Are you considering leasing an office for the first time?

It can be a daunting and exciting process and we would like to share our 10 things to consider when leasing an office

Remember there are many ways to write a lease and legal advice is recommended before signing one.

1. How long a lease do you need?

It might sound tempting to take a short term lease, you’re just starting out and not sure where you’re going to be in six months. But, how much will you need to invest in fit out? What other contracts are you signing for 2 years, e.g. internet, phone lines, etc? The risk and benefits need to be weighed up.

Long term lease benefits:

  • Confidence you can spend money on a fit out that will essentially stay the same for the term of your lease
  • Negotiation leverage to ask for a) contribution to fit out b) rent free periods e.g. 3 months
  • Consider options for extension e.g. start a 3+3 which means three years with the option to renew at market rent for another 3 years.

Long term lease risks:

  • You are liable for the total contract amount plus the make good and any other terms if you need to break your lease.

2. Understand the “make good” clause

Any changes you make to the property might need to be reversed and returned to the property owner as a shell, this is costly especially when you’re closing down or moving to a new office and have additional expenses already. So keep this in the budget or negotiate it out. Note some serviced offices also charge a mandatory make good when you leave even if there are no changes.

3. Is the internet like a home connection?

Internet is an essential item in the office particularly with cloud based services, without it works grinds to a halt and might cost you thousands per day in lost sales and productivity. In an office, a connection like your home based ADSL 2+ or NBN internet service can prove to be a real bottle neck once you have more than a few users working at the same time. The upload speeds are where you start to see the frustrations occur, secondly your connection is shared with a huge number of other users in the local area so the speeds go up and down based upon traffic.

The main points to look for are:

  • Symmetrical services so uploads are as fast as downloads
  • Contention ratio (less or no people sharing the same line)
  • Business grade reliability and SLA’s
  • Speed – Consistency is key here, an advertised 20mbps on a business line is guaranteed, your residential internet connection is not.

4. WHS – work health safety is your responsibility

Setup, Maintenance. There will be an initial learning curve in setting up your WHS documents, writing procedures and an ongoing cost in maintaining them. This might include buying good chairs to avoid a lawsuit from back pain. Or ensuring fire extinguishers, medical kits, and electrical items are all checked by professionals periodically.

5. What do I need to fit out & maintenance

Commercial isn’t like residential, you might be taking an empty shell with no carpet, blinds, kitchen, toilets or walls and you need to pay for and fit these out yourself. This is normal. Including the cabling for power and networks.

After you have your base fit out you then start to furnish with desks, chairs, power, internet. Over time these items fail and wear, so budget for refurbishments and replacements based on the quality you start with e.g. a cheap chair might not last more than 6 months and cause back pain. Also consider cleaning costs or what its going to cost you to do it.

6. How much office space should I take?

If your starting out, do you know how many people you need to employ now, in 1 year in 3 years time? Chances are your office can’t expand and its in those first few years of hiring that first employee that you will learn. Keep in mind your business goals and will you be hampered by the size in a few years because you only have space for a few employees. A rule of thumb depending on desk size you can fit 1 person per 6-10sqm.

7. What size desks do I buy?

Flexibility, expandability and comfort. Buy desks to fit the location, get a plan and start sketching out (to scale) what fits and what doesn’t, or get an architect to help you. Some pointers include ditching the big L desks. With the paperless office this extra space for the “L” really reduce the option for expandability in your design for little comfort benefit. When choosing a straight desk 1.8m wide is large, 1.5 is medium 1.2m wide is comfortable but on the smaller end.

8. Parking, public transport, local amenities and access to transport

Location to parking may affect who you can hire. Also consider what other local amenities are around like coffee shops, dry cleaning and child care etc..

9. Staged approach

While the office size might need to be fixed for the lease term your fit out doesn’t. Plan for the end goal but consider what’s the minimum you need today, e.g. you might plan for 10 employees but if its only yourself and one or two employees then consider only buying 4 desks and spread out the space for now. It’s surprising how as the business grows your needs change and this gives you flexibility to change and reduces your costs to open.

10. Do you need to lease an office?

Consider a co working space, at they have no bond, no lease, cancel anytime, and everything in the above 9 items is taken care for you. There are also many other shared office and co working space solutions available around Australia and the world so there is possibly one in your local area.

Want to know more, get in touch with Aidan Green from Inspire Coworking;, or

try out a free day