Any kind of business needs an office to conduct its activity, whether that office is in the basement or in a high-rise building. For a growing business, the question of whether to rent or purchase an office is crucial is decision. Which is the more practical and more beneficial approach? There are several factors that a business owner must consider in making a decision, and here are some.
The financial factor is the first and foremost the most crucial factor to consider in deciding whether to rent an office or purchase one. The question “What can we afford?” should be the first question a business owner must answer. Purchasing an office requires a huge amount of money while office rentals ensure that you do not have to pay the whole amount up front when you lease an office space. For example, an office space may cost about $200,000 and commonly, you have to pay that amount in one shot. However, when you choose to rent an office space in the same building, it may only cost you around $4,000 every month. Purchasing an office space may also require additional fees. On a positive side, purchasing an office will save you a great deal of money on rental.
The Varying Cost Factor: If you own your office you don’t have to worry about varying market price. In fickle economy like ours, no one knows when the rent will goes up. In leasing an office, the varying market might be a great disadvantage to you especially if or when your lease expires. Looking at the varying cost of rent market should be one of the deciding factors whether you should rent or buy.
The Growth Factor: Look at your long term plan. How do you see your business in the next 2 years? This factor deals with the situation in which your office strength grows in a short span. If you feel your office would expand soon, it is better to buy an office area. However, if you purchase an office space that cannot accommodate the growth of your business, it would be difficult to find a new place. Whereas, when you are just leasing, you can simply wait for the lease period to expire or you can end it when you need to.
A smart business owner must have a short-term and long-term plan. For a short-term plan office rental is a viable option. While purchasing an office space for the growing business must in his long-term plan.