Because ambition doesn t have ceilings

Transcription

1 A GUIDE TO PROPERTY I n the journey from startup to IPO, you want to spend the majority of your time developing your idea and focussing on growing your business. When new funding arrives, it offers a crucial cash injection, enabling you to grow the business almost overnight. You will probably need to employ more people, which is great, but where are you going to put all these muchneeded new employees? Suddenly what worked for you yesterday doesn t work for tomorrow. Our research shows that property is typically the second biggest operating cost after staff. The office you choose has a real impact on your ability to attract and retain the best talent as well as helping to define the identity of your business. Getting the mix of cost, flexibility and location wrong can seriously hamper your business growth. So you need to make the right decision, so where should you start? How do you know you ve seen all the options? What kind of agreement should you sign? How much should you spend? Securing the right property can be a real headache if you don t know the market. Employing the services of a good property adviser not only allows you to refocus your attention on your core business it will save you money. This handy guide gives you an introduction to some of the options available to you on your journey from startup to global domination. Because ambition doesn t have ceilings THE guide to property 1

2 STAGE ONE: CO-WORKING, SERVICED & SHARED SPACE Mindset: Minimise costs, maximise flexibility Length of commitment: Typically 1 to 12 months S o, you ve outgrown the coffee shop but you haven t got the cash to mix with the big boys and take your own office. Where does that leave you? Well, your biggest challenges at this stage are going to be cost and flexibility. Your business is about to go through a rapid growth stage and you don t know where you ll be in six months, let alone three years. The answer is a short term option co-working, a serviced office or shared space. So what s the difference? CO-WORKING / SERVICED OFFICE These are flexible, cost-effective, plug and play rental solutions offering you the ability to move into fully fitted and furnished office space immediately. Speed IT, telecoms & furniture already there Flexible option to terminate the agreement, typically from three months Low rent deposit typically two months All-inclusive monthly licence fee (rent) Inclusive benefits reception, management, informal meeting areas and kitchens Meeting rooms available Ability to expand and contract Co-working offers opportunities to collaborate and share ideas with other like-minded people Office suites or desks can be rented for one to 100 people with contract periods from one month to three years, which operate on a rolling renewal basis. Cost per person may be higher than alternatives Limited ability to have signage Lack of presence and identity Limited control over IT infrastructure You can be moved around the building at short notice to accommodate others We can search all the serviced office and co-working providers and negotiate free of charge. We ll even talk you through which will suit you and your business the best. SHARED SPACE This is where companies have space which they are willing to share with small businesses on flexible arrangements. The flexibility to terminate means if you need to move on, you can. But this benefits your host too they only need to give you a short notice period to leave if they need to take the space back. That said, find the right sharing opportunity, and the collaborative benefits can make this a really attractive option. Often an economic option with little or no startup cost Speed IT, telecoms and furniture already there Flexible often monthly rolling contracts Rarely need to pay a deposit Potential benefits shared reception, management, meeting areas, kitchens, etc Potential for collaboration between host and guest businesses Lack of presence and identity Limited branding opportunity Limited control over IT infrastructure Limited ability to expand or contract Often no private space of your own Uncertainty as to how long you can stay if the host expands, the guest will be the first out of the door! We can work with you to source suitable shared space opportunities directly, or by using our local and global network. THE guide to property 2

3 STAGE TWO: SHORT TERM LEASES / SUBLEASES Mindset: You can make slightly longer term commitments if they deliver cost savings Length of commitment: Typically 9 months to 4 years C ost and flexibility are still key, but you re not living month to month. So if there is a cheap short term lease out there it is worth considering. As you start to think of your business over longer periods, maybe between rounds of funding, you want some more stability somewhere that s yours. If you can find the right deal, these can provide the perfect stop-gap. Often an economic option with low startup cost Speed IT, telecoms & furniture are sometimes already in place Shorter commitments than typically available from landlords (see Stage Three) Short term subleases are often available at below market rent Improved control over IT infrastructure Your own space with identity and branding opportunities Entry cost may be high if the space needs work to suit your business Rent deposit may be necessary Limited ability to expand or contract We use our network and local knowledge to keep our finger on the pulse of upcoming opportunities we will search the market, report all options and show you everything that fits the bill. Then comes the negotiation of the best terms for your business. THE guide to property 3

4 STAGE THREE: LONGER TERM LEASES Mindset: Confident that you re onto a winner, you want your own space and you re ready to put down roots for a longer period Length of commitment: From 3 years U sually, following a major round of investment, you ll find yourself needing an even bigger team. As you approach around 30 employees, the cost of serviced and co-working options takes them out of the picture. You want to create a home for your business that you can brand, giving you a longer-term base to put the business on the map: you need a longer term lease. This will give your business a bespoke environment for three to 10 years. It s a big decision a longer commitment and a major investment that will become a shop window to clients and staff. What do you need to consider? BUSINESS NEEDS Growth projections Working practices Flexibility IMAGE Clients / staff Facilities Brand FINANCIAL Capital expenditure Annual outgoings Tax and accounting EXISTING PROPERTY Exit strategy Stay put strategy Reinstatement liability Timing LOCATIONS Transport Local amenities Access to talent / client base Profile, presence and identity Bespoke fit-out Customised IT Long term security Location of choice Business continuity High spend on entry and exit Rent deposit may be required Limited flexibility minimum three year commitments Expansion opportunities are limited Moving takes time negotiations, legal documentation and fit-out Once you ve decided your search criteria, it s time to start looking at what s available. It s a daunting prospect: you need someone you can trust to find everything on and off market, negotiate the best terms for you, plan the space, and even help you to furnish and fit it out. Most importantly, someone who will look after your property issues whilst you focus on growing the business. THE guide to property 4

5 S GLOBAL EXPANSION o, by now you ve had more investment, attracted even more customers, and you re thinking about world domination, but where first? This can be exciting but also the most daunting stage when it comes to making property decisions, which is why you need someone with global connections. We can help you once again to navigate the next part of your journey. We operate in key markets across the globe and we can help you to compare locations, based on sound economic and demographic analysis. We have a great track record of helping other companies expand across the globe. We have experts in all these locations. So, whatever stage you re at in your journey, we are here to help your property meet the demands of your business. Because ambition doesn t have ceilings For more information on how we can help with your property requirements, contact: James Nicholson +44 (0) james.nicholson@eu.jll.com uk.linkedin.com/in/jnicholsonjll Matt Glenny +44 (0) matthew.glenny@eu.jll.com uk.linkedin.com/in/mattglenny THE guide to property 5