From start-up to enterprise: when do you need an office?

When do you need an office?

Start-ups in the early growth phase find themselves in a dynamic and exciting environment. Enthusiasm for new projects and collaboration in small teams characterize the everyday life of these young companies.

As they grow and the number of employees increases, a new challenge arises: the search for a suitable office. In addition to aspects such as location, size and facilities, companies also need to ask themselves: “When is the right time to move from a home office to a larger office?”

All beginnings are small

Many start-ups begin within their own four walls. Whether it's a cozy home office or your own living room - the beginning is often modest. Even huge companies like Google and Amazon started out in garages and are now Fortune 500 companies with hundreds of thousands of employees.

The right time to move to a larger office is when the home office is no longer sufficient. As soon as the first employees are hired, a suitable office should be rented. Initially, many start-ups look for smaller offices on the outskirts of the city to keep costs in check. As the number of customers and order volume increases, so does the number of employees. A new, larger office becomes necessary in order to meet the increased requirements.

The search for the ideal office

More employees also mean a higher demand for better and more easily accessible infrastructure. Companies are looking for offices in central locations, which often proves difficult due to high demand and limited supply. Offices are usually not flexible. When employees switch to part-time work or new teams join, the company faces the challenge of finding an office with suitable capacity. Established companies also face similar problems.

Flexibility in everyday office life

Companies go through alternating phases of growth and contraction. Office and company growth is not constant, but fluctuates between periods of upswing and consolidation.

It can happen that an important customer is lost or employees have to be made redundant. Digitalization means that offices are less in demand, as home office models are on the rise. External circumstances such as a pandemic can also lead to offices being less busy. Unused desks are a financial problem. Like start-ups, large companies also need to find a flexible office solution to adapt to changing requirements.

Challenges when looking for an office

The dilemma between growing and shrinking companies is great, and the ideal options are few and far between. Making the best use of office space is difficult because offices cannot adapt to a company's spatial changes. There are several reasons why our conventional office concept should be reconsidered:

Long rental contracts

Job seekers are often confronted with long leases that make it difficult to find a suitable office. While longer lease terms often mean savings in the long term, they can become problematic if the company has to lay off employees and wants to move to a smaller office. Long-term leases are particularly challenging for start-ups, as they can rarely predict exactly how they will develop.

Capital commitment through the rental deposit

Many landlords require a rental deposit at the outset, which must be paid when renting an office. This deposit often amounts to three to six months' rent and can be difficult for a young start-up to raise, as equity is usually very limited in the first few years.

High acquisition costs for infrastructure

Demand for offices is particularly high in the city. Companies benefit from good networking and a central location, but the costs are correspondingly high. These high initial costs are a particular problem for smaller start-ups.

Many companies therefore go one step further and rent out their free workstations or rent additional desks. Perhaps you have also considered implementing this idea in your company and realized that the choice of options for subletting or renting unused workstations in the short to medium term is limited.