We should probably pop a disclaimer up front to say *spoiler alert* there isn’t really a solid figure in answer to this question, it’s a bit like how long is a piece of string.
But… before you click away, we can run you through the 4 main costs you need to be aware of when the time comes to moving offices.
👉 Finding your new office
First and foremost, there’ll be some costs involved with actually finding your new office space, and these vary depending on the type of office you’re after.
💡Deposit // This is usually between 6-12 months rent depending on your business accounts, but if you can demonstrate net profits equating to 3 times the amount of rent for 3 years, then you don’t need to pay a deposit.
💡Finders fee // This is something you may need to pay to your agent or broker, and as a rule of thumb tends to be a % of your first year’s rent. The market standard is 10% based on who you work with, market conditions, and the landlords themselves. Some other ways to charge a fee include a fixed price per sq ft, or a % of savings.
💡Stamp duty // Just like when purchasing a property, stamp duty is something you need to account for when leasing an office. It’s usually a portion of the annual rent, but this handy calculator relays how much you’d expect to pay.
💡Legal fee // On average, this’ll be up to 3% of the annual rent.
💡Business Rates // Not one specifically for the move but more to keep in mind for when you’ve moved, business rates are basically a tax on your office (like council tax), payable by yourself as the tenant, and set by the Valuation Office Agency, rather than your landlord. The amount you pay is based on your property’s hypothetical rental value, not the rent you pay.
💡Deposit // You’ll tend to pay a rent deposit, or the first 1-3 months in advance. This won’t be an extra cost as such, just one you’ll need to plan for upfront.
And… that’s pretty much it. Of course it looks a lot less than a lease, but remember they’re completely different types of offices, where many of the costs associated with leased spaces will be included in the all-in flexible office cost. We’ve got plenty of advice on which type you might want to go for.
👉 Making it look good
You might hear the term fit-out when looking to furnish your new office, and this just means the fixtures, fittings and furnishings associated with your new office. It could mean starting with a blank canvas and turning it into something to move into or just adding a few bits to a pre existing office space to make it more you. We work with a range of design & build companies and traditional architects with years of experience, so we’re always on hand to guide and advise on how you want to style the space.
Fit-outs are *usually* only relevant for leased spaces, but could apply if you’re going for a fully-managed flexible place and want to go above and beyond on spec and design.
Firstly, there’s two main categories to familiarise yourself with:
💡Cat A // The space comes as a blank canvas, typically with raised floors, lighting and services, but you’ll need to do a full fit-out. Just below this you’d have what’s known as shell & core, where a developer leaves the space as a shell and grants an allowance to bring it up to a Cat A, which you could carry out as part of your fit-out works.
As a rough guide, for an average sized space in London you’d be looking at the following:
🥇£100-115 per sq ft
🥈£75-85 per sq ft
🥉£55-65 per sq ft
Another cost factor with a Cat A is that you may get a longer rent-free period than Cat B, simply due to the fact you need to deck it all out.
💡Cat B // Also known as plug & play, Cat B is an advanced fit-out and will include everything like meeting rooms, furniture, any specific lighting, etc.
This usually results in slightly higher rent and less time rent-free, but think of it as paying a premium for the convenience of not having any fit-out costs yourself.
The only additional level within this would be managed, where you’d pay one fee and the landlord would be in charge of sorting out everything like the power, cleaning, etc.
Depending on your desired level of spec, this can be split down even further:
Design & Build // The one where the company takes care of everything - a one-stop shop if you will, with a singular lump cost. A lot of our clients favour this particular option, as you’d usually appoint a Project Manager to help guide the process, too.
Traditional fit-out // The one where an architect designs the space, a contractor builds it out, and a project manager helps to well… project manage! There’s usually higher fees to pay with a traditional fit-out compared to a design & build, as each party will be paid individually.
If you’re still unsure, pop us a message and we can delve into a bit more detail based on your specific needs.
Sometimes the ‘L’ word ignites fear in anyone looking to make a move, after all, there’s usually loads more to consider than you first anticipated.
Furniture, all those mismatched mugs and cutlery, your prized coffee machine, the plants which - reminder - need watering again, and those boxes overflowing with cables we all seem to accumulate but have no clue which piece of tech they belong to.
💡Do it yourself // Similar to a house move, some businesses prefer to save money by tackling all of it themselves. We’ve done this ourselves a few times, rolling office chairs a few streets away in Shoreditch back in the day! The main cost here would be ordering packaging and hiring a van for a couple of hundred pounds, perhaps some sore muscles for a couple of days.
This is a good option if you have a small headcount. If not, any cash you save on the move may not even be valid when taking into account time taken away from the day-to-day, as well as damaged equipment.
💡Hire some help // An alternative is to pay a company to save yourself the hassle. In this scenario all your team will need to do is pack up their stuff and turn up to the new place the next day, but make sure you keep a record of everything in an inventory to avoid any issues down the line.
Again, this is usually only for leased spaces, whereas in flexi offices the majority of furniture is included, so just pack up your laptops, plants - they still need watering - and mugs and you’re good to go.
👉 Returning your existing place
This won’t always be something you need to account for, but if you do, it’s good to remember for the next time you’re looking to move.
💡Leased // Most Cat A spaces will ask you ensure everything is restored to its original condition when you leave, but generally you’d come to a financial agreement to cover any costs of reinstating the works (discussions we can assist with). Cost-wise it comes in around £20 per sq ft, and although wear and tear isn’t usually accounted for, there can be some leeway, although remember this only applies to Cat B.
💡Flexi // Most ‘reasonable’ wear & tear is fine (but definitely check your licence agreement as this isn’t set in stone), so you can pretty much just hand the keys back and it’s onto the next one.
Right - We know that’s a lot to take in but the more detail we go into, the easier it is to start planning or provide information and updates to others within the team. Costs are never set in stone, and there’s also the topic of rent which we haven’t gone into in detail on here, but the above should help as a guide and you know where we are if you need more of a breakdown!