Sharing Office Space -A Cost Saving Strategy

sharing office space

Operational costs are a part of any business. Brick & Mortar (B&M) operations have to deal with a fixed rental lease. For a majority of B&M Small and Medium Enterprises (SME), it is the largest monthly expense.

Businesses that are not involved in retail does not need a spacious storefront. A large office is impressive, but it is also costly. Start-ups and small businesses should not spend money for appearance sake. It will only lead to failure.

Start-ups and SME's have a small client base. It should be a grass root operation focusing on its core competency. But it is not enough. There are plenty of businesses with good products and services that failed. There should also be an effective marketing strategy and sound capital management.


Sharing a Lease to save on rent and utility costs.

Subleasing office space can reduce the price of the lease. It will also save on furnishings, utility costs, and maintenance. Rent is not the only cost associated with office space. 

Sharing a lease will mean that you will share utility bills, association dues, and building/cleaning maintenance costs. Just like rent, it is a monthly expense. Sharing the burden on it will keep your operational costs under control.

Utility bills are different from rent. Rent is a monthly cost and subleasing office space or subletting can easily be stipulated in a contract, but utility costs are usage related. Some businesses need more electricity than others. Some shops like a spa or dental clinic will use more water.

You can also share internet connection with small lessees. You can also save costs if both your business requires an internet connection, but are not dependent on it. It is not a good idea to share landline.

The simplest way to share utility bills is to pay a contract stipulated percentage. It may still be unfair and impractical if you're subleasing to a business that uses a lot of water and electricity. Talk to the utility company regarding how to install a separate meter for your sublet. There will be costs involved, but it's better than having sour relations with your lessee.


Cut cost & share an office waiting area for marketing

Clients of small professionals are mostly from referrals. A shared waiting area is a good source of referrals. Patrons will wait patiently for a service they know are worthwhile. They will talk with other customers in the waiting area and discuss the obvious topic among strangers. The purpose of their visit that day.

Loyal customers will gladly talk about your service to other people in the waiting area. When the time comes they would need a product/service like yours, they will remember that conversation.

Small businesses, especially established small businesses skimp on marketing. They find it difficult to find the budget for expenses that are not part of their production. Referring and networking with your sublet is a good way to find new clients.

It also opens up the possibility of sharing the cost of a front desk receptionist.

Privacy concerns.

A lot of businesses would require privacy. Sharing an office space could mean installing a drywall divider, a separate HVAC, and their own window. The window is just for legal purposes. By real estate definition, a "room" will need a window. Windowless rooms are called a "den". "Rooms" rents are higher compared to "dens".

Paper files that contain sensitive client files and other confidential documentation should also be secured. If you are sharing an open-floor plan office space, buy a safe and file cabinets that are tamper proof.

You can also lease out the file cabinets and safe your tenant needs it. 


Lowering your cost by sharing a lease is always a good idea. It is like finding a roommate. It hinges a lot on a choosing the right person/business to work with. Services that complement each other such as lawyers and accountants will increase both your client base.

Maintaining a healthy operational cost management is essential for every start-up and SME. It is the primary reason why businesses fail in their first five years. Sharing an office space can cut your fixed costs in half. It can give the time you need to establish a solid foundation for your business.