How Landlords Really Treat a Small Business in New York
By Al Berrios

Nothing says official like having an office. When you make that decision to strike out on your own, the first thing you "need" is an office. But when you're on your own and do the math, you realize that an office isn't as important as paying your mortgage, buying food, and just getting your internet and phone access up and running.

For the last three years, I've operated out of renovated space in my home. It comfortably accommodates up to 10 staff (on rotating schedules) and a library I'm very proud of. We have a network, kitchen and bathroom, and have done some pretty amazing work for clients from the space. I've settled, maybe a little too much, with my security measures and "way of doing things".

But when we were fortunate enough to land several accounts in the same month, I realized that this was one of those golden opportunities to bring in some fresh blood into my firm and "shake things up" before my "way of doing things" became a major obstacle to growth.

The problem with being a small consultancy is that no engagement lasts long enough to support annual rent, let alone some of those 10-year leases NYC landlords love. So, the most obvious answer was temporary office space, which comes with technology, services and furniture and a lease so flexible, it's too perfect for small consulting firms.

But then there's typically the clients' perception of your business - are you big enough to handle their problems? Well, what does an office have to do with how smart my people and I are? In the end, you'll get the same results, because an office isn't about the client, it's about the employees. If they can work comfortably at a convenient location, then the office is meeting its purpose. After all, clients can be met anywhere, but work is optimally done in an environment with resources.

Before checking out offices, I thought of asking partners and acquaintances about allowing my team and I to use any available space they had for some nominal fee. However, nothing materialized. I think what ultimately initiated my willingness to start searching for space was my desire to avoid stepping on toes in someone else's office. That lack of flexibility in how my people and I act in our space wasn't worth saving a few bucks.

Anyway, I visited several temporary locations Thursday morning, decided Thursday evening, signed a lease on Sunday (as soon as I returned from a three day conference in South Jersey) and moved in on a Monday, Tuesday, and Wednesday of last week (pheuw!). No phones, just internet access. Tight schedule, yes, but what's the big deal - it's temporary. If I find something better, there's no commitment. And with regards to moving, I'm basically moving desktops, laptops, and some files, all doable by car, in one day, and without additional fees, which the temp-office folks were clearly peeved about since they couldn't make extra money from me and I kept attacking them for breaks here and there.

This got me seriously thinking about something I hadn't anticipated - office politics. Yes, I'm a paying client and politics are whatever I want them to be. However, I'm not a major client, and sharing the office with various other tenants. From my experience, I know that the strength of your relationships with staff personnel can help or hinder your business, but what if the staff are your vendors, and their client management skills stink? I resorted to having my liaison meet with me and my managers about the topic, and my concerns were alleviated. (You gotta understand, after 3 years in an environment of my own creation, this sort of transaction brought up all sorts of issues I wasn't sure of. Included were cleaning and theft concerns, employee access when I'm not around, the convenience of having my library available when I needed it, since I left it behind in my original space.)

So, the transaction and move went off without a hitch, and then came those unexpected peeves you only realize after the fact. Like horrible reception for my mobile phone service, which ultimately forced me to get phone lines (my leg's still intact, but forgive me if I can't shake your hand); lights that didn't work, which I notified immediately to avoid having my new landlords take it out of my security deposit; and of course, insurance.

Insurance is such a wonderful business. I can't think of any other industry where everyone hates the product, but buys it anyway. Insurance for my business is normal, to safeguard against bad advice. But now, my landlords "remind" me that without office insurance, I can't stay. Of course, I was going to address this, but imagine you're in my place - calling on prospects, replying to RFPs, managing current accounts, interviewing candidates, managing current staff, making sure my technology is working properly… and now, I need someone to pay my bills, manage my books, and secure insurance. Is it any wonder most new business fail within the first couple of years? It's enough to make you want to return to grunt-hood.

Combined with my rent, security deposit, and increased payroll, this transaction was turning out to be bigger than I planned for. But, if you made it this far, you're not going to allow something like unexpected costs stop you. Neither did I. I only do business with vendors with one goal - lowest possible payments for everything - so I wasn't in such bad shape. My temp-office liaison was wonderful in her breaks for my firm; my "recruitment network" got me tons of affordable candidates for all my associate openings; and my technology buying approach (one to two new machines per every new engagement; no landlines, just wireless; self-taught technology troubleshooting) kept my overhead manageable. I networked my office to maximize the number of machines with internet access; I invited other consultants to consider moving into some spare room I created to share rent; re-jiggered my schedule to do more work in less time; and I worked out special deferred compensation with my staff to extend my buying power. That's why I'm a consultant - I solve problems. If I couldn't solve this, I shouldn't be talking to anyone.

Anyway, here I am, typing this from my new desk (expansive by my former standards), and staring out my view (magnificent by my former standards) of midtown west. All tour requests welcome.


Disclaimer: The recommendations, commentary and opinions published herein are based on public information sometimes referenced via hyperlinks. Any similarities or likeness to any ideas or commentary from any other sources not referenced is purely coincidental. al berrios & co. cannot control any results occurring from advice obtained from this publication nor any opinion(s) conveyed by any reader of this publication.

(c) 2001-2005. All Rights Reserved. al berrios & company, inc. Published by al berrios & co. This Report may not be reproduced or redistributed in any form without written permission from al berrios & co., subject to penalty.


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