work out of coffee shops, so this is a pretty good deal. Also, I enjoy the level of activity and the chance to hop on free wifi!
Office Space:
Assuming space for three to four people office space can range from $400 to well over $1,200 / month. This can get pricey real quick, especially for bootstrapped startups. There are a number of options, especially here in the northwest; Souk LLC (Portland), ActiveSpace (Seattle), and others.
So the question each entrepreneur has to answer is can they afford $4,800 to$14,400 per year for office space. We will continue to work out of our homes and coffee shops (love that buzz). Our money is better spent on building the business, and I sincerely don’t see a negative bias from our partners in regards to working from home. The funny thing is that if you do rent space, you will still be spending the money on coffee…
I would be interested in hearing your thoughts on the value of working out of an office? Are you doing it and what value does it bring you?
About nathan kaiser
For me, an office is essential, primarily because I have little kids at home, and having a separate space is the only way I can be productive.
Of course, it helps that I have one heck of a sweet sublease deal, so it’s cheap enough for me. Unfortunately, I’ll be losing that sweet deal soon, so if anyone has some office space they aren’t using in Kirkland, let me know.
Having a virtual office is a powerful option. It’s more More than just saving the money — there’s also the vast amounts of time spent searching for and then managing the office space and everything in it. Even if you lease the furniture and office equipment, you still have to make selections and deal with the leasing companies. The time sink of all this is way less than the time spent going to & from coffee shops.
OTOH. It’s a clear win to be able to speak to someone just 10 feet away on a moment’s notice. IM and e-mail are just not the same. E.g.: “I can’t see where the problem is. Can you come take a look at this code?” Being able to quickly brainstorm, meet, request, collaborate, exchange, and announce is a powerful advantage. The spoken word has MUCH higher bandwidth and lower latency than written text. (Yes, there are more distractions too; everything is a tradeoff.)
Bottom line for me is, If I had lots of money, I’d have an office, but I’m very happy I work in an industry where that’s an option and not a requirement. If I were working on solid rocket motors, I wouldn’t be as lucky.
We started our company in college and the second we graduated we started touring office spaces thinking that it’s something you had to have as a business.
3 months and at least 15 coffee shops later, we’re still cranking and still have a PO Box as our only address. It’s definitely true that coffee shops are the new garage. The tough part of course is that everything has to be mobile when you don’t have an office: while working on the business plan I was lugging my laptop (and everything else I could shove in that bag) as well as 2 different business plan books, a calculator, dozens of printouts, Art of the Start, High-Tech Startup, and enough change in my pocket to buy tea everyday only in quarters. Needless to say, it was not ideal.
For the startup phase though…tea’s cheap (sorry coffee drinkers…enjoy your drip).
I typically am working out of a coffee shop or the library, but I spend a lot of time on the phone and my local Starbucks is too noisy, and my local library is too quiet for me to comfortably spend time on the phone. So… I just grin and bear it because like most startups, I don’t want to spend my money on something if I don’t have to. Coffee is something I definitely have to have, but 4 walls are not… even though I spend my day writing about office space! Eventually I will rent an an executive suite or join a coworking facility, but for now the coffee shop is perfect (enough).