When Should You Get a "Real" Office - If Ever?

We get mail . . .

Ali emailed me with a question that's very important right now:

His business has three employees. "I closed our only physical location during the pandemic and started working from home. Now, I have a small budget and wondering how important is to have a physical location instead of a residential address. Does it affect our trust in customers? Should I lease or not?" 

Short Answer: All small businesses should put off getting an office outside the home for as long as possible.

Longer Answer: Great question. Unless there's a specific reason to have an office outside the home, you probably don't need one. There are several reasons for this.

It’s a huge expense. In fact, the expense is larger than you project. Once you have an office, you'll invest in furniture, a workbench, tools, and probably a rack for computer equipment. You'll buy a refrigerator, office products, a workgroup printer, etc. You think you won't, but you will.

Again, when the time comes, you'll need all that.

I operated for almost ten years with a home office. It was when we started to grow that meeting with technicians at a local coffee shop became impractical. We quickly went from four people to twelve, so an office became a necessity.

You probably don't need the office for prestige. I think we had one client visit us one time in 25 years. In our business, we either work remote or we go to the client’s office. Today, there is no stigma about working from a home office.

In my last MSP business, and in my current incarnation, I have turned my front room into an office. We have three desks plus work tables, shelves, and printers in that office. Employees only show up enough to keep in touch and build the culture. Very little work needs to be done in the office.

A UPS store is a great asset for home offices. I've always had a UPS store mailbox, even when we had a real office. You can get the smallest mailbox and still get access to all their services. This gives you a “business address” and you can send all business stuff there. It has the bonus that you can have all your packages delivered there. Someone always signs for them, and they keep the boxes safe until you pick them up. This is handy and frees you up to work and do sales without being tied to your home/office.

Also, if you think you need a specific city address for prestige (e.g., the big city rather than a suburb), you can get a UPS Store mailbox inside that city. Then just check for packages once or twice a week.

I loved having an office. I started by renting space in another consultant's office. Ironically, they had signed an expensive lease deal and ended up barely using the space at all. We got one large room to put three/four people in, plus use of the kitchen and meeting space. From there, we moved into a much larger office as we added staff. We kept the larger office for almost nine years.

When I sold that business, I continued to work with them in a special role. Mike moved us out of the big office into a much smaller office and had techs show up as needed. It cut the rent by about half. I got the "garage" space as my office. :-)

When he sold that business, I started my second MSP business in my home office and dedicated one bedroom for my office and another for Monica.

You need to be strategic about the office move. Most small businesses invest in an office long before they need one. Once you commit to that rent, increased insurance, internet, etc., you increase expenses quite a bit. So please consider all the variations that might work to keep you "at home" for as long as you can.

You may have personal reasons for getting out of the house. Some people simply cannot work at home. They can't stay focused. They can't stay out of the kitchen. They can't work with kids or spouse around. So, you have to have the right temperament to successfully work from home.

These are just a few things to consider, especially if you think we're going into a recession. No matter how mild, a recession is a great opportunity to conserve cash as much as possible.

Comments and feedback welcome.

:-)