Finding the First Office Space for Your Small Business

If you’re ready to move your small business out of your home—where many small businesses start out—congratulations! This is an important next step for your business, and that probably means you’ve got a list of questions and concerns. You’ll want to balance the added cost of working outside the home against escaping the distractions of home (unfinished chores, pets, children, that book or TV show you haven’t finished) and becoming more productive.

Before you take the big leap, you need to define your needs, define your budget, and explore your options.

A coworking space vs your own space

Coworking spaces have grown in number, variety, and popularity as more and more Americans have opted to work for themselves. Companies like Uber, Instagram, and Spotify began in coworking locations. Clearly, they have something—actually quite a few things—going for them!

Coworking spaces are turnkey locations with basic office furniture, office equipment, parking, WiFi, coffee, etc. shared among self-employed professionals. Freelancers and entrepreneurs can enjoy a communal, collaborative setting that can also include networking, both to find professional services from other independent workers as well as to market your own. In design and layout, coworking spaces run the gamut, from totally open spaces with a mix of communal tables, individual desks, and couches to a collection of private offices and meeting rooms.

The cost to use these spaces is structured like a membership, with either monthly, weekly, hourly, or sometimes pay-as-you-go payment options. This enables coworking locations to offer professional workspace without the high upfront costs and long-term commitment of leasing a private office space. It also provides growth flexibility for start-ups that might want to add new employees—all they need to accommodate a growing team is add memberships.

Membership typically includes:

  • A desk with chair (may be any available desk, a dedicated desk, or a private office)
  • High-speed internet (wired or WiFi)
  • Access to shared office equipment
  • Bookshelf space
  • Free coffee/tea and kitchen facilities
  • The use of conference rooms on a reservation basis

Additional bonuses of utilizing a coworking space include not having to worry about building maintenance and cleaning fees, and the all-inclusive nature of membership payments makes accounting and tax preparation simpler.

Now, there are plenty of reasons why a coworking space wouldn’t work well for your business, so leasing a private office might be a better option. A more traditional office offers individualized spaces for larger teams, private space when dealing with sensitive materials or client confidentiality, areas suited for client meetings, and a chance to customize your space.

All of that, however, almost always comes at a steeper price. And a longer commitment, as most contracts range from two to 10 years. You’ll probably also need to purchase or rent all of your own furniture and equipment, not to mention services, insurance, and bulk coffee.


Rural or urban, finding the right office location can be challenging. There’s a lot to consider: ease of getting there for you, staff, and clients—including multiple transportation options like public transportation nearby and bike storage; parking availability; professional appeal of the location; safety of neighborhood; and, of course, cost.

Central locations in cities will always be more expensive, with space at a premium, but the tradeoffs include possible convenience for clients and nearby amenities. Locations further from the city center will boast more space for less and possibly more options for signage and available parking. If you’d like the perks of a more central location but are concerned about leasing costs, consider transitional neighborhoods surrounding the more expensive urban centers for the best of both worlds.

Finally, when looking at office locations, consider your type of business. Are clients and/or partner businesses more likely to be located closer or further from the city? Does your business fit in with the neighbors? Are passing foot traffic and “drop-in” visits important?

Budgeting for expenses

If you’re happy with a coworking space and can afford the membership fee, you should be set until your needs change or your business expands. Obviously, if you decide to lease a space, your budget for office expenses will need to be bigger and more detailed.

Make sure to have line items in your budget for:

  • Deposits for utilities, services, and possibly first/last month’s rent
  • Furniture
  • Décor and plants
  • Equipment and supplies
  • Insurance
  • Coffee supplies
  • Signage and printed materials
  • Phone system
  • Computer network and internet connection

Be sure to ask about who pays for repairs and maintenance for your space. Some leases include utilities, security, common areas, and parking in their cost, but others don’t. Be sure you’re not paying for items you won’t be utilizing. If you’re sure a private office is the way to go, but money is tight and credit limited, consider renting furniture and equipment or negotiating a shorter lease.

No matter which type of space you choose for your small business, remember to track all business expenses for tax purposes. Also remember to adjust your deductions if you once claimed but are no longer using part of your home as a regular home office.

If, after reviewing your budget, you’re financially not ready for an office outside of your home, that’s OK. Create a plan of how to get to the point where you are ready. With a goal and a plan in place, you’re more likely to be financially ready for the big move when you’re business needs that extra space.