The time has arrived when, perhaps having worked from home for a while, you need a proper office in London to develop your business further. But how do you go about finding your first London office?
I am Alice Malcolm Green – running client relations and social media at Find a London Office. Recently as an ambassador for Small Business Saturday, I had the pleasure of meeting with many other small businesses at Somerset House in London. We were there with Simon Devonshire OBE, to voice our thoughts and concerns about how the government can assist and nurture small business.
During a very wide-ranging discussion, one of the main points raised was how to go about finding and acquring office space. Many expressed the view that this was a minefield – they simply didn’t know where and how to start.
With this in mind, I decided to interview my Find a London Office colleague – Michael Fraser – an expert on the London office market and publish a transcript here:
Alice: Is finding your first London office difficult?
Michael: No. For a first London office, your best option is probably a serviced office which will provide most of what you need at an all-inclusive cost. No other bills to pay except for additional services specific to your business. A short time frame for getting in. No long term commitment to worry about while you see how your business develops. FYI, office space leased on a conventional basis is for a committed term of 2 or more years. On the other hand, serviced space can be had for say 6 months to a year (which many businesses decide to take) but can be taken for as little as 1-3 months. Monthly costs would decrease however if is taken for 6-12 months or more
For a first London office, your best option is probably a serviced office which will provide most of what you need at an all-inclusive cost
If you are searching for an office for the very first time, it can seem a very daunting and long-winded task – even if you have opted for a far more straightfoward serviced office. There are so many providers out there. It is highly advisable to work with a single reputable agency. They will be able to take the burden of searching away from you, while you get on with running your business. Crucially there is no charge to you for this service. At Find a London Office, we have details of ALL the options available. So you just have one call to make and one contact to deal with instead of many. We can offer plenty of experience and expert advice to ensure you find the very best space easily at the right cost to meet your needs.
Alice: How should you budget when planning to move into office space?
Michael: Have a loook at our office space calculator. All you need to do is answer the 3 questions (including ticking the short term, flexible serviced box) at the top and it will give you an annual budget. Think you might try a different location from the one you initially chose? Just change the location and the budget figure at the top will change. Couldn’t be easier. If thinking of an out-lying and non-central location? Make contact and we can give you the costs for any of these locations
Alice: Where are the most economical places in London to find office space for a start up?
Michael: Determining the most suitable location for your business can depend on many factors. Where are most of your clients based? Do you need to be near them? Where will you and your co-workers commute to and from? Is there a specific location more suited to your field of business e.g. Tech and Fintech companies tend to opt for Shoreditch/Old Street and Farringdon. Finance companies tend to look towards the Square Mile in the City of London or Mayfair and St James’s.
For anyone searching for their first London office, keeping costs down will be a high priority. However “economical” and “London” are two words you seldom see in the same sentence! However, more often than not, budget will dictate the most suitable location. Some of the more peripheral London locations will often be the most economical. Areas such as Waterloo and London Bridge, Aldgate, Tower Hill and Hackney are often more affordable to the East, while Hammersmith and Fulham are more economical options if you are considering being West. If you are searching North of Central London, consider locations such as Angel, Islington and Camden, and to the South it is worth considering locations such as Brixton, Clapham and Putney. Perhaps the most economical areas actually in Central London are locations such as Victoria and Vauxhall.
Alice: How can you accommodate a growing team?
Michael: Some startups grow rapidly. So even if you’re looking for your first London office, growth is often an important consideration. Fortunately, for expanding businesses, serviced offices will always offer the most flexible office space solution. A serviced office is defined by its flexibility and the ability for business to expand at will. To that end, all serviced office contracts offer the ability for the occupier to upscale their office space as and when they need to – within the terms of their contract. Typically, a serviced office contract will run for up to 12 months, or longer by arrangement. Businesses can upscale at any time during their term. As all offices are delivered fully furnished, moving to a larger office couldn’t be simpler, with minimal disruption to the business.
Some startups grow rapidly. So even if you’re looking for your first London office, growth is often an important consideration.
Alice: What document do you have to sign and do you need a solicitor?
