What Are Average Monthly Office Expenses?
The average monthly lease of a dedicated single room office in the suburbs of Philadelphia is somewhere in the region of $800/month. You will probably be tied to a 3-year term which equates to a $28,800.00 lifetime commitment.
Set up costs
Next, you need some furniture. The typical budget for a one-room office is around $2000.00. You’ll need a desk, a couple of chairs, some shelving space, perhaps a potted plant and the usual office tools. You’d be surprised how quickly the costs can mount up.
Utilities & Cleaning
Wi-Fi and perhaps a phone line will set you back a minimum of $300 per month. Electricity, heating, and your share of the common space costs will easily hit $200.00 per month. On top of that, regular cleaning and sanitizing of the space during the COVID-19 era is more important now than ever, and another $150.00 per month.
So far, we are looking at a monthly expense of $1450.00
What if you hire your first employee? Okay, you can probably squeeze into the same office space. Hopefully, you can still be focused without distractions from one another, and hopefully, there is enough distance where you can both talk on the phone at the same time. What happens when you hire your 2nd and subsequent employees? You need to find another office space, ideally in the same building or perhaps that person can work from home. But now you want or need to meet clients. What are your options? You could ask everyone else to stay at home or go out for a long lunch break, or you could meet the client at Starbucks. Neither option will send the right message to your client. You really need another larger office, perhaps with two offices and a meeting room, but you are tied to a 3-year lease. Either way, if you rent more space you will need another lease or hope that there is another room available in the same building.
Your all-in monthly cost will at least double to $2900.00
You really need to ask yourself; “How often do my employees and I need to be in the office?” If you really think about it, in normal circumstances you need to be out for considerable periods during the day to meet with clients, network, and talk to partners. The reality is that you probably only need to be in the office 50% of the time. Often, we just go to the office because that’s what we do. What if you just went and paid for office space when you needed it?
Co-working Space Is the Answer!
Co-working is less expensive and more flexible
In a flexible, shared office space such as HeadRoom, you pay by the hour. Typically, you will pay around $7 per hour if you sign on for a monthly membership. This will get you whatever office size and type you need for the occasion. If you need a conference room for a team meeting, a presentation, workshop, or somewhere to meet a client, you book a conference room. If you need to work on your own, you book an office. Many co-working locations will allow you to hold receptions or networking events at little or no extra expense. This allows you to use the right space at the right time. If you need more space for one month, you simply use up more of your monthly hours. If you don’t need to be in the office much another month, you can work from home, or be on the road growing your business without the worry about mounting costs. Most Co-working offices charge by the room, not by the number of persons using the room, so if you need to bring your team with you, you can do so at no extra cost.
Let’s say you need, 150 hours of office and conference room space per month. Believe me, you don’t really need that much, but let’s say you do.
Your total cost – that’s everything – will be in the region of $1000.00 per month! For an employee count of up to 10 people.
You have no long-term commitment, and you can decrease or increase your usage with very little notice if any. This gives you the opportunity to grow your business and your headcount without having to worry if you are going to run out of space. It means that you can delay looking for a permanent office until you are really sure of your needs and until you have the confidence to do so.