How to Setup Office for a Startup?

By | May 27, 2015

Starting up a new business demands lot of time and effort. It is important to have an office for the business. It is a substantial investment for the business. Many consider that working from home is simpler and does not demand a major investment. But they fail to see the drawbacks that come with it. Building a team will not happen when working from home. The quality of the work could take toll without any factor to motivate or set deadlines. Having a professional setup helps in minimizing the distractions around and motivates one to work better. For a startup, surrounding make a lot of difference.


Scale of the business, cash flows and practical needs  play a major role in setting up office for a startup. Startup’s office talks a lot for the business. It brings in the first impression of the company for the customer. So setting up an office space should not be done in haste. The different aspects of setting up workplace is discussed below:
1.Finding the location:
Choosing the right location for a business is vital for any business and so, it requires precise planning and research. The location of the startup has the power to make or break the business. Some research has to be done prior to choosing the location to avoid going wrong with it.  It involves considering demographics, assessing supply chain, scoping the competition, staying on budget and understanding state laws and taxes. “In the brick-and-mortar retail world, it’s said that the three most important decisions as location, location and location,” says Irene Dickey, a professor at University of Dayton’s Business School. She also added, “Careful determination of new sites is critical for most retail and consumer service business.”

There are various factors that has to be considered while choosing the location of the workplace:

* Budget:
The company’s financial situation decides whether the office space has to be leased or to be bought. Even the locality of the office is affected with the budget. For instance, renting or buying a space in New York is much expensive when compared to renting similar area specifications in Chicago or Portland. Apart from the cash in hand, the entrepreneur can avail the business property mortgage loans from various banks. Some even add-on banking products as a package to allow your company to earn attractive interest returns while meeting the company’s financial needs during the mortgage period.

For tech startups, it is important to be aware of the locations that come with tax benefits. For instance, Keystone Innovation Zones at Pittsburgh provides tax credits for businesses that are ready to operate in particular locations. These are spaces in the city where the economic development is encourages. Startup could qualify for tax exemption or tax credits just by simply moving into the zone.

* Transport:
It is important to look at the accessibility to the place, if it is convenient to access. Convenience of the entrepreneur has not to be considered but also the how convenient it would be for the clients to come to the office. As transportation costs are on surge, people will not be willing to travel to patronize a business. If leaving a metro for a cheaper place in the suburbs are preferred, it is important to consider whether the less expenses will make up for the possible loss of clients. Even in the age of video conferencing and Skype, face-to-face or direct meetings are important and should be manageable. Parking facilities are also important for it could cost to employees and customers. Negotiating special employee rates and validating customer’s parking tickets are good ideas, but make sure it fits the budget.

*Business-friendly area:
Understanding the legal implications and regulations imposed on the businesses in particular location is essential. If the business can afford, it is good to have a business counselor or a legal advisor. Many states in the country offer online tools to help small business owners start-up and succeed. Many local governments offer various privileges for the small-scale businesses if started in a particular locality which can work at the advantage of the business. There are local community resources like SBA offices, Small Business Development Centers, Women’s Business Centers and other government-funded programs especially to support small level businesses.

* Neighborhood:
It is important to check the neighborhood and if the workplace is close to business people like vendors, suppliers, banks. If the office space locality has a bad reputation, it could affect the business in the eyes of the client and customers. Also, sourcing and retaining good resources and talent in an unsafe neighborhood would not be an easy thing. Check for the details of the place and locality online or by enquiring it to others. Clearly study about the neighborhood and locality before stepping into it.

* Space and Layout:
The foremost to consider is the size of the space one would require for his office. Employees, equipment and nature of business are important to decide on the space required. If the startup is tech-based or creativity-based, the office may require more space for the ideas to grow from collaboration. But if it is a serious business like that or law firm or import/export, space could be smaller and more office-focused. Also, ensure some space for meeting rooms, pantry in the office. The entrepreneur may also have to think about whether the business is likely to grow and expand in near future and if the prospective office can accommodate the change in growth. The common mistake done by many startups is that in an attempt to cut costs, they make the mistake of renting office space that is too small. This may lead to a cramped and uncomfortable working environment that will take a toll on the productivity of the employees and may result in high staff turnover.

