Short term leases are gems for business start-ups. Traditional office leases tend to refer to a short-term lease as anything from one year to five years, sometimes even ten years.
With flexible shared workspaces, short term leases can start from one month to twelve months. And they can be scaled to grow with your business. As an example, provided the facilities have the space, you could start with a small office for a team of two to three, expand to a bigger office in the second or third year, potentially growing to rent an entire floor.
The draws of coworking spaces
Lower overheads than conventional offices
This does depend on the lease terms. Some shared workspaces are fully-serviced, meaning for the one monthly or weekly fee, numerous services are included. These can range from high-speed internet, cleaning services, café area, meeting rooms, telephone answering services, and all the office equipment you’d traditionally have to buy to furnish an office can also be rented within the lease.
A higher degree of flexibility with the lease terms
Shared office spaces are based on memberships. They can offer more flexibility in the lease terms than you could achieve with a conventional lease. The biggest draw for early startups is the ability to rent amenities on an ad-hoc basis. As an example, leasing a traditional office space would require it to be used every day. With remote working on the rise, more contractors and even employees are working from home. In businesses that require in-person meetups, either with teams or with clients, a meeting room, or conference room can be booked when needed.
Moreover, the lease terms on shared workspaces are shorter than conventional leases. To rent an office, the lease terms are in the years. Coworking spaces have lease terms from one month to twelve months. The lower cost commitment is an advantage to startup businesses.
Make better use of existing profits
The cost of financing an office space cannot be underestimated. The cost of cleaning, energy, maintenance, and in particular in today’s digital era, maintaining an IT infrastructure. Some of the biggest operators in commercial serviced offices focus on providing robust internet connections and ensuring the IT infrastructure is supported for their clients to focus on growing their businesses rather be held back by the lack of IT resources.
In essence, what these managed office buildings are providing are fully operational offices on a pay-as-you-need basis. It makes budgeting far easier.
Tax Deductible? – Possibly
Office space is a tax-deductible business expense. So are travel expenses too though. How your expenses are calculated depends on how you use the office space, or more precisely, how often you use it.
If you use it as your main office location (where you spend most of your working time), you can only claim the office costs. Not the travel expenses to and from the office location.
If, on the other hand, you work mostly remotely from home, opting to hot desk once weekly in the city (as an example), paying a daily rate for the office space, you would be able to claim the business expense of the office spaces daily rate, plus the travel to the office provided it is occasional use because it is not classed as your main place of work.