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Thinking of leasing my first office

Potential winner for the most ridiculous thread of 2020 award

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I’m only a couple of years into my practice and fee income had been slow to grow however it did start to take off but it’s going to drop significantly as client responsible for my largest fee, which was around twice my second largest fee has gone bust and I've had some very good contractor clients lost to IR35. Let’s not forget we're in the midst of what could easily be the biggest downturn in living memory.

So why am I considering signing up to a 2+ year lease for £12.5k a year? It also needs decorating, partitioning, new lighting etc.

I know I'm crazy but I hate working from home as I’m not as effective and I don't like having clients visit me, I really prefer to keep my work and home life separate and this is stressing me out.

The office is a 15min walk from my house and it does have great potential, although it is small with only 400sqft of office space (exc kitchen/wc). It should be large enough for a private office for me, a meeting room and if needed in future a space for an employee to work.

A major plus is it's on the local village high street so I hope it will improve visibility and also attract clients, there are roughly 1200 limited companies registered in the postcode district and no single dominant accountant that I can see. I'd like to attract larger clients which are happy to pay a good price for a good service. I’d operate by appointment only rather than a walk in service as I may not be there all the time and it should act as a filter.

I feel the options are I do nothing and float along not really progressing or I invest £xxk into it in the hope of it working out financially. The cost to go for it wouldn’t be a small sum, although you have the lease, improvements and general costs of having an office I’d want to promote locally and up my online presence to make the most of it.

There is a big part of me that thinks I’d always wonder what would have happened if I didn’t go for it but at the same time I’m aware the outlook in the near future is not good and the financials for the practice aren’t as good as they had been either.

I haven’t discussed the property with the agent in any real detail yet but I might ask for a viewing just to get a dialogue started, you never know they may offer incentives.

One to sleep on.

Replies (21)

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By Tim Vane
25th Jun 2020 22:58

Shop around. There are going to be a lot of landlords desperate for tenants after lockdown. You’ll get a much better deal than anything you can see now.

But yes, go for an office.

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Replying to Tim Vane:
paddle steamer
By DJKL
26th Jun 2020 00:22

With a heavy heart, given leasing offices is our bread and butter, I concur with Tim. Unless the particular office is the only one nearby likely to be available and suitable a bit of hesitation with the agents may, depending on how he/she is currently viewing your local market and their client's (the landlord's) urgency may strike you a much better deal.

Having said that if you are in Edinburgh and looking ignore the above, buoyant office market, never been as good etc, alas I fear you are not and my lies within this paragraph are pretty transparent. (Having said that we look like we just extended a lease on a warehouse today and we have a prospective new tenant for another unit, but they are not offices or shops where I think the worst is to come)

Thanks (1)
Sarah Douglas - HouseTree Business Ltd
By sarah douglas
26th Jun 2020 00:43

Hi

I agree with Tim and DJKL. I went for an office in 2014 the best decision I ever made and the lockdown has confirmed to me, even more, I want the office. Tim is right though you should be able to get a better deal and I would regard two years as long for now.

Have you ever consider a business centre my lease is 3 months. I am in one with 72 other business which provides me with customers. A couple of things to watch out for

1) Is your service charge -Factor included in these figures?
2) Your water charges ( which is different from your Rates ) will rise if you have a kitchen and toilet in premises.
3) Is your heating included, wifi internet extra?

The reason I mention this because in my business centre, for example, I have no water rates as it is covered by rent as the landlord covers the water for shared facilities for toilets and Kitchen.

I have a kitchen in the office, but I made sure I never put a tap in but take water from a shared facility. Water rates can be very high, and many get burnt.

My heating and service charge is included in my rent. While the next-door business centre charges an extra service charge but WIFI is included. However, I have Fibre Optic broadband phone for £24 a month.

My advice is to look for a better deal and make sure you take into account the potential other costs like your heating and Lighting, service charge, water rates.

Moving to an office was the best decision I made for the business.

Thanks (2)
Replying to sarah douglas:
paddle steamer
By DJKL
26th Jun 2020 09:53

We do not charge anything for services re our studios/ studio offices, tenants are responsible for rates(if any) and water and everything else, including paper towels/soap/loo roll/internet we provide.The exception to this is we have a tenant with a pottery kiln and another with a server that drains the national grid, these we have sub metered .

