How to Choose the Right Office Space to Save Money and Grow Your Business

An office is more than just a workspace it’s the foundation of your company’s culture, productivity, and growth. But have you thought about how the right office space can help you save money and drive your business forward?

Renting office space is a significant expense, often second only to employee salaries. Studies show that a carefully chosen office space can lower costs, boost productivity, and support growth. However, finding the perfect fit can be challenging, especially as prices continue to rise.

Essential Strategies to Select Right Office Space

Here are some essential strategies that you must consider while selecting suitable office space:

1. Understand Your Space Needs

Before diving into property listings, conduct a detailed assessment of your current operational requirements and future growth projections. 

• What activities are most critical to your team’s day-to-day operations, and how much space do they require?
• How much room do you need now, and what growth scenarios do you expect over the next 2-5 years?
• Are there any specific space requirements for privacy, collaboration, or specialised equipment?

Additionally, consider the following:

Functional Space Needs: Do you need dedicated spaces for meetings, collaboration zones, or individual workspaces? Knowing your functional requirements will help you avoid paying for space that won’t be used effectively or, conversely, missing out on essential areas.

Growth Flexibility: If you plan to expand your team, look for a space with options for additional desks or room for partitions that allow you to adapt as your business evolves.

Key Cost Indicators

• Average rental rates: Begin around £30-£100 per sq. ft., depending on the city and neighbourhood.
• Cost of modifications: £50-£200 per month for added amenities such as meeting rooms, quiet zones, or tech setup.
• Potential savings: Optimising space usage and minimising unused areas can reduce rental costs by up to 20%.

Pro Tip: Map out your company’s projected headcount growth to avoid costly relocations or renovations within the next 2-3 years. Overestimating or underestimating space needs is one of the most common—and costly—mistakes.

2. Evaluate Location for Cost and Accessibility

Location plays a huge role in rental costs. Prime city centres come at a premium, but nearby areas often offer substantial savings without sacrificing convenience. Central London had the largest supply of office space in the UK in 2024, with 284 million square feet available. Manchester follows, offering 22.5 million square feet. For businesses seeking balance between prestige and cost, locations just outside major hubs can be ideal.

• Is a premium city-centre location worth the added expense, or can a nearby area offer similar benefits at a lower cost?
• How important is proximity to clients and business partners?
• Does the location provide convenient access to public transport, amenities, and a vibrant local ecosystem for your employees?

Cost Guide for Locations

• Central London: Premium locations typically range from £70-£100 per sq. ft.
• Secondary city locations (Manchester, Birmingham): More affordable at around £30-£40 per sq. ft.
• Suburban or outskirt locations: Reduced rates from £15-£25 per sq. ft., offering substantial savings for businesses less dependent on a central location.

Key Cost Indicators

• Transport savings: Locations with strong public transit links can reduce staff commuting costs and parking needs.
• Rental differences: Moving from a city centre to an area just a few miles away could reduce costs by up to 40%.
• Employee retention impact: A conveniently accessible office can improve employee satisfaction and retention, which reduces hiring costs.

Pro Tip: Perform a commute analysis for your team to understand how different locations may impact their travel time and satisfaction. Offices near transportation hubs or central amenities can increase employee satisfaction and retention, reducing turnover costs.

3. Calculate Total Costs Beyond Rent

Rent is often just the starting point. Many companies overlook additional expenses like utilities, service charges, and maintenance fees, which can add 20-30% to your overall budget. Ensure you have a clear picture of all ongoing costs.

• What regular monthly expenses are you likely to incur beyond rent, including utilities, IT support, and property taxes?
• Are there specific expenses unique to this building or landlord that could add to your overall cost?
• How stable are utility rates, and what seasonal fluctuations should you expect?

Additional Cost Breakdown

• Service charges: £50-£150 per month, often covering building maintenance, cleaning, and shared facilities.
• Utilities: £100-£300 monthly based on size, usage, and energy efficiency.
• Internet and IT support: £50-£200, depending on the speed and type of network required.
• Property Taxes: Usually 10-20% of rent, depending on the location.