* Running Costs:
Entrepreneur need to know how much will the space cost to run before confirming on the location. Apart from the rental expenses, it is important to think about cost that could incur for lighting, air conditioners, electricity, water etc., The rental company would be able to give a picture of the energy consumption but the rest is in the hands of the entrepreneur. The electrical equipments and other gadgets that are needed for the business are to take in mind to make the calculations.

2.Fitting out the workplace:
The initial phases of a business startup require smart decision-making to increase the chances of long-term success. A workplace does not only require right employees to make the office efficient but it also requires right equipments. Perfect fit between the employees and the equipments make the office a comfortable workplace. To make best use of the resources, clearly list out the total number of employees and the work space required and prepare a list for the important equipments that are required. This would be useful to calculate the required budget for the office. One of the key decisions to make is whether to buy or lease office equipment. Some businesses choose office  equipment leasing while other choose to buy.

* Leasing equipments:
Leasing is an excellent decision for a new business, if the entrepreneur want to eliminate an upfront cash expense and require equipment that is always up-to-date as the business progresses. It is a process of obtaining the use of machines, other office equipments on a rental basis. Equipment leasing can provide a lifeline for businesses hard on cash that are in need of the trade.  Ownership rests in the hands of the financial institution or leasing company, while the business has the actual use of it.

– Does not disturb the cash on hand for working capital
– Less pressure on the company’s balance sheet position.
– Initial expenses are very less
– Access to cutting-edge office equipment and technology as it is easier to update the equipment every year or two.
– In startup business, it is likely for the owner to be obliged to put his/her personal credit on the line in order to secure the lease.
– Higher price over the long-term
– Commitment to hold the equipment for a longer time.
– In case of termination of the lease, the entrepreneur is liable to pay a penalty.

* Buying the equipments:
Buying the equipments means spending the cash in hand to acquire the machinery or the office equipments. It becomes the assets for the business. There are various banks in the country that could help is securing loan to purchase company equipments.
– Entrepreneur can take advantage of tax depreciation benefits on the items that the company owns.
– One time charge. No monthly additional expanses would incur.
– Purchasing equipment adds assets to your business.
– Tax deductions
– Huge investment required
– Not easy to upgrade
– Have to bear all the charges that incur in making the equipment work.

Whether leasing or buying it is important to secure the equipments with insurance to help reduce the potential financial losses caused by theft, robbery or accidental damages.

3.Setting up computer systems:
In the current scenario, whether it is a small-scale business or large-scale business, every business functions with the computer. Efficient computer system and network is crucial for company’s daily operations. Sorting out the right software for the business can make a huge difference to operating efficiency. So it is vital to make smart choices in shopping for software and IT products that suit the company’s requirements. There are two types of software – Off-the-shelf software and  built-to-order software.

Off-the-shelf software are easy to get and readily available software in the market like the Tally accounting software. They are cheap and ready-to-use. Most of the software under this category does not require special skills to operate it. It is mostly used for handling office documents. On the other hand, build-to-order software are customized to clients based on their individual requirements. It is more expensive and generally run in an operating environment that are tailors for the individual needs. Also, it need technical skills to use the software.

Before buying the software it is important to know how valuable it would be for the business. It should be checked if the uses of the software is in line with the demands of the company. Network security is vital for the configuring the computer system as it helps in protecting the confidential business details.

4.Setting up office interiors:
Once the task of buying and installing the equipment and computers are done, next is to arrange them at the office space. It is important to plan the layout of the office to decide what should be placed where. The walls can be painted based on the taste of the entrepreneur. Keep the color shade mild for serious business. There are many advertising firms who have decorated the walls with simple idea but making it look spectacular. Furniture can be bought to suit the budget of the company.

Central Bloomsbury

Central Bloomsbury

The mantra is keep the interiors of the office simple and classic unless the business demands something more jazzy. It is better not to spend too much for interiors and furniture at the initial stage of the business. This is the final step to set up an office for the startup. Once the office area is set up the company is good to go and start welcoming its clients.