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Poll time: Office location

Above a shop on busy high st vs commercial centre

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Hi all,

I'm asking for AW valuable insights again!

I'm driving myself mad working from home and really need a separate dedicated space for business. After having some major client losses due to COVID things are starting to pick up and referrals are trickling in which is super exciting for me. I had an office when working with another accountant and I was surprised at how this drew in the bigger clients, I even had a few that said having an office was a prerequisite for them when choosing an accountant. Did anyone else find this or experience an uplift in new leads/clients when moving to an office?

One option is an office above a shop on a busy high street, a ground floor unit is out of the question as they cost around £50k per year, plus service charges and business rates. The other option is an office in a 30 unit commercial centre on the outskirts of the same town, the centre is offices only and has many professional services businesses, including an accountant. Office costs are approximately the same for these two options, around £1k per month including service charges and the offices are around 500sqft.

There is a serviced office centre near by too but I'm not really interested in that, the costs are high too!

Thanks all

PS. a poll option would be great 

Replies (30)

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By I'msorryIhaven'taclue
22nd Nov 2020 15:16

Forget the commercial centre. We moved out of ours July and into a self-contained suite in the sticks. The commercial centre had become unusable due to the large number of firms there - some of which were offices of domiciliary care firms - and the restrictions of Covid.

The agent running the commercial centre introduced all manner of restrictions (no passing one other in the corridors, knocking on communal toilet doors before entering one at a time, sanitise your hands every time you touch a door-handle) and policed the building's occupants via CCTV. Visits in and out were logged (and, on occasion, their necessity called into question). I noticed recently that our former offices there are currently being advertised at two thirds of what we used to pay, but still no takers.

Our much larger new offices with our own W.C and kitchen cost less than we used to pay in the commercial centre; cheap as chips because I guess ordinarily nobody much wants one all the way out in the sticks. For me, it's Covid-safe and splendid isolation.

Thanks (2)
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By Paul Crowley
22nd Nov 2020 16:28

This may seem trivial
But parking for free matters

I can have 8 client cars in my listed building carpark

We considered a commercial centre. Staff parking would leave zero space

Thanks (4)
Slim
By Slim
22nd Nov 2020 16:43

The offices in the commercial centre are self contained with their own entrance, their own loo and small kitchen.

imsorryihaventaclue, I totally agree and that’s a good point and part of the reason I don’t want to go into a serviced office.

The commercial centre does have visitor parking but no idea if these get taken by the other businesses there. With covid it’s dead there at the moment so hard to check.

There is lots of public parking near by both options, but both being where they are you are not going to get an office with massive parking provisions as land prices are simply too high.

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Replying to Slim:
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By I'msorryIhaven'taclue
22nd Nov 2020 17:23

Slim wrote:

The offices in the commercial centre are self contained with their own entrance, their own loo and small kitchen.


Ahha, that ticks all the boxes then. I had quite enough of communal entrances/loos/kitchens; not to mention being shepherded around by the agent's lackey. Tesco had similar ideas at the time, with lots of string and one-way systems. Self-contained will suit you nicely.

We were paying £23 +VAT per square metre with utilities & service charges included, rates phone and broadband excluded (although I see the agent now has ours as well as others' units on the market at two-thirds of that at the moment - seems he can't give them away!). Sounds as though you've got around 46 metres, so the rate sounds about right.

If you sign up, watch out for the sting in the tail on exit as a number of these companies include a clause in the rental agreement to the effect that you will pay for redecoration and re-carpeting upon exit. It's a racket! Our clause allowed the landlord's agent to use their preferred contractor, who surprise-surprise is charging £30 square metre to supply and fit cord carpet that retails @£2.99 sq metre in the shop up the road. Grrr! We'd actually decorated ingoing, and took the word of the local agent (who is elderly and dropped out of the picture) that he wouldn't expect us to redecorate / re-carpet outgoing as well, but only got the decorating bit in writing.

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Replying to I'msorryIhaven'taclue:
Red Leader
By Red Leader
23rd Nov 2020 11:13

"Dilapidations" is an absolute racket. Would be interesting to hear DJKL's take on it.

