theCynch

Though some consider it the “elite” way of running a business, an office location is no longer necessary if you run a digital business (Internet, technology, or programming based).

Not only is it unnecessary, but the added rent can become a serious financial drain.

Using downtown Seattle as an example, let’s see how much I’d be spending if I rented out basic office space:

$1,000/month for 625 sq. ft. of office space
$40/month for gas (since I live 5 miles away from downtown and get 15 mpg)
$196/month for parking
$200/month for non-home cooked meals (if I bought a $10 lunch every workday)

=$1,436/month x 12 = $17,232 per year.

Even if I didn’t use the office space, I’d still have to pay rent. Leases typically last one year, which means I’d have to fork over $12,000 a year on rent, even if I didn’t use it.

Would I rather *feel elite* and put my business on the line by renting out an office, or would I rather save over $12k per year?

I’m leaning towards the latter. I know that I am much better off financially by working out of my home.

Sure, working out of the house may not be as glamorous…but it’s smarter. By defining your home-office space, you can deduct the space from your tax return. It may be the largest business deduction you make!

• If you really need an office for a meeting, consider renting one just for the day or for the week.

I did this once last year and used Premier Business Centers. I rented out their conference room for the afternoon and it cost me about $100.

Although I paid a premium for the short amount of time, I saved thousands in the long run. (The ladies were also really nice!)

• Better business meetings may be had over lunch or dinner.

(I may be inclined to suggest this because of my years in Taiwan and China. Most, if not all business meetings were centered around food and drink.)

The benefit of taking connections to lunch is that they will be more likely to remember the meeting. Food always puts people in a better mood, especially if they’ve been traveling.

The Cynch: If you are just starting out, don’t crazy too fast. Thinking on your feet, financially, may be the extra oomph that makes your startup survive while others fail.

Being smart about where my business is has helped me through the initial two-year startup hump, and has given me more leeway if I’m having a rough month. Not all months are created equally in business–especially if it’s a startup.

Only two-thirds of startups survive the first two years!

• Don’t get crazy too fast.
• Be smart about crimping financial corners and it’ll pay off in the long run.
• Substitute an office with a unique experience to make a lasting impression.

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