Having to work from home or deal with the skyrocketing rent of office spaces is one big issue for a lot of startups in Africa and around the world. A quick online search as at July 2016 reveals that some office spaces in Lagos, Nigeria are even more expensive than an office space in New York. There’s always that pressure to own an office space and it is sometimes motivated by the pride that comes with showing off one if you are able to get it.
While affordability is relative and your business might be able to pay for an office space in a nice neighbourhood, startups should really not be discussing affordability as much as they are discussing the need or relevance of the office space to their businesses.
This is not to say that startups should not rent office spaces at all. The problem is that many startups will rent office spaces and become stranded. After paying rent, they need more money to do a lot of other things so they just sit in the rented space with nothing to do and no client coming in. before they blink, the year has run out and another rent is due.
According to meqasa.com, a site dedicated to property rental and sales in Ghana, some office spaces were renting for 500 US dollars a month in East Legon, Greater Accra. Another was renting for 11,700 Ghana Cedis a month and that’s approximately 3,000 US dollars per month. The cheap stores were renting between 96 to 150 Ghana Cedis and that’s something in the range of 50 US dollars a month.
Before deciding on renting or working from home, you need to ask yourself if the business can pay its rent without you getting into trouble or considering borrowing to keep up with the rent. You should not be borrowing to pay rent for your business or paying rent from your pocket for a business that cannot generate its rent.
You can certainly look up the local rent for stores or office spaces in your country but there is a bigger issue than just looking for an office space as a startup company. You need to answer the important question about relevance to your business at the time you are considering renting an office space.
Can you do your business without an office space? For most businesses, the answer would be yes, you can start without an office space or start by working from home. If the business you are about to start is one that can start from a study in your house or any other part of the house, it’s best you start there and not create the unnecessary burden of being pressured because of rent.
If you think you desperate need an office space and that the space will help your business, you may consider the following:
1. Share office address – Some companies are coming up with this idea for startups. You don’t have to go to the office but this office knows you and will take correspondences on your behalf.
2. Share office space – There are so many arrangements where people rent an office space that is larger than what they need. When this happens, they sublet some rooms in those offices and that helps them to cover some costs. This is also cheaper for you as a startup company.
3. Pay for a desk space in a hub – The cheaper alternative is to pay for a desk space in a hub. In this arrangement you will have a desk to yourself and most of the facilities that the company provides.
The rent you are about to dash out is also something you can put into your business so that you’re more equipped and ready for clients. Let’s see the alternatives to renting an office space in a few different businesses:
1. Consulting – pour the money into training materials, e-books, a nice looking website and online campaigns.
2. Fashion designs – buy more machines and work from home. That way, you don’t have to pay taxes to local authorities but will have to spend on publicity.
3. Event related rental business – You can buy a used van that’s in good condition to move your equipment around.
From the three different businesses that have been listed, you will see that they are businesses that can do without an office space in the beginning. The rent that would have been paid can go into several other things that the business needs. Decide wisely and don’t choose between your home or a rented office based on the reputation that comes with owning an office. Your business needs all the money it can get.