Since startups are in their very first stages of operation and often bankrolled by founders trying to capitalize on in-demand products and services, these companies frequently begin in home offices and spare garages. But as you gain additional funding from investors and begin to find success, your startup’s needs will grow and change.
Regardless of what industry you’re working in, you may need to hire new employees, outsource tasks to freelancers, purchase new equipment, and expand to a larger space to accommodate your startup’s growth. In this article, we discuss the considerations that startup owners should keep in mind as they begin to consider an office rental NYC.
The Rent Price to Revenue Ratio
One question that many owners and co-owners of growing startups have is whether there’s a rent price to revenue ratio that is fiscally responsible. If you’ve gotten used to working out of your house, an outside office space may seem like just another added expense, and it can be difficult to determine whether a rental expense will positively or negatively affect your bottom line.
To make this decision, consider the cost per square foot, square feet per person, and occupancy cost per person. Other considerations are the total lease amount of the term, the effective rental rate for the lease term, and the monthly and yearly rent amounts. Depending on your industry, rent-to-revenue ratios can vary from two percent to 15 percent. To determine your ratio, divide the annual base rent or gross rent by your business’ anticipated yearly sales. If your rent ratio is low, your business is in a good position to remain stable in spite of market fluctuations. But if your ratio is high, you may want to negotiate a lower rate with the landlord or look for more affordable rental options.
Benefits of Renting for a Startup
Renting an office space makes a lot of sense for a startup in certain circumstances. Here are some of the reasons why renting an office space is the preferred option for many entrepreneurs.
• Healthy separation between work life and home life
• Stronger connections and accountability between management and employees
• Sculpt a company culture that suits your brand
• Exude an image of professionalism with a coveted New York mailing address
• Stimulate your creativity and productivity in a focused work environment
• Greater networking opportunities
Office Space Rental NYC Considerations
But of course, office space rental in NYC isn’t right for every business, and making that big move is all about timing. Fortunately, there are many options available for renting a space, including shared, co-working, sublease, direct, and temporary spaces. Temporary spaces, for example, are great for startups because they allow you to “test the waters” and see whether an outside office is the right fit for your business. This type of flexibility is incredibly valuable to startups that are figuring out things as they go, as inflexible leases could trap you with obligations you can’t pay for and drain your resources.
At NYC Office Suites, we provide furnished, equipped, and staffed Manhattan temporary office spaces with all the amenities and support services you need to grow your startup. Rental contracts can be for as short as three months, and we offer many different sublease configurations to accommodate executive offices, shared offices, co-working offices, and team project offices.
Tips for Finding the Perfect Office Rental NYC
With all of the other work going on at a busy startup, it can be a challenge to put forth adequate time and resources to find the perfect office space for your company. Here are some tips to help you get started.
• Gather financial documents like tax returns and bank statements to show the building owner
• Understand how much space you need and allow for future growth
• Think about where your employees live and would need to commute from
• Set a strict budget and stick to it
• Choose a space that represents the ideals and culture you want to promote
• Consider amenities that you would want nearby your office space rental NYC
• Devise a backup plan if you need to back out of your rental commitment
Advantages of Office Rental Manhattan
Once you decide that you’re ready to start searching for the perfect office space, the next question is where should that office be located. You could choose a space in the center of where all the action is happening in the city (such as Grand Central or Rockefeller Center office space), or you could look for cheaper spaces that are farther away on the outskirts of town.
New startups often crave the vibrant atmosphere and potential for networking opportunities in the middle of New York City but are scared away by high costs. However, those rental costs drop significantly when you start your rental journey with temporary office space provided by NYC Office Suites. Our private, full-time office rental Manhattan pricing starts at $595 per month, largely inclusive. You also have access to meeting rooms for rent and virtual office space for added benefits to your startup. If you choose an office space in a more remote area outside the city, you could be limiting your hiring options for new talent, making existing employees’ commutes miserable, and isolating your business from advantageous relationships.
Call NYC Office Suites at (800) 346-3968 or contact us online for more information on renting office space for your startup!