Advice on first office, first employees.

[Pab]

Dear all,

12 months ago I started a home-based business. It's grown sufficiently that I now need to get an office and some employees (2 to start with) to help out as we're at bursting point.

I'm looking to get a leasehold office (rather than serviced office space). Getting the office, associated costs etc is all very straightforward, but I was wondering if anyone had any nuggets of information that may prove useful? Lessons learned?

And the same goes for getting staff... any particularly useful information you can provide? What would you do differently?

There's lots of information out there to guide me through any steps my company and I need to take, but I thought tapping into your minds could be very useful.

Thanks in advance

 

[jholden]

Oh Pab,

Where to start?

Taking on staff, get a contact of employment or at the very least a letter setting out terms of their engagement, that will save a lot of hastle latter on. In it agree holidays, sickness benefits, grievance procedures etc and then everyone knows where they stand.

Why did you not take serviced offices?, That's what we have, that way you pay one lot of rent to cover everything so no hidden costs, unless your offices are cheaper this way?

Don't forget you need insurance for office, staff and equipment.

Data backup and disaster recovery should also be high on your list.

Home time

Good luck,

Jason

 

[KidsBeeHappy]

Join the FSB and get proper cover for employment disputes. Join now, before you employ anyone and it's £100pa with a £50 joining up fee.

This is the most valuable piece of advice i never got. Two employment tribunals later I wouldn't leave home without it.

 

[Pab]

Thanks for the quick replies!

I will certainly be seeing a solicitor regarding an employment contract. I think that was first on my list.

Data backup is now covered, as is the office server, email, etc (server with SBS 2003).

I've not ruled out serviced office space. I guess I've never had it sold to me and preferred the idea getting our own office. Nothing has started moving yet so it's all open. Pros and cons anyone?

 

[ocean 7]

I had an amazing fancy office or room which I think was on a licence and not a lease. This meant that all my electricity, cleaning etc was included in the costs. I only had to pay for my phone line. There is a degree of flexibility as you can give a months notice, but so can they too. I also could access photocopying machine, etc and they were good informing me if i had any clients. All very professional.

Inland Revenue provide info on staff etc and you can get stuff downloaded now! Talk to business link as they were a great help too. One bit of advice, staff contracts! Make sure it's air tight and you offer employment on an provisional basis, every six months or less! Until you get to know them and how they work i.e. if they can't do the job or mess you around you can get rid!

 

[AdamJ]

If you think you may grow again in the next couple of years you may want to consider getting a bigger office than you need now - it saves having to tell all your customers about a change of address again shortly after moving the business away from the house. However, make sure, if you have a long contract, that there is a break clause in it if you find you don't need the space.

E.g. We took on a building with three rooms but at the moment there's only two of us, and we're hardly ever there. However I would hope that in another 12 months or so there will be at least 4 based from there, and you never know, maybe six or seven by 2010. The lease is a 6 year lease with a break option at 3 years so if by 2010 its not worked out we can cut and run, but if it does work out we don't need to move the business again to expand.

Downside is - increased costs while you are growing which could slow you down and technically is an unnecessary expense.

 

[Pab]

Thanks guys - some very useful advice.

AdamJ, what you've done is exactly what I'm thinking of doing... get an office on lease/licence that gives us the capacity to grow.

How did you go about getting your office? Is the best way to go through a commercial estate agent?

 

[katewaugh]

Hi Pab

I totally agree with Boxby about joining the FSB - the FSB man who came to talk to me about membership had saved me money on my business rates before he even left my office!

I found my little business unit via officebroker.com. I have a lease, and one thing I got caught out by was having to pay my landlord's solicitors fees - very very annoying, so always check out various fees you might have to pay.

Business Link very useful for lots of things. I'm not employing anyone at the moment, but have recruited and managed a lot of people in a former life, and my biggest tip would be that you should really plan your interview process carefully to weed out the potential nightmare staff, and delve further into references and anything on their CVs or application forms that worries you.

Good luck, and well done for having done so well thus far!

