Do Startup Companies need Office Space?

Vishnavy Srinathan

Founding a startup is a series of involved and often complex decisions. These range from where to put the company’s focus for the first 5 years in order to maximise output and profit.

To how to generate funding (other than maxing out company credit cards).

It's a minefield of legalities and consequence-laden actions that could see your business sink or swim.

One of the biggest headaches - and biggest costs - to any business is office space. Between rent, bills and taxes, providing office space is usually the biggest operational cost behind salaries.

Considering the array of technology available, you would be forgiven for thinking that most startups in the last 10 years would be largely remote.

But this isn’t the case. Companies place a far greater emphasis on large office space as an indication of success, presence and reliability than revenue and customer satisfaction.

Bigger, ergo better.

However, research conducted by a team at Stanford University concluded that remote workers were significantly more productive than those who were office based.

They were also less likely to start late, finish early or get distracted from tasks. Attrition also dropped by 50%.

Considering 60% of our productivity is generated while we’re ‘heads down’ and only 30% in collaboration with others, it’s easy to make a case for remote working.

So, does your startup company need office space? Things to consider:

Commutes are the worst

Commuting is the worst 

Roads are getting busier and journeys are taking longer. Aside from the environmental argument, the average person in the US and Canada spends a minimum of an hour commuting to and from work. 

In the UK the average is double. 

Regardless of your personal lives, that’s time you’d no doubt, rather spend doing something a little more productive. Or at least more interesting than staring at the rear end of the car in front. 

For most of us, by the time we sit down at our desks we’re tired, stressed and irritated. And often late.  

We are similarly addled by the time we get home too. The drain of the commute impacts on our work performance, our job satisfaction and our home lives. 

So why not simply get rid of it?  

Instead of a commute we can sit in our home office refreshed and ready for the day. Instead of street fighting our way through rush hour traffic we just power down the computer, close the office door and enjoy your evening. 

Sure, commutes allow us to perfect the words to our favourite song or catch up with our Audible book of the month. But there aren’t many of us who will look back on our lives and wish we spent more time stuck in traffic. 

Remote working takes that headache away, not just for you but your entire organisation. 

Aside from the cost benefits, you will have a team who feels trusted and happier as a result. 

Happy colleagues are productive colleagues.  

Accountability

Accountability 

One of the biggest hangups businesses owners and company directors have about allowing staff to work remotely is productivity. 

What’s to stop everyone from opening a beer and trying to get away with the bear minimum? 

The obvious things.  

Firstly, whether working remotely or in the office, getting drunk on the job is both noticeable and a fireable offence. Secondly, poor productivity may go unnoticed for a couple of days but when the work starts to pile up, questions will get asked. 

Providing you’ve hired good people who believe in your vision and values then you can trust them to work hard. No matter where they’re sitting at the time. 

Of course you can install monitoring software on everyone’s computer but that won’t make your people feel valued. It’ll make them feel like crooks. 

There are a host of ways you can ensure your remote teams stay productive and accountable: 

Give the team focus 

Make sure your teams know what they’re working towards. Set them clearly defined objectives with achievable goals. 

Structure the Team 

Structuring the team with a team leader or project manager at its head will give everyone a clear idea of what their responsibilities are. 

Give them the tools to succeed 

Aside from decent hardware, give them the tools they need to not only work effectively, but communicate effectively too. 

Platforms like Microsoft Teams and Slack allow your remote workers to chat, video call, share work and create assigned tasks within to do lists. 

Trello offers a similar tool. 

Effective diary management also allows anyone in the organisation to see what’s being worked on. It also has the added benefit of allowing push back when a seemingly important tasks crops up. 

It’s a transparent way of working that will make it very clear who’s pulling their weight and who isn’t. 

Schedule regular meetings and appraisals 

A weekly call between the team leader and each member of the team will highlight any issues before they develop into problems. 

Clear lines of communication are essential in any work dynamic so making these a regularly scheduled thing is essential. 

Should we eliminate offices

Should we eliminate offices entirely? 

Not necessarily. 

While office space big enough to accommodate the entire workforce is arguably excessive, having some office space has its advantages.  

A physical office gives teams the opportunity to meet face to face once a month or one a quarter and bond.  

It also allows for training days, all hands meetings, parties (space permitting) and the ability to host clients. 

However, if you want to keep costs to a minimum there are two low cost options available. Co-working spaces and meeting rooms on demand. 

The former approach is nothing new. A shared space with other businesses, where your teams can use desks and meeting rooms. 

It’s a low cost option for the budget conscious. And quite often you end up with nicer offices than any you could afford when you’re just starting out. 

Of course the downside is sharing your workspace with other businesses. This can be problematic if they hog the meeting rooms. Or one of them turns out to be a competitor. 

But generally it’s an agreeable solution that helps startups from all industries get off the ground. 

Meeting rooms on demand is an even simpler premise. You hire meeting rooms as you need them. No office space required, no lease needed. You simply call in with the date, time, number of people and any requirements - such as refreshments - and you’re good to go. 

Old office building

Is this the end of the office? 

No. 

There will always be a need for businesses to have a physical presence, even if that’s a rented meeting room.  

Humans require physical interaction, it builds trust and strengthens bonds of friendship. No amount of technology can replace that. In a business setting they also add a lot of value. 

So there will always be a benefit to having some form of office. Whether it’s to provide remote teams with a space to meet, or a room to plan projects with clients. 

Equally there’s nothing stopping you from hiring a conference room or a hall in a hotel for you all hands meetings. It doesn’t really matter. 

It’s far more important that you have an organisation full of outstanding people who deliver the results you need to make the venture a success. 

The beauty of the technology at our disposal is that you can have the best of both worlds. 

Especially if - as a startup - you’re having to watch the purse strings.  

The ubiquity of remote working technology and the flexibility offered by co-working spaces (and similar) means you can focus on scaling the business. Rather than whether or not you can afford to keep the lights on. 

Vish Sri

About the Author

Vish is a hybrid Human Capital Strategist with proven success in business partnering, consulting, advisory and project management. She combines her experience across multiple sectors including BIG4 consultancy, public sector, financial services and Tech SMEs.

She has extensive experience strategising, implementing and driving people initiatives, and leading global programs partnering with HR and Digital leaders through a significant transformational period, to position organisations at the forefront of digital development.