Traditional Lease vs. Flexible Workplace: Which is the Better Option?

Office space and its maintenance is one of the largest costs for most of the businesses after the employees’ salaries. With the wide variety of choices available today, the type of office space you choose and the ability to scale it up and down at certain times, presents a crucial business decision. Here are a few major differences between choosing traditional leasing and serviced office space that help you choose the one that suits you the best.

Traditional Leasing

Generally, the business owners get attracted to traditional lease because of the ability to customize the office space and also the security of a long term lease, so that they don’t have to keep changing the location often. But hidden costs of occupancy can add up and be a burden sometimes.

Other than the common things the business owners think of (like utilities, cleaning, IT facilities, security and FM), there are lots of other things like plant replacement, cost of the printer’s ink and other general upgrades. It can be clearly seen that how it impacts the cash flow making it more complicated.

Sometimes securing an ideal lease space can be highly time consuming and costly; you will have to source lawyers and agents for that to name a few. And the time required for other processes like design configurations, viewings and negotiations with the suppliers goes without saying.

Finding an optimal space for a long-term is not an exact science. Firms grow and so does the contract; it’s the nature of businesses. With the leased space, you will not be having the luxury of flexing the space up and down. Here the empty spaces are not just the extra cost to the business, but it can also affect the team morale.

Flexible Workplace

For those with smaller projects and smaller businesses, flexible solutions like co-working space and serviced office offers a financially secure and sensible place to work for a short term. One main advantage of flexible work space is that, the monthly rental is the total occupancy cost.

It’s quite easy to procure a flexible co-working space for a business when compared to the traditional lease. And the best thing is that, the procurement process doesn’t even cost you a penny, as you don’t have to worry about the lawyer’s fee, fit-outs or the agents. All that you need to do is getting the agreement signed and occupying the space.

With flexible work spaces, you don’t have to worry about unused spaces, as you just pay for the space you use. If you find that the space is going wasted, you can always bring in a few temporary people who need a space to work for few months. Flexible workspace allows you to do it easily without worrying about the cash flow.

Below mentioned are some costs associated with traditional leasing which can be avoided by opting flexible office space.

• Furniture and fit-out: It’s clearly based on the level of work required and the specification. This will typically stand between Rs.2000 and Rs.4000 per sq. ft.

• Business rates: Business rates vary dramatically based on the size of the business and location. But majority of the serviced offices include the business rates in the price of monthly rental, and it can save you lots of money.

• Service charge: Next comes the service charge; it includes electricity, security, cleaning, management fees, etc.

Along with all the above mentioned outlays, the business owners will also have to spend enough time on negotiating the contracts and also to take care of the services like cleaning and maintenance. Ultimately it’s the choice of business owners to select the type of office space they need; they need to thoroughly analyse the pros and cons of the space, and decide wisely, as it plays a very important role in the success of a business

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