Not all our units are occupied as offices, we also have craft type business entities from ceramics, card makers, artists, wool dyers etc.

Our licences re these are for 12 months but a lot of tenants have now been there for years, renewing each year; it is I think my favourite part of our portfolio and has a really youthful vibe, they also do great Open Day events when one can tour the studios/buy paintings of penguins etc .

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Replying to DJKL:
Sarah Douglas - HouseTree Business Ltd
By sarah douglas
26th Jun 2020 11:05

Sounds really interesting. I like the Youth Vibe. Our business centre has plenty of young company and most stay at the centre for years as the business centre are good landlords. I was scared to take on the office at first but they gave me 25 percent off my first year and they did a huge amount of work decorating our offices the way we liked basic but no cost they do that for every new tenant but ask you first. The 3 months sold me. The place is a mixture of workshops and offices .

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Replying to sarah douglas:
paddle steamer
By DJKL
26th Jun 2020 11:27

It is more that although some tenants are younger even the slightly older ones have that free spirit, artistic, vibe about them- I was born to be a hippy but got issued a calculator.

Thanks (1)
Replying to DJKL:
Sarah Douglas - HouseTree Business Ltd
By sarah douglas
26th Jun 2020 17:04

What are you saying DJKL that you want to be a hippy artist but your not very good? LOL. I love artistic workshops I am hippy at heart as well, but I am not good at painting or art. However, I have made baskets and done some weaving LOL.

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Replying to sarah douglas:
paddle steamer
By DJKL
26th Jun 2020 20:59

I suspect I was too afraid to follow a career making or fixing things with my hands and followed the safe and respectable route into accountancy instead.

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By Mr_awol
26th Jun 2020 01:29

Interesting since we have been considering whether to go the other way. We wouldn’t abandon an office presence entirely but we did consider downsizing to smaller premises given the popularity of the recently enforced home working.

We aren’t alone either. Another local form are considering the same.

As it happens we are unlikely to do it as we own our current property but whilst I’d say definitely get out of the ‘home office’ id also say don’t necessarily go does one where to ‘grow into’ as by the time you fill it you may well be on the lookout for something smaller

Where about a are you based? What kind of premises are you looking at?

Thanks (1)
blue sheep
By Nigel Henshaw
26th Jun 2020 07:56

I can only give you the benefit of my 20+ years experience during which time I have tried 4 different situations
1 - working from home - good to begin with but difficult as I grew when I needed to meet clients employ staff etc
2 - high street good location cost 12k a year, attracted low value clients and time wasters, I hardly ever managed to get work done when I was there
3- high street in much smaller town but on a busy road - attracted low value clients but lots of them
4 - now I have a very very small office (cost £200 a month) that is really only used for meetings, mail and occasional work, the rest of the time we all work from home

For us No 4 is by far the best option, I dont think bigger clients will take you seriously if you do not have an office, I certainly would not want 100+ clients using my home as a registered office or dropping off paperwork etc, but 95% of work can be done from home so seems pointless to pay more than we need to for a small base that is used occasionally.

Thanks (1)
By ireallyshouldknowthisbut
26th Jun 2020 09:04

Horses and courses.

I have done both, but with a home office you really need something separate to the main house, ideally with its own entrance that you can close the door on at the weekend, and to your family in the week. I couldn't work on the kitchen table or in the spare bedroom.

Now have a very nice home office with plenty of room for two desks looking out on the garden. Few clients visits, but if they do I have a seperate entrance.

When my kids were babies I loved my proper office in a serviced office block just to get out of the (different) house but close enough to come home for lunch. however the cost of that was high, and when i left the money I saved in rent added a huge sum to my monthly mortgage ability and we went "silly big house, no office" instead of "not so big house, separate office". I was considering quite hard buying an office block that had come up in the next street to our old house (which was just off the town centre) and having a floor for me, converting the top deck to a flat to rent out residential, and renting the ground floor out commercial (it was shop or office unit), but thought it too much like hard work although on paper it was a bargain - the rent on the top flat would cover the mortgage with 25% down, and all the rest a bonus. Whole thing has been converted to flats now.

