When do you need an office?

Judging by the way things seem to be trending on WSO, startups are the ideal exit opp for more and more people in finance. With the accessibility of the internet and the countless ways to monetize seemingly simple ideas, it has never been easier to strike out on your own. Obviously starting your own version of Instagram is a hell of a lot easier than actually making money at it but the opportunity is there.

On a related note, I have started to notice more and more advertisements for firms offering either Virtual Offices, online meeting spaces such as GoToMeeting , and made to order offices such as Regus complete with a Secretary (banging you is probably a negotiable add on). This got me thinking about all of the one and two-man start ups that a lot of us aspire to be a part of one day.

So Monkeys, when do you actually need an office?

Having a place to meet clients or potential investors certainly can't hurt but the intial expense could be viewed as unnecessary.

For Aspiring Business Owners
Have you thought about this? How do you plan to approach it?

For PE, VC and Other Investors
Does it even matter?

There is clearly a market for these types of services but I don't know if a start up is it.

Would love to hear any insights you guys would be willing to offer.

 

I would definitely consider renting space at a communal office if I met clients in person, but since all interaction is done online I usually work at home or lately a lot of time at the the nearby Starbucks (they're even nicer down here in Buenos Aires). I can bring my own lunch, stay as long as I want, there's always some nice local eye candy if I get bored, dependable wifi, comfy chairs, and the coffee isn't bad (and the only place in town to get an American "Grande" size :)

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Best Response

My opinion, from having watched my 22 year old (at the time he started) friend build up a company from scratch in 3 years (not tech but still a start-up/ ZERO OUTSIDE FUNDING). Sales are expected to be this year between $8-10m. And also working in a lower middle market PE firm (you get to see a lot of smaller companies)

Having an office at the start up stage is a luxury not a necessity, people should be more focused on the product and clients rather than worrying about setting up an office and the headaches that come along with it. Nothing disappoints me more than someone who wants to start a company and his biggest worry is what name or logo or office he/she is gonna have, these are petty things in which you should not waste your two most valuable resources time/money.

My friend operated one year from a room in his parents house selling over 1m without even considering an office. Hence he was able to self fund the business and make a profit from day 1

How many years did warren buffet operate out of his house?

In the end you will need an office once you need to hire professional staff which will need to be there in the day to day and only if its absolutely necessary. A investor is definitely going to look down at an unnecessary office ! especially if his money is going to be paying for it...just my 2 cents

Having said that there could be instances where an office might be necessary from the start but 99.99% of times it wont be; at least not on day 1.

 
suchislife:
My opinion, from having watched my 22 year old (at the time he started) friend build up a company from scratch in 3 years (not tech but still a start-up/ ZERO OUTSIDE FUNDING). Sales are expected to be this year between $8-10m. And also working in a lower middle market PE firm (you get to see a lot of smaller companies)

Having an office at the start up stage is a luxury not a necessity, people should be more focused on the product and clients rather than worrying about setting up an office and the headaches that come along with it. Nothing disappoints me more than someone who wants to start a company and his biggest worry is what name or logo or office he/she is gonna have, these are petty things in which you should not waste your two most valuable resources time/money.

My friend operated one year from a room in his parents house selling over 1m without even considering an office. Hence he was able to self fund the business and make a profit from day 1

How many years did warren buffet operate out of his house?

In the end you will need an office once you need to hire professional staff which will need to be there in the day to day and only if its absolutely necessary. A investor is definitely going to look down at an unnecessary office ! especially if his money is going to be paying for it...just my 2 cents

Having said that there could be instances where an office might be necessary from the start but 99.99% of times it wont be; at least not on day 1.

What in the world does he do?

The answer to your question is 1) network 2) get involved 3) beef up your resume 4) repeat -happypantsmcgee WSO is not your personal search function.
 
suchislife:
Outsources manufacturing of consumables to china/latam/usa factories (Toilet paper, paper towels, plastic bags, plastic plates, plastic cutlery) self brands them and then distributes/sells them to local retailers

sounds like what i do. but with different products. i am surrounded by startups everyday. these IT, tech, startups that offer the world and sound damn sexy. but in the end of the day. there are many 'entrepreneurial endeavors' that nobody knows what the hell you're doing about, NOT SEXY to say the least... but it makes money

 
bigthinker:
suchislife:
Outsources manufacturing of consumables to china/latam/usa factories (Toilet paper, paper towels, plastic bags, plastic plates, plastic cutlery) self brands them and then distributes/sells them to local retailers

sounds like what i do. but with different products. i am surrounded by startups everyday. these IT, tech, startups that offer the world and sound damn sexy. but in the end of the day. there are many 'entrepreneurial endeavors' that nobody knows what the hell you're doing about, NOT SEXY to say the least... but it makes money

I agree with you 100%.

 

I noticed a trend in co-work space but it tends to be by invitation and to Technology start-ups. It would include a dedicated work space and shared meeting rooms, kitchen, etc. Pretty good idea but I wish they were more open with the type of start-ups that can be members.

I am finding it hard to work in coffee shops only because it is a little embarrassing and distracting answering client calls when there is music playing in the background.

 

Maybe its just me, but work/ play separation is very important. I could never imagine doing my work in the same place where I sat around on my ass. Thats why in UG i did 100% of my work at the library. I had a lot of friends who liked to round up groups and then go but then all they'd do was dick around there. I would go by myself and sit in absurd spots- cuz quite frankly if I didnt have work to do I wouldn't have went, lol. Then again the library was free and office space wouldn't be, so as far as the original question I'd say once you have enough work to justify the cost of work/ play separation (~5 hrs a day maybe?).

GBS
 
GoldmanBallSachs:
Maybe its just me, but work/ pla separation is very important. I could never imagine doing my work in the same place where I sat around on my ass. Thats why in UG i did 100% of my work at the library. I had a lot of friends who liked to round up groups and then go but then all they'd do was dick around there. I would go by myself and sit in absurd spots- cuz quite frankly if I didnt have work to do I wouldn't have went, lol. Then again the library was free and office space wouldn't be, so as far as the original question I'd say once you have enough work to justify the cost of work/ play separation (~5 hrs a day maybe?).

feel the same way. i had 0 productivity in college. (if i'm in the dorms or where i stay). most of my work got done in the library or a 'designated workstation'. u go there. u got your work done, then you leave. going with friends helps, but you got to sit apart from eyach other and work on your own. but within the vicinity of each other to keep one another from fbing, etc.

that is why now i have rented an office. but its too expensive, so i started with a 'coworking space' first instead. pretty nice, and can also meet other business people/startups, and events geared toward the entrepreneurial community. (how to raise capital 101, angel investors coming to the space, etc)

 

I think IP raises a good point about being productive. I think you need an office in the sense of a working space. If it's in your house fine, but I think it's important to have a separated room for work as opposed to your bedroom or living room. As for meeting clients in the initial stages I think you still don't need an office. You can use restaurants, coffee shops or hotels.

 

WSO still has no office but our team is growing...the thing is, how am I going to have a physical space when...

I'm in Boston Sales Manager in Argentina Job Board Manager and Company Database Manager in New York COO (Andy) in Argentina 2 Web Developers in Brazil 1 IT / server guy in Canada Writers in NY, Paris, Chicago, Singapore, Philly, etc... VA in Phillipines...

Point is, unless I started hiring local, what is the point of me having an office. I've been able to be productive wihtout one for so long, and I just moved into a new apt that will have dedicated office space, so should make it even easier.

I'm very anti-office unless you have a team of 4+ in the same city....them some cheap space could be worth it.

 

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