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Replying to Red Leader:
Hallerud at Easter
By DJKL
23rd Nov 2020 12:23

Not so- if you sign up for an FRI for unit A the rent will be say £10sq ft, if IRI say £12sq ft, if serviced with no obligations say £16 sq ft, the obligation comes with the rent pricing initially offered and accepted . (And we do all three with different units we own.)

We have no problem letting our tenants do such repairs themselves, in fact during Covid a Gym that had moved to new premises which had an IRI obligation re our unit were allowed to carry on past their lease end to do the works without us charging any rent for that occupation, but where tenants put their head in the sand, decide they are giving up the unit but make no attempt to do the works what do you expect the landlord to do, grin and bear it?

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Replying to DJKL:
Red Leader
By Red Leader
23rd Nov 2020 12:36

I suspect part of the problem is the tenant not taking proper advice before signing the lease. Some small businesses seem to get into property leases with no idea what they have really committed to.

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Replying to Red Leader:
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By I'msorryIhaven'taclue
23rd Nov 2020 12:59

For me, the problem was enrichment in so far as the landlord company interpreted their new for old clause as entitling them (a) to upgrade from cheap cord carpet to luxury carpet tiles (which cost say three times the price). I fought tooth and mail over that for a month before they climbed down over that upgrade.

Separately (b), the contract stipulated that only the landlord's preferred contractors could carry out the work. So we were unable to go to the carpet shop half a mile up the road and buy directly @£2.99 sq metre (but instead are charged with paying over £30 sq metre to the preferred contractors for the same cloth from the same carpet shop). I'm still fighting that one.

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Replying to I'msorryIhaven'taclue:
Hallerud at Easter
By DJKL
23rd Nov 2020 14:41

The preferred contractor part is very unusual.

The key, if you are prepared to pay a front end cost, is a front end survey which is appended to the lease as the condition in which one is required to return the unit. Cheaper is a vast photographic incoming schedule (though can make scanning leases and sending them slightly challenging) but not as useful if arguments do erupt

You lot either land with all the rogue landlords or we are too soft- then again playing fair with tenants means they will come back to you for their next business/project etc, repeat business helps keep the portfolio pretty full. ( our occupation rate was 100% but is now, with the upcoming void I mentioned, 99%)

Thanks (1)
Replying to DJKL:
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By I'msorryIhaven'taclue
23rd Nov 2020 16:11

These were just serviced offices, not full repairing. Annual lease, and the clause relating to redecoration and re-carpeting upon exit "should the landlord deem it necessary" was beefed up in the second year's agreement to the effect that the work could only be carried out by the landlord's "approved contractor". Ouch!

All of which conflicts with the arrangement we made ingoing with the nice cop agent that we'd carry out our own decoration ingoing and tolerate the worn carpet but wouldn't be expected to redecorate and recarpet outgoing. Decoration arrangement confirmed by email; carpet not so. I wouldn't mind wearing the cost of carpets if reasonable, but 10 times the retail price I find excessive.

I'm sure it wouldn't happen in one of your properties, DJKL :)

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By bernard michael
23rd Nov 2020 09:13

Of the 3 choices take the unit above a shop. Clients don't normally care so long as the access is reasonably easy. Also being in the town means you might get walk ins

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By SouthCoastAcc
23rd Nov 2020 09:39

I'd be interested to know how much of a difference it makes to the type and number of clients you attract.

Thanks (1)
Hallerud at Easter
By DJKL
23rd Nov 2020 10:13

Given no required location given I will chance my arm

899 sq ft 1st floor office in Commercial Street, Leith , Edinburgh

(Voted best place to live https://theedinburghreporter.co.uk/2020/03/leith-is-voted-best-place-to-... )

Becoming available soon- close to what will be the extended Tram Route, bar, cafes, restaurants nearby (inc a couple with Michelin Stars) Rent circa £10,000 pa IRI, RV should enable it to qualify for small business rates exemption. Tenant responsible for all utilities. No parking with unit but on street parking available.

Thanks (1)
Replying to DJKL:
Slim
By Slim
23rd Nov 2020 12:00

Really like Edinburgh shame I'm in London.

Thanks (0)
Replying to Slim:
Hallerud at Easter
By DJKL
23rd Nov 2020 12:23

A branch office awaits you.

