How to Plan Your Budget for London Office Space
Finding the right office space in London for your business is tricky.
There’s the quandary of knowing the best locations, the task of sifting through dozens of exciting spaces to find the perfect one, and of course, the finances that are involved.
London office space can be on the expensive side, and most expensive in the world, but that’s because (and we may be slightly biased here) we believe it is the best place to work in the world.
Renting an office in London is more than just a financial commitment; it’s a strategic decision that can impact your business in many ways, from employee satisfaction to client perception.
When renting an office, you should always set a budget.
But what should go into this?
With a myriad of options and occasional unexpected costs lurking around the corner, budgeting for your ideal space can feel like navigating a maze.
That’s where we come in. At One One One, we specialise in helping businesses like yours make informed decisions that drive growth and success.
That’s why we’ve created this guide to help you devise a budget for your office space.
Let’s take a look.
The Ten Steps to Working Out Your Office Rental Budget
Step 1: Know What You Need
First things first, let’s talk about your needs.
How big of a space are we talking about? Remembering that Leasehold and Managed office space is charged on a per sq. ft. per annum basis.
Do you want to be in the heart of the City, or are you more of a Camden or Soho kind of brand?
What type of office are you looking for—traditional lease or co-working, Serviced or Managed?
Knowing what you need will help you set a realistic budget and let you filter through our long list of London offices to focus on the ones that are right for you.
Step 2: Do Your Homework
You wouldn’t buy a car without checking out a few options, right?
The same goes for office space.
Why not browse our range of offices that would suit your business and take a look at the varying prices there? Also, have a look at our Market Rent Guides. This should help you build an idea of how much this kind of space will cost and help you plan a realistic budget.
Sounds like more work than you have time for? Well, get in touch with our team who can provide advice on this for you and set you on the right path.
Step 3: Don’t Forget the Extras
Ah, the extra costs—the bane of any budget.
Remember, the rent is sometimes just the tip of the iceberg.
You’ve got Business Rates, Service Charge, utilities, maintenance, and possibly a fit out and furniture to think about.
Oh, and let’s not forget that pesky security deposit.
If you’re not prepared for these costs (and struggle with the negotiation process) they can be a nasty shock and take a much bigger chunk out of your budget than you expected, so make sure you look into them and add them in.
Step 4: The Legal Stuff
Unless you’re a legal whiz, you’ll need a lawyer to look over your lease agreement.
Trust me, it’s better to be safe than sorry.
While it will cost you money, the peace of mind you get from knowing everything is above board will be well worth the fee.
Step 5: Think About Commuting
If your office is a pain to get to, your staff are soon going to get rather annoyed, especially when it comes to paying for public transport every day.
Check out the transport links, bike racks and parking options and try and find somewhere that will work for everyone.
If you pay to have somewhere your staff can park, this could add to your costs. While not ideal on your budget, this is important for keeping your team happy, so again is definitely worth sparing a thought for.
Step 6: Be Flexible
Life is unpredictable, and so is business.
Maybe you’ll need to scale up or down in a year. Look for lease terms that offer some flexibility, with lease break options and the option for you to sublet or assign any unwanted space
Yes, shorter leases might cost more per square foot, but they give you room to manoeuvre.
The key here is to ensure some money is left in the bank if you do need to move again. Your budget shouldn’t completely drain your funds and leave you stuck.
Spend enough to get somewhere suitable and right for your business, but always leave a safety net just in case your circumstances change.
Step 7: Crunch Those Numbers
Now that you’ve got all the info, it’s time to create a budget plan.
Break it down into fixed costs, variable costs, and one-time costs.
This will give you a clear picture of what you’re in for, and how much you should be spending every month.
The most expensive time is always the first month as you move in and most payments come out, but if you have a clear understanding of the recurring costs that follow, you can ensure your finances are always in a healthy place.
Step 8: Keep an Eye on Things
Budgets aren’t set in stone.
Make it a habit to review your expenses monthly and do a big review at the end of the year.
This will help you make any necessary adjustments.
If your bank balance is rising, but your staff are fed up with working in a bad environment, maybe an upgrade will be what your business needs to go to the next level.
Alternatively, if you are spending too much and your bank balance is dwindling, then it could be time to look for ways to resolve this problem.
Again, flexibility is key here so remember to seek this in every rental agreement you sign up for. Make sure to use a tenant-only agent, like One One One, to advise you on making sure your lease is as tenant-friendly as possible.
Step 9: Have a Safety Net
Unexpected costs are like Great British rain—they’re inevitable.
Always have a contingency fund for those “just in case” moments.
We’ve touched on this regularly throughout the blog, but it is absolutely vital and something that should be always maintained in every budget you do.
Step 10: Get Some Pro Advice
If numbers aren’t your strong suit, consider getting advice from a financial advisor, accountant, or an agent here at One One One.
While advisors and accountants can do a good job of assessing your finances and calculating rental budgets, our team can combine this with many other services, such as negotiating lease contracts and office search and selection.
A budget is a serious matter, so if you’re unsure then it is always best to seek help.
Find Your Perfect Office with One One One
At One One One, we understand that finding and budgeting for the right office space in London can be a complex process.
It’s not just about finding a space; it’s about locating one that aligns with your business goals, team needs, and, of course, your budget.
That’s why we’re committed to offering expert advice and tailored solutions to help you navigate this important decision.
We aim to make the process as smooth as possible so you can focus on what you do best, running your business.
So, if you’re feeling overwhelmed by the prospect of budgeting for office space in London, remember you’re not alone.
With careful planning and the right guidance, you can secure an office space that not only meets your immediate needs but also offers the flexibility to grow and adapt as your business does.
Ready to take the next step in your London office space journey? Contact us at One One One and let’s turn your business dreams into reality.
And in the meantime, why not give us some insight into what you need by filling in our build your own office tool?