If you are researching the market for a fully serviced office space solution (ie, executive suite, key man space, office business center), you may be confused by the overwhelming amount of information in the marketplace. It is difficult to compare providers against each other because we often use different pricing models and terminology.
As I’ve written in previous blogs, in order to compare “apples to apples” you first must determine the Total Contract Value . This is the total amount you will have paid by the end of the contract term and includes the monthly fixed fees, kitchen/beverage fees, set-up fees, refundable retainer, business continuity fees and office refurbishment fees.
It is also essential to make sure the size of the office, the length of the agreement and whether the space is with- or without windows in order to make a fair comparison.
The Fine Print
Once you have a clear understanding of the essential information above, it’s time to take a look at the fine print on the Service Contract.
1. Are there any additional or hidden fees?
Serviced office space providers may also have other attachments or addendums to their office contract that outline specific “Office Policies or Rules” associated with securing an office.
These “Office Policies or Rules” should be easy to understand and not used to hide any fees or exorbitant rate increases. If a provider has “Office Policies or Rules” make sure you read them thoroughly before signing your contract. Remember that a Service Contract is a legally enforceable contract and you will be obligated for the monies and fees outlined in this document – even if they are difficult to understand.
In order to protect yourself, read these documents and have them explained to you.
2. Is there an “early out” clause if you need to terminate early, and is it in writing?
One of the really big benefits of serviced offices is the flexibility in the contract lengths. Some will be as short as “month to month” depending on the client needs. In the event you enter into a longer term contract but need to exit early due to circumstances unforeseen, make sure you understand, in writing, the “opt out” terms (if any), especially if you are signing a term that is six months or longer.
3. Will my agreement automatically renew?
Automating certain tasks in today’s world is a convenience we all enjoy. Payments and contract renewals are two things we all commonly put on automatic because it is convenient. Most serviced office providers will set up your Service Contract with an automatic renewal.
Be careful, however, that you don’t commit to an office at a heavily discounted rate only to have your agreement auto-renew at a significant increase.
4. If I choose to renew at the end of my contract term, what will that rate be?
We touched on this problem in the answer above but people forget about this one often and I feel it merits its own question. Be careful of large rent increases at renewal time, especially if you get a special introductory offer. Specials deals like “free rent” can bring down the up-front cost of moving into an executive suite office provider – which is great! But you need to make sure that you aren’t exposed to astronomical rate increases when your contract renews.
One Final Piece Of Information…
What is the Service Provider’s rating with the Better Business Bureau and other 3rd party ratings agencies?
This advice holds true no matter what businesses you are comparing; it doesn’t need to be office space. Many companies are great at the Sales and Marketing, but what are their customers saying after the sale?
It always surprises me when I find out that people don’t look at these listings before making a significant contract decision. If I am going to sign a contract with an organization, I need to know that they are up front and willing to hold up their end of the bargain. The easiest way you can find out is with a quick search with the Better Business Bureau and other ratings websites.
This due diligence might add some time and energy to your search for office space but it will make your office experience so much more pleasant. No one likes to get hit with a bunch of “gotcha’s”. Take your time and do your research before you sign on the dotted line.
If you need some assistance making sure you are comparing apples-to-apples when you are looking at two or more facilities, we will be happy to help. You can always stop by our offices or contact me, Dave Taylor, the owner of YourOffice-Ballantyne or Ellen Spellman, our General Manager.
It will be our pleasure to assist you!