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By bernard michael
26th Jun 2020 09:09

You say 2+ years exactly how long That's quite a high rent for 400 sq ft.
Definitely go for an office but look further.
Is there an empty shop in the area? If so approach the landlord to see if he would mind a change of use. You could get a good deal if the shop's been empty for a while

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Replying to bernard michael:
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By DJKL
26th Jun 2020 09:59

A1 use to A2 use (Retail to offices re financial services)looks to be permitted development if I am reading the English use classes correctly.

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By yelsnew
26th Jun 2020 10:08

Likewise we are considering scrapping it.

Zoom, Slack, Xero, ReceiptBank. Saving yourself best part of £12k per year that you can spend on making a beautiful home office.
We're a team of 10 and the staff are enjoying the lack of commuting, as directors we're enjoying the added freedom (even amongst a lockdown!)

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Replying to yelsnew:
paddle steamer
By DJKL
26th Jun 2020 10:25

I think age of family and available space may have a bearing.

My first practice working from home was in 1994 when I was 34 , the year my daughter was born and when we already had a 2 year old son, I lost my job (made redundant) and worked on private client work , mainly subcontracting, in a flat with a big hallway 36ftx 6 ft which became my office where I worked all hours of the day and night with my wife at home on maternity leave, it was really not ideal.

Compare and contrast my more recent excursion in practice where I have a distinct room that is solely mine (albeit not big) and either children at university or a bit older who did not interrupt work demanding my presence( in fact they may actually now actively avoid me)- a much easier working environment.

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By Southwestbeancounter
26th Jun 2020 14:25

I have done both - worked from home for 12 years and from an office for 20 - would definitely not want to go back to working from home again - I like my privacy on the evenings and weekends far too much now!

The downside is when it snows etc but I can usually get to the office albeit it's a rather slippery walk down a steep hill for a few miles.

I would definitely go for as long a lease as possible with break clauses every two years - that way you have the flexibility if it doesn't work out but you're also not paying legal fees every few years to renew the lease.

Good luck!

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By Cheshire
27th Jun 2020 11:01

I was in the same boat as you are now around this time last year. Found the perfect place with 2 parking spaces if I couldnt be bothered walking, going opposite all the traffic, lovely setting, self contained unit,2 year lease, enough space for staff, £9.5k pa.....I took too long pondering and another Accountant beat me to it. Kicked myself ever since, especially as nowhere of any note has popped up since.

Ive toyed with the idea of a garden office. Would need to be soundproofed as just one of the neighbours likes to play extreme heavy rock whilst she lifts weights in her garden, bit distracting to say the least. Working from home is great sometimes, but the piles of work never leave my mind even when the (spare bedroom) office door is firmly closed.

Right now though, still in two minds about retiring (2nd time) and doing something else. Still no ideas have popped into my brain. Just now whittling down the client list by getting rid of the PITAs. Might just do part time....if they will let me, although that's not worked in the last 3 months, depsite most of them supposedly being shut.

Go for it....try for a discount.

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By Paul Crowley
26th Jun 2020 20:31

Office everytime.
Even with an office disengagement difficult but at least it is thoughts only
Clients only get office landline.

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By SouthCoastAcc
27th Jun 2020 00:12

Thanks all for the responses. I wasted no time and called the agent today but it seems I was beaten to it, I told them to let me know if it fell through but I'm not expecting it.

I'll be devastated if it turns out to be another accountant!

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Replying to SouthCoastAcc:
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By Open all hours
27th Jun 2020 22:55

Sorry to hear that. Per previous there will be plenty of choice coming up, sadly. Was concerned by your last line - sleep on it. My business partner (no relation) found our office at breakfast, mentioned it at 8.50, phoned estate agent 9.03 (they were late opening). On the premises at 10.00, agreed between ourselves by 10.15 (it’s not big). Funds in place by noon. 5 years on, no regrets.

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By legerman
28th Jun 2020 00:07

I'm planning to move offices in a months time, with the rent increasing from £120 a month inclusive to £500 month exclusive. About 8 x the size though, and I will be adding two new income streams, so a little daunting, but exciting at the same time.

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