Your monthly rent isn't the only cost that you need to consider when you're considering relocating or expanding your business. Occupancy costs are another ongoing expense that you need to take into consideration and account for, and with some careful planning and a little effort, it's possible to minimize these expenses to increase your profitability.
1. Have an Expert Ally
Having a corporate real estate broker in your corner can help you keep occupancy costs to a minimum. Brokers know the market inside and out and can be valuable allies at the negotiating table, representing your interests with the landlord to help ensure you get the most concessions. Using the services of a corporate real estate broker won't add extra costs to the search for the perfect space either, as their fees are covered by the landlord.
2. Go Long
While it's not always wise to make a long commitment to remain in a space, when long-term leases make sense, they can lead to reductions in occupancy costs. Long-term leases greatly benefit landlords, as they postpone having to seek new tenants. Many landlords will be willing to make money-saving concessions with longer lease terms.
3. Use It or Lose It
Have unused square footage in your office space? Reevaluate how you're using your space and find a way to make use of it, as every square foot that sits empty is wasted money. If you can't find a practical purpose for the extra room, revisit your lease. Are you able to sublet the additional space? Could you renegotiate your lease now, extend your term and eliminate the extra square footage? Renegotiating could also reduce your occupancy costs with new concessions, as many landlords are willing to reward those who extend their leases early.
4. Think Ahead, But Realistically
When you're searching for office space, every guide you read will tell you to consider your future needs and make sure that you rent a space that will allow you to grow. This is naturally great advice, as no business wants to end up having to expand in the middle of a lease or being forced to move after just one lease period because they've outgrown their space. The flip side of this, though, is that it's easy to overestimate your future needs and ending up with way more office than you can use even if you do experience growth. Make sure when you think about the future, you do so realistically and be certain that you can use the extra room for something in the meantime. Otherwise, your occupancy costs will be unnecessarily high.
5. Green Your Business
Sustainable initiatives make your business more eco conscious and can be friendly to your bottom line. Installing energy-saving LED lights and implementing policies to conserve water and electricity can make an impact on your occupancy costs. Even things as simple as encouraging employees to keep the thermostat at a certain temperature and turning off lights in rooms that aren't being used can significantly lower the cost of your utilities.
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