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Red Leader
By Red Leader
23rd Nov 2020 11:14

TaxAssist require their franchisees to have a high street shop front presence. Make of that what you will.

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Replying to Red Leader:
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By I'msorryIhaven'taclue
23rd Nov 2020 11:59

I've twice had High Street offices - above shops, but with a door onto the main street of busy middle-class towns - and the drop-ins in both cases were non-lucrative SA tax returns and the odd builders' subbie and small-time self-employed client.

We've fared better in commercial environments - twice on industrial estates - where I've found you're more likely to collect the builder himself as a client. Or "larger" independent companies, come to that, who like their accountant to be nearby.

Thanks (2)
Replying to Red Leader:
Hallerud at Easter
By DJKL
23rd Nov 2020 12:30

Define High Street- I just drove past the Goldenacre, Edinburgh one earlier today, yes it is a main street with some buses, yes it has a few shops/units nearby (maybe 20-30 units total but both banks are no more) but is is hardly a High Street (Pleasant enough area that it is, my father's family used to live around the corner on Ferry Road )

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Replying to DJKL:
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By I'msorryIhaven'taclue
23rd Nov 2020 14:58

Well both were busy high streets in affluent market towns, with full range of banks, post office, Co-ops, pubs, shops, library, cafes & restaurants, solicitors and other professions, station and town-hall on or near the main thoroughfayre that we were on. Plenty of footfall.

But the drop-ins weren't money-spinners. At best one-man-band self-employed accounts; and at worst people walking in with random queries such as why their tax code wasn't to their liking, or greedy consultants checking up whether their accountant further along the street was right to disallow their garden shed. Not unlike the drop-ins on this forum, come to think of it.

Different animals altogether, in my experience, to those on an industrial estate or office complex, who actually ran businesses with employees and had VAT and cashflow issues, and all the other myriad of issues you'd expect with a scaled-up business (as opposed to just being self-employed).

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Replying to I'msorryIhaven'taclue:
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By Jimess
24th Nov 2020 11:19

We used to have an office which fronted on to the market place in a small town. Lovely office, but market days were a nightmare as the world and his wife used to drop in with PAYE code queries, pick your brain queries etc. One lady used to pop in regularly asking to use the loo and one day someone came in asking if they could "jump on to our wifi" for a few minutes while they looked something up outside! We moved just up the street to self contained offices above retail premises and it is much better and the offices were purpose built and well thought out so the space is much more usable. It has not affected our new client uptake at all and clients love the fact that there is a car park directly behind the offices. I would say that having an office does help with client perceptions, but I don't really think that it matters much about being on the High Street any more -most of our recent new clients have found us through the internet or by recommendation from existing clients.

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Slim
By Slim
23rd Nov 2020 21:03

I'm not modelling myself on TaxAssist, the cost of a TaxAssist frontage on a high street near me would be astronomical. I'm guessing it works for them and gets the visibility they want.

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Replying to Slim:
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By I'msorryIhaven'taclue
23rd Nov 2020 20:52

I envisage them being ten a penny next year.

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boxfile
By spilly
23rd Nov 2020 13:57

Will any of your clients have a problem with accessing the premises if they are above a shop? We have one who can’t manage stairs so we always go out to see them instead now.

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Replying to spilly:
Slim
By Slim
23rd Nov 2020 18:47

It's a great point and one I had considered as I do have some older clients who wouldn't be able to climb a set of stairs. Talking to a couple of agents and they have said some companies have left offices as the offices weren't accessible for people with mobility problems.

All that said I could still visit these clients at their home and on a turnover basis the number of clients this would affect is tiny.

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By bernard michael
24th Nov 2020 09:02

As an alternative have you looked at small vacant shops. A lot of landlords are happy to turn retail into offices and councils are very soft on planning permission . at least round here - West Sussex

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Replying to bernard michael:
Hallerud at Easter
By DJKL
24th Nov 2020 09:16

Whilst we do not have that many small retail units so it has not really hit us, local anecdotal tales from agents have a fair few such units becoming void during Covid but being followed by fairly strong demand with interested parties snapping them up again (small units only, bigger units are a very different story)- one theory is with higher numbers losing their jobs there is a swell in the number of people setting up on their own, if true then for accountants they lose some of their old clients and acquire some new clients.

