Rent is one of the steepest costs of any business or service. Of all the expenses to cut, rent seems to be the most difficult. However, if you know what to look for and how to negotiate, it’s possible to reduce even this substantial cost.
Rent is often one of the biggest expenses for any business and if you aren’t bringing in enough money to cover everything, it is one of the first things you should look at. Can you reduce your rent? In many cases, it’s possible to cut your expenses, even if you already have an office space rented.
Sublet Part of Your Office
Many office spaces are large and if you’ve recently downsized or aren’t using the entire space as efficiently as you could, it might be possible to rent out some of the extra space. While this isn’t likely to cover all your rent, it can reduce it considerably, often enough to get through the rougher times.
Before you consider subletting, check your lease agreement to make sure it’s not prohibited. You should be able to rent out part of your space without any problems, but it’s always a good idea to clear up any legal issues ahead of time. Once you are certain it’s allowed, run an ad for the space you are willing to rent. It’s best to choose someone or a business that will mesh well with your own.
Move Your Business
Are there cheaper options in your area or in a more suitable area for your business? If so, it may be worth it to move. However, before you do this, consider the impact on your business. Depending on whether your clients come to you or not, moving may cost more than the extra savings in rent.
A plumbing company will have no issues with moving, because its employees go to the clients. No one will miss the location, so it isn’t a problem. However, if you offer walk-in service, keep in mind that you will likely lose some clients in the move, particularly if you are moving to an area they may be less likely to frequent.
Re-negotiate Your Lease
Many companies signed their leases back before the real estate market plummeted and these days, it’s far easier to find low cost rent than it was even three or four years ago. If you prefer to stay where you are, but don’t want to keep paying the pre-drop prices, talk to your landlord about the possibility of dropping the rates.
Of course, if the landlord thinks you’ll stick around even with the higher prices, he probably won’t negotiate, so you should be ready to move if necessary. Another option is to offer the landlord something in return for lowering the rates, such as letting him take back a section of your rental space. If you are renting four rooms, for example, you might negotiate a lower price for just three of the rooms. Take a look around and see what you can do to make the deal worth it for the landlord.
Some landlords are also willing to have a longer term rental agreement in exchange for lower monthly payments, so this is worth checking into if you are serious about dropping the cost of your rent.
Rent a Part-time Office
Not every business needs a full time office. If you are on the road most of the time or work from home part of the week, you might consider joining in with a walk in office. These are offices that allow you to rent them by the hour or buy blocks of time each week. They offer shared meeting rooms, waiting areas and even a joint secretary, with separated work spaces for you to get work done or hold meetings.
If the part-time option doesn’t appeal, you can do something similar by going in with a group to rent an office space between several businesses, sharing the costs of the space and a secretary who will work for everyone. This can be a very cost effective method of starting out and many states now offer joint offices as a part of their small business incubator programs.
Work from Home
In extreme cases, working from home may be your best option for saving on rent. Technically, you can use the rent for a specific office space as a tax write off, so designate a room in your home for work and then use it for that purpose. Your business can even pay you the rent to your personal account, if need be.
While a home office isn’t always the best choice for every business, it can be a good temporary measure when you are getting the business set up or while waiting for a cheaper rental option to open up in a more desirable location.
Rent may be one of the bigger expenses you face, but it can also be greatly reduced when you know where to look. Try re-negotiating or splitting up the cost of your rent. Even a small change to the amount will add up over the years and can be well worth the effort.