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