Many companies sign commercial leases during peak periods only to find that it becomes difficult to keep up with rental costs when business slows down. When you're locked into a lease, you can't simply move to look for a place with a lower cost per square foot whenever you choose, but there are still ways that you can reduce costs.
Here are seven methods of cost reduction that corporate tenants can take advantage of:
1. Sublease
If your business has slowed down to the point where you need fewer employees, you likely now have unused office space that you're needlessly paying for every month. Subleasing that space to house one or two departments of another company, a small business or a one-person operation will prevent you from paying every month for empty space.
2. Rent
When you need to replace furniture or office equipment, compare the cost of renting versus buying. Renting can spread your costs out over a longer period of time, and in some cases, is a more practical option, especially if you need to purchase something like a computer that can become quickly outdated.
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3. Renegotiate
Your landlord may be willing to adjust your rent if you renegotiate now and extend the length of your lease. This is especially true if you're in a market where general demand for real estate is low or in a building that already has a number of vacancies.
4. Go Green
Greening your business can cut down on your utility costs and save you money every month. While you don't want to invest a lot in expensive renovations, there are inexpensive and cost-free ways that you can reduce energy consumption. For example, some lighting fixtures can be fitted with money-saving LED bulbs without requiring any modifications. You can also put a lock on your thermostat or turn off lights in rooms that aren't being used.
5. Use Contractors
Hiring independent contractors that work from home can help you save money. You won't need additional space to accommodate these workers, and you won't have all of the expenses associated with hiring employees to deal with. Just make sure you familiarize yourself with the laws regarding independent contractors; treating employees as contractors can get you into legal trouble.
6. Move to Telecommuting
If the size of your team hasn't shrunk, you may still be able to sublease or at least avoid having to take on additional space to accommodate all of your employees. Experiment with having employees telecommute instead of working in the office. Even if it isn't feasible to have an employee out of the office every day, he or she may be able to work from home 2 or 3 days per week and share a work area with an employee that comes in opposite days.
7. Store On Site
If you're paying for offsite storage to keep furniture and other items that don't require temperature control or extra secure environments, use empty rooms in your office as a holding place for them. This way, you can give up your storage locker and save money every month.
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