Operating a small business can be challenging. Issues can arise at any moment and small business owners have to be ready to address any concern, sometimes on a moment’s notice. Cost containment is crucial to a business’ success, and one important component of fixed cost is the expense relating to office space. There are several options for the small business owner in Los Angeles, California.
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Office space lease
Office space leasing is the most common solution to office space needs. For a small business operating in the Los Angeles area, the available office space varies widely in terms of both size, amenities and cost. If you operate a business that requires regular face-to-face interaction with customers, easy access to the office and free parking, then office space on the outskirts of the city might be best, as it will make it much easier for customers to find your place of business with fewer traffic issues. If your business interactions are less frequent and your employees like the added amenities of a high rise office building, then office space in the inner city might be the best option. Many downtown Los Angeles buildings include desirable extras, like fitness centers, restaurants and even child care on site. Downtown office space, however, is usually priced at a premium and the overall cost could be out of reach, even for more established small businesses. A good online resource to search for available lease space in the Los Angeles area is LoopNet.
Office building purchase
Is your business looking to establish itself in a single space and has no anticipation for relocation? If so, then it makes sense to consider purchasing an office building. This requires an initial cash outlay that is usually larger than leasing the same space. If the building purchase is financed, it also means paying finance charges over the life of the loan. The pride of ownership is nice and, depending on location, there is an excellent chance that any office building purchased in Los Angeles will appreciate over time. However, buying an office building creates added expenses, such as maintenance costs, property insurance and property taxes. Unlike with a lease, you cannot quickly up and move your business to a new location when the lease expires, and will first have to find a buyer for the building, which can consume additional time and resources. If buying a building suits your small business needs best, BuildingSearch.com can be a great tool to help search for the right building.READ MORE: Tiger Woods Will Return To Competition At PNC Championship, 10 Months After Rancho Palos Verdes Crash
Among the different options for small business office space, a home-based office is usually the most cost effective. Employees can work remotely from home and connect when necessary via email, cell phone, or through other technology. In a large, sprawling metropolitan area like Los Angeles, a home-based office is often a great stress reducer because it eliminates the need to spend hours each day commuting to the main office. Home-based offices, however, are not always practical and may not be a good idea if your employees need to meet regularly with clients. In addition, a home-based office means less direct interaction with employees, leading to a reduced sense of team belonging and purpose. Still, this is a good idea from a cost perspective and it also presents tax advantages, since home office space is a tax write-off in most instances.
Opting for a co-working space involves leasing a space with other businesses, and can offer some distinct advantages not available with other arrangements. With co-working space, the costs are minimized because the leasing expenses are divided among multiple companies. Flexibility of usage can also cut costs as some co-working spaces offer pay only by the hour, making them ideal for a small business that doesn’t need the traditional 40-hours-per-week to effectively run a company. Another advantage is the ability to target specific, compatible companies. By selecting a co-working space, a small business can target other business to share the space and focus on businesses that provide synergetic benefits. For example, your small business might focus on residential household services and you might be very efficient at maintenance and marketing, but you may be lacking in business skills, such as information technology. With a co-working space, you can choose to share an office with an IT oriented small business, thereby harnessing the talents of another small business to benefit your own, and vice versa. WeWork is an excellent online resource to help find the best co-working space for you and your small business.
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This article was written by Bryan Carey for CBS Small Business Pulse.