Kate

 

[deniser]

Hi Pab

I have a lease, and one thing I got caught out by was having to pay my landlord's solicitors fees
Kate

Some tips of mine in connection with taking a lease (not applicable to serviced offices):

1. When you make your offer for the premises do it in writing (subject to contract) and say you will not pay the landlord's fees but that each party will pay their own. Landlords will usually agree to it and it hasn't been standard practice for tenants to pay Landlord's fees since the late 1980s!
2. Remember that all the terms are negotiable including the term and rent
3. Put in a break clause so that you can leave with no ongoing liability if things don't turn out right
4. If you need a change of use make the offer conditional on that change of use being obtained by the landlord
5. If you want to carry out alterations, get them approved before you conclude the lease, that way a. you know you can do them and b. you won't have to pay the landlord's costs as it will be part and parcel of 1.above
6. Have a building survey - it needn't cost lost of money and a walk through will probably suffice because, regardless of the condition you take the property in a. you will be required to hand it back in good condition and b. you will have to pay a share of the repair (and possibly renewal) costs of the building as a whole. If there is dry rot or the roof needs replacing then you need to know about these costs before you sign up and negotiate accordingly.
7. If you are not au fait with commercial leases then possibly get a surveyor or solicitor to negotiate the terms for you. You should be able to save a lot of money in the long run. Once the deal is done it will be too late to backtrack on fundamental points which you may not even have been aware of before making the offer.
8. Make sure you know the difference between a lease which is "inside the Act" which has security of tenure and a lease "outside the Act" which doesn't and as a tenant when making the offer consider demanding it is inside the Act meaning that you have the right to renew when it expires or get some compensation if not. It would be awful if business is doing really well and location dependent and you were forced to go at the expiry of the lease.

There are hundreds of other points but these are just a few of the important ones.

Hope it helps. Good luck!

 

[katewaugh]

Wish I'd known the thing about landlords's fees a couple of months ago! I did consider having a go about it, but didn't feel confident enough!

 

[deniser]

Estate agents try it on every time.........

 

[katewaugh]

I'll remember that in future!

 

[Pab]

Some great advice guys, thank you (and thanks for the list deniser).

I'll certainly be looking into the FSB and I'll get our solicitor to look over anything before we commit.

Paul

 

[dp0848]

Pab,

Do give serious consideration to a serviced office. Serviced offices are easy. One bill each month to cover everything bar the cost of phone calls. Deal with just one supplier instead of several in a leased office (landlord, electricity, phone company, cleaners etc.). When something goes wrong with the office it is the providers problem not yours, one phone call and someone else will deal with it. All of this leaves you more time to concentrate of your own business.

In terms of expansion most serviced office places will allow you to move within the building so you can start with a small office and move to a larger one in the same building (no change of address and telephone numbers) when the growth of your business dictates it.

Regards.

David.

 

[Pab]

Nothing has been ruled out. This is just a fact finding exercise so that I'm better informed when we take the imminent next step .

I can certainly see the benefits of serviced offices - what are the downsides, in your opinion?

 

[dp0848]

Pab,

I'm struggling to think of a down side for serviced offices. I guess one problem is that when the time comes for you to move to a bigger office in the same building if one is not available then you have a problem.

 

[Pab]

Food for thought. I'll look into it more detail.

Thanks all for your help and advice.

Paul

 

[AdamJ]

How did you go about getting your office? Is the best way to go through a commercial estate agent?

We just hunted around Google for offices to let in the Tewkesbury area. We found one through an estate agent but were unimpressed with it then my good lady wife had the genuis idea of doing a search for office + country estate. That threw up a new barn conversion on a private agricultural estate which was exactly what we wanted.

 

[KidsBeeHappy]

We just hunted around Google for offices to let in the Tewkesbury area. We found one through an estate agent but were unimpressed with it then my good lady wife had the genuis idea of doing a search for office + country estate. That threw up a new barn conversion on a private agricultural estate which was exactly what we wanted.

We did this, and it worked out extra well because the rates were all included in the rent!!

 

[AdamJ]

Ditto, except by talking to the landlord direct we got £3k off the annual rent as they want to encourage local businesses in their village.