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Replying to DJKL:
Red Leader
By Red Leader
24th Nov 2020 10:19

I always feel sorry for a small business starting a retail unit. It seems a hard slog with unrelenting hours which can end up with not much in the way of profit. Rents in my area of London are eye-watering with high sales required to get above break even.

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Replying to Red Leader:
Hallerud at Easter
By DJKL
24th Nov 2020 10:32

It can work for some types of supplies but agreed a lot of effort. My first job outside practice, age 30, was as FC/FD for a chain of ten mainly Benetton shops, the key was high margins with decent demand unlike say corner grocery shops/CTNs which tend to be strong demand but tight margins (and long hours).

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By NewACA
24th Nov 2020 16:00

I've always thought of rent as a marketing cost. I could have started in my bedroom at home, in a small village - good job I didn't! I knocked on doors to find somewhere in a town centre, which very quickly (about 10 mins of knocking doors) yielded the place I am still in 8 years later.

When I moved in (2012, when I "took the plunge"), I paid £500/month rent for a small room for 2 people (town centre, London Fringe location), with plenty of HNW individuals and business owners around. I took on my first employee after 12 months, so the small room was then fully occupied.

It took 2 years for me to be able to live off the income I was generating, having grown pretty much from nothing, to £100k turnover in that time. I did buy a small block of fees off a bedroom accountant, which took him 10 years to get to £27k turnover - it was more of a lifestyle retirement hobby for him I think, which goes with the having an office at home in my opinion: if you have an office home, you won't be taken seriously by larger clients, you will appear as a hobbyist, not someone serious in business.

Included in the rent was a weekly cleaner, shared toilets, kitchen and board room all within the cost of the rent.

Basically, it was a Regus without a receptionist run by the occupiers, each occupier has their own buzzer at the front outside the building, and the whole block is above an estate agent.

Unfortunately, no parking, but everyone is used to this ancient town-centre having no parking, except owned by the council. We don't have many clients dropping off records, but those that do are happy to chance a ticket, which hasn't happened in all the time we've been here. Those coming in for meetings use one of the many local car parks, and often use the occasion to get other town centre stuff done. We have had a few clients get a ticket, after parking outside the front for a meeting, but they half-expected that!

I later moved into bigger and bigger rooms in the same place, now with 6 desks and a lovely garden just for my team and I at the back, £1.5k/month.

It was a contract for the first 6 months, then monthly after that (there are no exit fees what-so-ever or dilpidations etc), never had any problems. The service company that runs the building is owned and controlled by the occupants, so we don't screw ourselves over!!! I just do the annual accounts and tax of the service company as my part of the deal. This place doesn't advertise, so I would never have found them had I not started knocking on doors.

I don't have a shop-frontage like TaxAssist, but I have a much nicer client base than they do. Your client type has more to do with your website and qualifications once you are not practising from home. Sizeable business owners aren't fooled into using a town accountant with no qualifications. Me, I am a chartered tax adviser and an FCA now, I regularly pick up multi-million turnover clients, which provide most of my income now. We have very few clients with a profit under £100k, as we would be too expensive for many of them, we focus on the tax value-added that the richer are more than happy to pay for.

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Glenn Martin
By Glenn Martin
24th Nov 2020 16:30

I work from a serviced office, but its not a business centre as such. Its the head office of another company who rent out 4 spare offices and let you use there boardroom etc. Its near my house, has free parking and works great for me. The only down side is that I cannot have any external signage up. Worked really picked up once I had moved from home into a proper office. If I was not here I would have started at a business centre until we had got to the stage where the costs rack up and you need you own space. I would imagine you pick up work if you are the only accountant in the centre also. I have a few clients who have snapped up there own offices this year as the pricing has dropped a lot and they have saved money by owning instead of renting. I do think I would buy a property if I ever had to move from current spot.

I would not want to be above someone else/ other shop. I am not so keen on being on a high street as parking is likely an issue, an I suspect you get loads of plonkers who just walk in wanting free advice. I also suspect there will be you choice of these properties soon. Although the signage would bring you leads I guess, but I suspect a good website is more efficient at that these days.

I worked from home through lockdown and was pleased to return to the office when I could. I have improved my work space at home a lot but still prefer going to work.

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