Bootstrapping Tip: To rent or not to rent?

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Is your business expanding rapidly? Or are you just starting out and can’t decide where to locate your business? Many young entrepreneurs face this problem: do I rent office space right off the bat or not? If you are going to be considering this, here are a couple things to think about and consider.

Is it necessary?
Is taking on the extra expense of an office space really worth the benefits? Sure it is nice to have a place to “go to work” but what’s wrong with a room in your house or apartment? With an office comes the expenses of: office furniture, electricity, internet, water, heat/AC, phone line, fax line, etc. The list really can go on and on. If it is not necessary to expand into office of your own, then save the money for other stuff!

Will it meet your needs?
Look at your business and its needs. If you business is close to my eBay company, then you may have other options. Our first thought was to get an office space to allow people to bring items to us. However, the main reason for the space would be storage. Being able to store everything their, package items, and ship out sounded great, but the costs didn’t! If you are looking for just a storage area and won’t be doing remodeling, then a small cheaper rent office may be an option for you. Yet, think about the alternatives. With our eBay business, we have been looking at the costs of a climate controlled storage unit. Renting a storage unit can be very cost effective if you are just strictly using it for storage. Rent a decent sized unit, add some shelves, maybe a folding table, and rock and roll! If you were to get a storage unit, look for a climate controlled unit so that you can keep your products or whatever at the right temperature- not too hot and not too cold. Also, be sure to look through the renting agreements for the units, some storage companies specifically say that no business can be conducted from a unit or modifications can be made to it, so you have to consider your options (don’t have people meeting you at the unit, make sure everything you add can be removed).

Split the office with others
Do you know another small business or entrepreneur who is looking to expand into an office? Strike a deal with them to split the costs of the rent, internet, electric, etc with their business. Depending on your location, you could easily split your rent/office costs down to a couple hundred dollars a month. If the space is big enough, split it between 3 businesses – it gets cheaper and cheaper!

The best way to bootstrap on office expenses is to not have one at all. If you are able to set up shop in your parents basement, your dorm room, your apartment, or a spare bedroom, your office can be real cheap!

Who else has thought about saving money on renting office space? An advantage for keeping your business close to your home is the opportunity to work whatever your want – day or night.

So, who has experience renting an office space? Is it fun? What kinds of costs are you looking at?

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