When you are researching different executive office suite providers you are going to find that each provider structures their agreement in a unique way. In order to secure the best deal, it is important that you are able understand each agreement and be able to determine the Total Contract Value. The total cost, over the length of the agreement, is only way to compare service providers apples-to-apples.
The total contract value is the sum total of all fees you will be legally required to pay by the end of the contract term. Some providers structure their agreements where your monthly rent covers most fees. Others have structures where you will be obligated to pay significant fees at the end of your contract.
When you are comparing executive office providers be sure to examine your service agreements for the following items. Once you have solid numbers for each of these, you can then do the math to determine the price of a yearlong contract.
Only then, will you be able to compare the providers on equal footing.
Your Monthly Rent or Monthly Fixed Fee
This fee is the amount of money that will constitute the basis of your monthly fee. It is your rent before any additional fees like meeting rooms, making copies or using administrative services. The monthly fixed fee is essentially your rent plus your telephone fees and internet access, as these services comprise the foundation of having executive suite office space.
Some providers, like YourOffice-Ballantyne, will include receptionist service, kitchen amenities and an allowance towards the use of meeting room space in your base monthly fee. Some other providers will offer those as a la carte add-ons. Review your contract to see exactly what your monthly fixed fees will be.
Set Up, Refurbishment & Business Continuity Fees
Every executive suite provider will have some fees at the beginning and ending of your contract. Just like with the monthly fixed fees, you want to compare these fees apples-to-apples. Some executive office space providers like to put their larger fees at the end of a contract because most people won’t worry about them at the beginning of the contract. No one likes to think of leaving their office space as they are moving into it.
Almost all providers will have set up fees to get your internet and telephone service up and running. They may also charge to set up your office and configure the furniture.
Fees that typically happen at the end of a contract include the refurbishment and business continuity fees. The refurbishment fee covers the cost of getting your office back to a rentable condition. The business continuity fee makes sure that your business mail and phone calls are forwarded to your new location. Business continuity services make sure there is no disruption to your business.
One of the key distinctions in the market between executive suite office providers is how they handle fees that occur at the end of your contract. Some providers will use the refurbishment fee and the business continuity fee to move significant portions of your overall payments to the end of your contract.
This serves to make the contract look better at the beginning of your lease. This is why it so critical for you to determine the Total Contract Value of each service agreement that you are reviewing. The Total Contract Value of your agreement is the true cost of renting your executive office space.
Be sure to add up all of the fees – the ones at the beginning of your contract and the ones at the end of your contract – when you are determining the Total Contract Value.
So a sample list of services used to determine your contract value could look like this:
Monthly Telephone & Internet
Reception / Phone Answering Services
One Time Fees:
Initial Set Up Fees
Business Continuity Fee
To determine your Total Contract Value, you need to add your recurring fees and multiply that number by the length of your contract. For easy math in this example, let’s assume the total monthly fees come to $500. Your service agreement is for one year. That puts your total recurring fees at $6000.
Again for easy math purposes, let’s assume your total one time fees are $1,000. Remember to include fees that occur at the beginning AND the end of your contract.
Add the total one time fees to your total recurring fees to get your Total Contract Value. In this example it would be $7,000. This is number you should now use to compare different executive office space providers as this number will ensure you are comparing apples-to-apples.
I hope this article has been informative for you. If you have any questions on how to compare the service agreements of different executive suite office providers, feel free to send me an e-mail, call (704) 944-3200 or stop by the office. We can give you a tour while you’re here!