(A miscalculation could cost you $10,000’s of dollars)
No matter what type of business you have the size of your office space has a direct impact on the amount of rent you pay. For example, the average rent for office space in Pittsburgh, PA is $21.10 per square foot, that means if you lease just 500 square feet more space then you need, you’ll be overpaying by $879.17 per month or $10,550 per year.
Not only does the size of your office affect the price you pay, it can also have an effect on your employees productivity and satisfaction, and in some industries the amount of customers you can serve on a daily basis. That’s why we’ve made the following list of important factors to consider when determining the correct amount of office space for your business. If you’d like to skip a level, we’ll also provide a link to our office space calculator at the end of this article.
What type of office space fits your business?
Different types of work are suited best for different work spaces. For instance law firms host many small group meetings where the topics of discussion are confidential, therefore they typically require larger private offices and multiple meeting rooms where these types of discussions can take place. On the other end of the spectrum programmer's work is very focused and takes place mostly on a computer, therefore they typically need less space, whether it be in a private office or an open floor plan. The recommended average density is 150 square feet per employee, but that can vary depending on use from 100 square feet per employee to 200 square feet per employee.
How many employees will be in the office?
This seems straight forward, but remember when planning for office space that leases typically last for at least three years, so if you’re on a growth trajectory, you might want to think about leaving some room for growth. Another way around taking more space than needed upfront might be to go with a more flexible lease option, with a shorter term or early termination option. At minimum you should make sure your lease allows you to sublet your space if you do outgrow it.
How many employees need private offices?
This is a personal business decision. Some industries may require more privacy or a work environment with less distractions, while others might prefer to have more open work areas allowing employees to collaborate. Whatever you decide, remember that private offices typically require about 25 square feet more space than an open plan, so you should add 25 square feet for each employee that requires a private office.
Do you need conference space?
This includes smaller stand up or huddle rooms that have become more popular over the past few years as well as standard conference rooms. It’s recommended to have one conference room per 20 employees, again the size of those conference rooms will be dependent on the type of meeting you’ll be hosting there and can range from 125 - 225 square feet.
How many daily visitors do you receive?
The number of daily visitors you receive will determine the size of your reception/waiting area. We recommend taking your daily visitors and dividing them by 8, or the amount of hours you receive visitors each day to get the number of hourly visitors. We hope your visitors won’t be waiting in the reception area for an hour, but this allows a buffer for overlap and busy hours. You’ll then take your hourly number of visitors and multiply them by 25 square feet (the amount of space needed for each seat). Finally, you’ll need space for a receptionist, so you’ll want to add 125 - 225 square feet to your seating space to get your total reception/waiting area square footage.
Do you need kitchen space?
This is another decision based on your individual business and culture, but it can also be influenced by the amenities in your building and neighborhood. For instance, if you have restaurants or convenience markets in your building, then maybe only a small kitchenette is needed. If you have a common area on your floor with beverage options, then maybe you don’t need anything at all. On the other hand if there aren’t any of the above options available and you want to provide your employees with food and/or break area options then you should plan appropriately. Depending on your desired density, you should figure 50-100 square feet for a kitchenette and 100-200 square feet for a full kitchen. For a kitchen with a break area you should figure 200 - 400 square feet plus 25 square feet for each employee that could be using it at one time. So, if you plan on 50% of your employees using the break area at once, then you’d divide your total employees by 2 and multiply by 25.
Do you need any specialty space?
This could mean anything that isn’t listed above, lab space, storage, clean rooms, mail rooms, lactation rooms, etc. Unfortunately, the benchmarks are not as readily available for these types of spaces, so if you aren’t sure how big they should be then you can contact an equipment supplier or manufacture (if the space is for equipment), consult an architect, or speak with your real estate agent.
Will your needs change prior to the end of your term?
This is an important thing to consider, but is somewhat of a double edge sword. You should plan ahead for any growth in your business, but if you sign a 5 year lease and lease space that will allow you to double the size of your business over that term, then you will be paying for more space than you need during the first portion of your lease. However, if you sign the same 5 year lease, but only take the space you need currently and your business doubles, then you could be forced to move into a larger office and need to buy out of your lease or worse pay for the space until the end of the term. To avoid these issues, it is best to work with someone who has experience in negotiating leases with flexible terms that will either allow you to sign a shorter lease term, negotiate a reasonable buyout, or at the minimum ensure that you can sublease the space after you’ve outgrow it.
Venture Office Space Calculator
As promised in the intro, here’s the link to our Venture Office Space Calculator that takes into consideration all the logic we’ve developed over years of office leasing and discussed above to help you dial in on the right amount of office space for your business.
The Key to Ensuring your Office Space Fits all your Needs
As discussed above, it is important to consider all factors when determining the criteria for your office space. Overlooking even the smallest detail could cause major issues and expense over the term of your lease. The single best step you can take to ensure you choose the correct office space for your business is to seek the expertise of an office space leasing specialist. A commercial real estate consultant can provide tools and expertise to help you identify and prioritize your list of criteria and evaluate available office locations that meet those criteria.
As Pittsburgh's most transparent real estate consulting firm, specializing in office space leasing, Venture Real Estate is here to provide the tools and guidance you need to find the ideal office space for your business. We leave no stone unturned as we walk you through these five important steps of the office space leasing process:
Development of Criteria needed for your office space.
Identification of available spaces that meet your criteria
Tour and Rate Spaces
Request for Proposals (RFPs) - make landlord’s bid to have you as a tenant.
Compare, Negotiate, and Select - make the right selection and negotiate the best terms
If you would like to learn more about the tools we provide, and our ideal space guarantee, click here to speak with one of our experienced specialists. We look forward to working with you!