Business Premises & Business Growth

I hate fixed costs that can't be adjusted with growth/contraction of business.

We've had to break leases in the past in order to cope with growth above expectations. The extra floor in the CBD office we were going to take has now fallen over and so we are looking for more space again.

While I intend to reduce the rate of growth next year, we are still growing strongly. Three years is a long time in business and taking a 3 year lease while trying to estimate how many people we will need to house in 3 years is problematic.

With dramatically slowed growth we would at least still double our current staff numbers in the next 3 years. If we take space large enough now to allow for that, we are up for an enormous amount of wasted rent and impact on cashflow/profit. There is also always the chance that the economy tanks and growth stops altogether. Don't take enough space and we can be bursting at the seems in 18 months time and trying to look for solutions.

There are ample subleases around at present. These offer a solution but then have to be offset with moving more often.

Although Brisbane CBD office market is definitely in the tenant's favour at the moment, when you are talking about 100's of m2 at effective rents in the $400-$450/m2 it is not pocket change.

 

Why don't you take out a larger lease in line with your growth targets and then sub-lease the balance you don't need until if / when you get there. Being involved in sub-leasing is another overhead you may not want to be immersed in.

Unless you fully own the floor or building, you'll never have full control of this situation.

Most small businesses could only dream about these kind of problems

 

Is it possible to "outsource" to the suburbs? Sure the key staff need to be CBD but can admin stuff be done away? It might cost some $$$ to set up the networking but less than $400m2.

Hubby was bitching that we needed more space (at least we are factory space at $100-$120 m2. But still a cash drain). I questioned long and hard at WHY AND FOR WHAT We worked out that a couple of storage sheds for bulk stock around the corner (at a cost of just $3k pa) have worked out well, and freed up space for production staff in the actual factory.

Of course I realise you need way more than just storage..... but the principle is the same ....who (or what) needs how much space and how to minimise the cost of non "look good to the client" space. Hope you get my drift

 

Would you consider offering work from home and hot desk for back office staff? Would that help?

 

Subleases are everywhere at present and some have been around a long time. I guess if we made it very cheap we might get someone.

Going to buy a building in 3-5 years time, once business has settled.

There was 3 staff (including me) in March 2014 when we opened.

 

Possible yes. But I am trying to not separate us anymore than we can.

 

We do have a zero face time policy for those who are at associate level or above. Many do take advantage of that.

We have to have people in here going to titles and settlements throughout the day. I have offices on the coasts also but bulk of work done here.