About Executive Space
What To Consider
When considering your office needs, the first question you might consider is what your total investment is likely to be, and then what the utilization benefit is likely to become. Put another way – after investing in an office lease, interior build out, furniture, equipment and machines, workstations, telephone system, communication services and other infrastructure – how much return on investment will each square foot of that space provide to your organization?
This is particularly important for small businesses, associations, nonprofits and professional firms to consider because even the smallest organizations generally need a conference room, kitchen, lobby, bathrooms, fax machine, copier, workstations, and phone service.
However, the reality is that the costs of ‘must-have’ infrastructure – everything beyond the cost per square foot of the actual offices and workstations for your employees – is often greater than the cost of the actual space. Your conference room, which might seat 12 and only be used on average once every two weeks for an important meeting, is costing you just as much per square foot as your office.
The overhead burden of the office investment, therefore, is unreasonably high for many smaller organizations – and traps them in fixed three, five and ten-year lease terms when they may actually need to move to larger or differently-configured space in the first year. High up-front investment, enormous overhead costs and the lock-down lack of flexibility mean that many smaller organizations become unduly burdened by their office space.
Executive space, also known as business centers, executive suites, serviced offices or furnished offices, provides an ideal solution to meet your needs. With executive space, a professional company – often possessing years of experience in commercial office space management – establishes a professional, furnished office environment and then provides it for use by multiple tenant organizations. In the Clinton Township, Michigan area many organizations rely on executive space service providers to meet their needs.
Executive Space or Direct Lease?
How much do you know about configuring new phone service? Are you ready to measure out space and select furniture? Should you purchase or lease a PBX system for your telecom needs – and should it be analog or digital? These are just a few of the hundreds of questions you’ll need to answer as you go through the process of selecting and configuring traditional office space through a direct lease. Selecting traditional office space for direct lease is just one-third of the process: negotiating the lease itself in a manner that is legally advantageous to your needs is step two…and then configuring and setting up the office is step three.
Just on the basis of time and risk alone, many small organizations quickly realize that planning for new office space through a traditional direct lease is complicated, time-consuming and in many respects very risky. In addition, the economics don’t favor the tenant in most situations with a direct lease. The landlord’s objective is to sell large pieces of space for long periods of time, whereas chances are you need a small piece of space for a short period of time, or at least for a period of time that comes with options for expansion. As a result, small tenants often pay a disproportionately high rate in order to achieve shorter terms, or have to accept longer lease terms to cover the costs of space fit-out incurred by the landlord.
With executive space, you gain in five ways when compared to a traditional lease. First, the build-out and furnishing of the space is completed for you. Second, you can secure a short term and multiple options for possible growth up-front. Third, the service agreement is much simpler than a traditional lease with lower risk to you. Fourth, the cost of common areas in the building and within the space are covered by multiple parties, not just your business. And fifth, you have professional management of your space available at all times. For some organizations there really is no better option than executive space.
Here are a few questions we recommend you considering before you enter into a Direct Lease:
Have you ever negotiated a lease for office space?
Are you working with a commercial real estate broker?
Has your broker quoted the square footage rate as a triple net or gross square footage lease?
What happens if you require more space during the term of your lease?
Do you understand that you could be assessed annual maintenance costs and real estate taxes in addition to the square footage costs?
What are your options if you need to downsize during the lease?
Do you have an alternative plan should the lease negotiations and build out take longer than anticipated?
What build out allowance have you been given?
How much of a security deposit are you required to post?
Have you begun your technology (phones/internet/server/pbx) requirement search?
Have you decided whether to purchase or lease your technology equipment?
What arrangements have been made regarding local/long distance telephone service?
What computer system will you be using in your new office?
What type of IT infrastructure are you considering? T-1, DSL?
What are the costs associated with the installation and maintenance of IT infrastructure?
Will you purchase or lease your computer system?
Who will be installing your computer system and what time frame are they able to provide you?
Have you chosen an Internet provider?
What costs are associated with the installation and maintenance contract for your Internet service?
What costs are associated with IT network administration per year?
What arrangements have you made for office management and administrative support?
Have you decided to buy or lease office furniture?
As you can see, there are numerous costs and tasks associated with securing office space with a Direct Lease. If you’re not a Fortune 500 company with an abundance of resources, the process can be overbearing. With Executive Space, you will save time and money, allowing you to focus on your core business instead of setting up your office.
Direct Lease vs. Executive Space
Requirement Direct Lease Executive Space
Professional address Challenging to find best location Standard
Flexible terms Difficult to obtain and negotiate Standard
Tenant fit-out Must negotiate, extend term Standard
Procure furnishings Costly and time-consuming Standard
Arrange security Technically challenging Standard
Cleaning services Costly for small space Standard
Telecom/Internet Must set up and configure Standard
Conference space Extremely costly Standard
Expansion options Renegotiate or move Available
Support services Separate labor and hiring cost Available
Time to move-in At least 30 days, often 90-120 Instant
Virtual Vs Executive
There are many options available when you consider how to configure a virtual office arrangement. Virtual officing can range from setting up a private mail box at a pack-and-ship store down the street, to paying a third-party firm to answer calls professionally, forward your mail from a business address to your home, and more. Many executive space providers also offer virtual office options, so your first advice when considering a virtual office solution is to only consider providers who also manage executive space. This means that you will be able to transition from a home office or virtual situation into a full-time office in the future without any disruption to your business identity or communications.
The wonderful thing about executive space, however, is that you can probably secure a full-time office for a lot less than you think. Executive space offers competitive options that make the move from a virtual office to a full-time office only an incremental increase in investment, rather than a major change. Some providers also offer hybrid options incorporating time in a day office on an as-needed basis, a pre-paid block of conference room or meeting room hours, plus other virtual office services. Imagine working from home but meeting clients in the professional meeting room at your office building, and being able to prep for the meeting down the hall in your office.
$99 Turnkey Office at 41800 Hayes can help you figure out the best solution for your business – for today, and tomorrow. Before investing in a virtual office service, allow us to help you select your virtual, hybrid or full-time office solution.