Key Cost Indicators

• Utility rate stability: Check with current tenants to understand typical monthly fluctuations.
• Hidden fees: In older buildings, additional maintenance or repairs can inflate service charges by 10-15%.
• Budgeting for surprises: Set aside a contingency fund for unexpected repairs or fee increases.

Pro Tip: Request a detailed breakdown of utility and service charges from the landlord to see which costs are fixed and which may vary based on season, building occupancy, or other factors.

4. Explore Flexible and Serviced Office Solutions

Serviced office solutions offer an alternative to traditional leases, especially for companies needing flexibility and ease of management. These spaces typically bundle amenities like utilities, cleaning, and meeting rooms, reducing the operational burden.

• How important is flexibility in lease terms for your business’s potential growth or scaling down?
• Does this office include bundled services that could offset operational costs?
• Will a serviced office meet your specific needs, or are there limitations that could become costly later?

Pricing for Serviced Offices

• Monthly rates range from £300-£1,000 per person, depending on the location and amenities provided. This price includes utilities, cleaning, and essential maintenance, making budgeting more predictable and allowing companies to plan accurately.

Key Cost Indicators

• Per person cost: £300-£1,000, varying by location and the range of services included.
• Included amenities: Many serviced offices include essential items like reception staff and IT support, reducing operational costs.
• Scalability: Providers like One Avenue Group offer short-term leases, allowing you to scale up or down as needed, which is especially useful for growing or seasonal businesses.

Pro Tip: Calculate the costs of additional services your team might need (e.g., IT support, security) and see if these are included in the lease. Serviced offices can be ideal for startups or businesses experiencing rapid growth since they offer flexibility and bundled services that simplify budgeting and management.

5. Review Lease Terms Carefully

Understanding lease terms in depth can save significant costs, especially if you can negotiate favourable terms. Ensure that the lease includes provisions that align with your business’s potential need for flexibility.

• What is the minimum lease term required, and does it fit with your business’s projected growth?
• Are there break clauses or exit options that provide flexibility in case your needs change?
• Can you negotiate for rent-free periods, tenant improvement allowances, or other concessions?

Lease Length and Pricing Flexibility

• Short-term leases: Typically more costly per month but allow flexibility in scaling your space requirements.
• Long-term leases: Lower monthly rates but require a longer commitment, which may not suit businesses anticipating changes.

Key Cost Indicators

• Rent-free periods: Some landlords offer up to three months free, which can significantly reduce upfront costs.
• Tenant improvements: Landlords may provide allowances for specific modifications, reducing the cost of adapting the space.

Pro Tip: Look for terms that allow early exits or break clauses if your business grows or pivots unexpectedly. Negotiating lease flexibility can prevent penalties and ensure smoother transitions as you expand.

6. Consider Employee Well-Being and Productivity

Employee satisfaction directly influences productivity and retention. An office with ergonomic furniture, natural lighting, and breakout areas can reduce turnover, boost morale, and improve overall productivity.

• What elements of the workspace environment can help improve productivity and reduce sick days?
• Are there amenities or ergonomic considerations that are crucial for your team’s well-being?
• Will spending on certain amenities lower costs related to turnover or recruitment?

Cost vs. Benefit for Amenities

• Ergonomic furniture: Costs around £200-£500 per desk but can lead to fewer health issues and more productivity.
• Natural lighting: Can reduce fatigue and eye strain, improving focus and job satisfaction.
• Well-being features: Breakout areas, kitchens, and comfortable seating encourage employee engagement.

Key Cost Indicators

• Ergonomic investments: £200-£500 per desk can pay off in reduced sick days and improved morale.
• Productivity gains: Well-designed spaces can improve efficiency, reducing the need for overtime and lowering recruitment costs.

Pro Tip: Survey employees about their workspace preferences to identify key features that improve comfort and efficiency. Investing in employee-friendly office features can offer long-term financial returns by reducing absenteeism and improving productivity.

Conclusion

Choosing the right office space is a critical decision that impacts your business’s growth, employee satisfaction, and financial stability. By weighing factors from location to employee needs, you can secure a workspace that sets a foundation for long-term success.

Make an informed choice to create an office environment that promotes both financial prudence and future growth.