Michael: A serviced office contract is in the form of a license agreement, often compared to a tenancy agreement used in a residential letting. It is a 2-3 page document with simple Terms and Conditions. Typically there is no need to employ a solicitor, although we would of course always suggest that you review the Terms and Conditions thoroughly before signing the agreement. Ensure that you fully understand what you are agreeing to.
Alice: What hidden costs should you know about when taking your first London office?
Michael: Historically, it’s been assumed that serviced offices come with many hidden costs. This, however, is no longer the case. With the growing popularity of serviced offices and with the largest pool of serviced offices for businesses to choose from (approx. 3,000 across the UK), serviced office providers are working tirelessly to dispel the myth of hidden costs. More serviced offices than ever are now including IT & Telephony within their office costs (historically an element believed to be a hidden cost). Within this maturing serviced office market, businesses will normally receive totally transparent, all-inclusive pricing. The only additional costs will be any ad hoc usage of services such as meeting rooms, secretarial, postal services or printing. Of course, this makes it particularly attractive to businesses looking for their first London office.
Historically, it’s been assumed that serviced offices come with many hidden costs. This is no longer the case. Within the maturing serviced office market, businesses will normally receive totally transparent, all-inclusive pricing.
Alice: Cashflow. Do you pay a deposit and then pay monthly?
Michael: Typically, on signing the contract to secure an office, occupiers would need to make an initial payment of 2 months’ deposit (without VAT) as well as the first month’s rent (plus VAT) up front. Following that, occupiers then pay a monthly direct debit for the rent, the next payment being at the beginning of month 2.
Alice: Possibly an odd question, but asked by many: Do serviced offices mean a high service charge?”
Michael: To be clear, no. Service Charge is included within the monthly rent of a serviced office, as well as every other cost associated with running an office (Rent, Business Rates, Utilities etc.). The only extra costs are for ad hoc services: meeting rooms, secretarial, postal services or printing etc. A telephone answering service is sometimes available at a small additional cost.
Alice: Do you need to pay business rates / council tax with office space?
Michael: No, business rates are included within the monthly office cost. This is especially beneficial: serviced office occupiers have not felt the pinch from the recent increase in business rates.
Alice: Do serviced offices come furnished?
Michael: Yes absolutely. All serviced offices are delivered fully furnished, typically with desks, chairs, pedestals and storage. Telephone handsets are also provided, as well as IT network connections. But it is also possible to take a serviced office and request that you furnish it yourselves. In these cases, the provider would remove all of their furniture and allow you to bring in their own. NB this would not reduce your monthly rental costs.
Alice: Can you put your mark on a serviced office?
Michael: Yes you can. Always check with your serviced office provider before making any amendments to the space. However in most serviced office spaces, the occupier can, within reason, do anything they like to personalise their office space. Paint walls according to company colours, put up signage, hang pictures, bring in your own furniture and so on. Your office is exclusively for your business and you can make it your own. Some serviced offices also allow signage on the outside of your office door or in the main reception area. Make sure first because not all providers allow this.
The most important thing to remember is that there are generally no dilapidations within a serviced office. There may be a reasonable one-off restoration charge. Typically these are a fraction of what dilapidations would cost upon exit of a conventionally leased office space.
Alice: How quickly can you get into a serviced office?
Michael: Theoretically, if an office is currently vacant, a new occupier could sign-up for an office and move in the following day, provided initial payment has cleared. Typically, however, it usually takes approx. 1-3 weeks from searching, negotiating and signing for an office space. Also worth noting: an occupier can secure a serviced office space up to 3-4 months in advance of the required start date.
Theoretically, a new occupier could sign-up for an office and move in the following day, provided initial payment has cleared. in practice, it takes 1-3 weeks from searching, negotiating and signing for an office space.
Alice: Are there any common pitfalls – that we haven’t covered here – that you should avoid?
Michael: Yes there are! I wrote a blog post about this very subject a couple of years ago: Top 6 costly mistakes to avoid when looking for London offices.
We hope that this has answered most of your questions about finding your first London office. Whether you have any other questions or need to start thinking about acquiring that office, feel free to get in touch. We’ll do our level best to make the whole subject easy for you.
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