If you rent or own an office, it’s likely that the costs of running it takes up a huge portion of your company budget. For some businesses, the individual expenses of rent/mortgage, energy bills, business rates, insurance and maintenance can become so huge that they end up swallowing up any trace of profit. This could result in your business struggling to get by, potentially even having to take out debts to cover losses. If you’ve got to this point, it could be time to start taking steps to reduce office costs.
But just what can you do to cut the costs of running an office? Below are a few different measures you can take.
Move to a cheaper location
Location can have a big impact on costs like rent, insurance and business rates. If your office is based in a prime location, consider whether it could be worth moving to somewhere a little less prestigious. This could allow you to potentially afford an office of a similar size for a lot less.
A cheaper location does have its drawbacks of course. If you rely on footfall to generate customers, you could see a loss in customers by moving to somewhere that isn’t as central. A cheaper location may also have a higher crime rate, less pleasant surroundings or it may simply be less accessible (which could make it harder for clients and employees to get to).
If most of your customers discover you online and book appointments to see you (or rarely visit your office) then location may not matter so much. In some cases, a less central location may even be more convenient – a less central office could come with better parking options and may even be easier for some employees to commute to.
Embrace hybrid working and go smaller
Another option is to move to a smaller office. The bigger the office, generally the higher the rent and energy bills. Downsizing could help to cut these costs by as much as half in some situations.
Of course, a smaller office means less space for you and your employees to work. However, many companies are finding that they don’t need to have desk space for every individual employee. A hybrid working model could involve allowing certain employees to work from home on certain days. You could create a system in which half of your employees work from home, while half work from the office, allowing you to get rid of half of your desks and share them (a system commonly known as ‘hot desking’).
There are likely to be more options when it comes to smaller offices, potentially also giving you more choice when it comes to location. Sites like Tally Market can be used to find available office space in your area. These sites can also be used to look for coworking spaces and meeting room hire.
Embrace an entirely remote workforce – and go office-less
Many companies were forced to switch to an entirely remote working system throughout the pandemic – and some of these companies have never looked back. Making all your employees work from home permanently could allow you to get rid of your office completely, getting rid of all the costs associated with it. This may seem like an extreme measure to take for some businesses, however it could result in huge savings.
Studies show that many employees are more productive when working from home. By cutting out the need to commute, it can also save employees time and money. On top of this, it allows employees to work around family commitments.
Of course, not all employees will want to work from home permanently. You could also find that collaboration and camaraderie is negatively affected. It could be worth discussing the idea with your employees and trialling it before taking the step to go fully remote.
Share office space with other businesses
More businesses are finding that they can save money by sharing office space with other companies. Providing there is no conflict of interest, this could have many benefits, allowing you to share out not just general office costs, but also equipment and other resources.
If you own an office with unused space, you could consider renting out some of this space to another business. There may even be cases where rented offices can be sub-let to other businesses (just make sure to get permission from the property owner first).
If you have a small team, you could even look into co-working spaces. These are offices in which you rent desks, often shared by multiple businesses and freelancers. It’s a lot cheaper than renting a designated office, and you’ll be able to socialize and network with other professionals (just be sure that you don’t find this to be a distraction).
Invest in energy-efficient upgrades
If energy bills are causing you a headache, it may be possible to reduce these costs by making energy-efficient upgrades to your office building. This could include upgrading an old HVAC system, installing insulation or even installing solar panels to generate your own supply of electricity.
If you rent your office or otherwise do not have permission to make permanent upgrades, consider whether you can still save money by upgrading to energy-efficient equipment or using LEDs. You’ll have to spend extra upfront, but you’ll save money in the long run. This guide at Business Electric offers more tips on ways to save energy.
Negotiate your lease/mortgage
It’s also possible to save money by simply negotiating your current rent or mortgage payments. If you’ve been a loyal tenant that has been good at paying rent on time, the property owner may be willing to write up a new contract with reduced rent. Mortgage lenders may similarly reconsider monthly mortgage payments if you ring them up – particularly if you’ve been quite good at keeping on top of mortgage payments until now.
You may also be able to negotiate other bills like property insurance. Again, it helps to have a good history with an insurer – if you’re in arrears, an insurer will usually be less sympathetic and less likely to lower your rates.