When looking at acquiring new premises, a new start up company needs to balance flexibility and cost. Consider these options:

SERVICED OFFICES

  • expensive option gets you up and running quickly.
  • all services are provided at day 1 with virtually no lead in time.
  • offices can be fully furnished.
  • you can literally turn up, plug in  your laptop and start working!
  • meeting facilities and refreshments can also be supplied.
  • usually contain an ability to terminate or “break”, sometimes on as little as a week’s notice.
  • an excellent option whilst you are getting your business up and running - frequently used as a short-term measure.

SHORT-TERM LICENCE

  • often considered a half-way house between serviced offices and a lease.  
  • it may take a little longer to get up and running.  
  • you will usually need to arrange your own IT, fit-out and furnishing.  
  • a short term licence can be a very flexible arrangement - typically granted for a number of months.  
  • short term licences will prevent you from sub-letting or sharing the premises.  
  • they usually contain a mutual termination (“break”) right to allow you to vacate.  
  • the rent payable is usually higher than that demanded under a lease.  
  • landlords are often happy to provide a fixed fee structure that includes all costs relating to the occupation.

LEASE

  • a big step for a new business but potentially much better value than the other options.  
  • leases can be much shorter these days - a 5 or 10 year period (“term”).  
  • in the current climate landlords are increasingly keen to let void space.  
  • landlords are therefore willing to agree more favourable terms with you.  
  • leases usually tie in a tenant for a longer duration than serviced offices or a short term let.  
  • but the rent can be less than under the other options.  
  • a lease usually offers more flexibility on signage and fit-out.  
  • this will allow you to adapt the premises to suit your business requirements.  

In the table overleaf, we cover some of the issues that often arise on a licence or a lease.