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Home or professional office?

I run a small but growing company in California doing consulting for software programming, web design, e-commerce, etc.  Currently, I am working with 1-2 other employees and we all telecommute.  I was considering getting a professional office for us downtown somewhere, but wanted to know if the benefits outweighed the risks.  We usually work with clients out of state or too far to travel to, but occasionally clients do visit my home and it seems very unprofessional.  We make a pretty good profit, so I don't think money is an issue at this point (well depending on the rent of the office space of course, I was thinking maybe 300-400 a month?).

Does anyone here have their own business like I do and works out of home or in a professional office (besides Joel...)?  What's the best way to go?

Janek
Friday, July 30, 2004

"300-400"


In California?  Are you sure you live there?

Bicuspix
Friday, July 30, 2004

If it's just for the occasional customer-comes-to-my-place thing and your team works fine the way it is, save the rent and get a nice room from an office-service (not sure about the right English word) just when you need it.

Just an idea, might not be the best solution, though.

Stefan

Stefan
Friday, July 30, 2004

Yeah, I've seen office space for 300-400 dollars for 1-2 developers.  This is downtown Sacramento, mind you, where the rent isn't too bad (yet)..

Janek
Friday, July 30, 2004

"300-400"

Yeah, I was gonna ask the same thing...300-400 seems awfully cheap for California. I live in the Dallas area where rents are pretty low and I can't even find a closet for $300-400/month.

As to your question...I also work out of my house, but as my consulting business has grown I've been forced to consider moving into an office. I enjoy working out of the house and it's certainly cheaper, but I'll be hiring someone soon and so I'll be moving into an office.

Mark Hoffman
Friday, July 30, 2004

Mark, that sounds good.  It's not so much that I want to get a professional office for the "occasional" client, but I want to be able to physically work with my other employees, not having to rely on IM or phone.  Also, having a professional office when clients call and ask where they can meet you totally makes them trust you more as far I see it..

Janek
Friday, July 30, 2004

Speaking about that whole consulting thing - how did you guys start consulting? I mean, this won't get me out of the responsibility to actually WORK, but I could imagine, consulting is something I can use my talents at.

So, just how did you start and what were your first jobs?

Stefan

Stefan
Friday, July 30, 2004

Stefan:

I put an ad in the yellow pages for my business when I first started out.  I also advertise on CraigsList, Google Adwords, etc, and of course networking with family members and who they know, etc.  Perhaps the word "consulting" doesn't apply to my business anymore, since we are a full-service business doing web design, server scripting, software programming, etc.

So in a nutshell, try to fill a need first and then ask around to people who might need that need :)

Janek
Friday, July 30, 2004

Stefan,

My consulting business started when I was working for someone else and people kept calling me saying "Hey, Joe Blow referred me to you and I need some software..."

Eventually, my consulting work took more of my time so I left my regular job. I was enormously fortunate that many of these clients had large, long term projects. They have provided a steady base of revenue while I grow the business.

So, having a good network of people you know (oh, and a good reputation as a problem solver!) is really key. That, plus lots of luck. :')

Mark Hoffman
Friday, July 30, 2004

I prefer working from home. My boss tends to meet clients in a restaurant, with a laptop if necessary. His boss doesn't have an office either: meets clients on his yacht, or in Hawaii.

name witheld
Friday, July 30, 2004

New business incubators have facilities such as this. You share an office space and a receptionist and the phones which are redirected to home most of the time. 4 or 5 startups can occupy a small suite of offices, conference room, etc.

Most of these incubators are attached to universities and many of them require that you be a graduate of theirs or in some other way affilliated, like Profs. There are some rust-belt cities that have incubators of their own in an attempt to spawn new business growth, but they're generally more difficult to deal with and become politcal footballs.

But in any case 300-400 a month ain't going to cut it even with those arrangements. You might also look for some local small business like an insurance underwriter or travel agency that will sub-lease some office space if they have an excess. Making it appear like your own can be a problem there.

old_timer
Friday, July 30, 2004

Got kids?

It's possible to work from home with children and even gain & maintain a professional image if you manage the phone thing.

Line 1  home / fax
Line 2  "office"/DSL

Keep teenagers away from Line 2, in or outgoing. 

trollop
Friday, July 30, 2004

Check out Regus offices, they have a shared office concept and also support part time use. They have a location in Sacremento and it sounds like they would fit your needs. The company I work for in Toronto uses them and they provide great facilities. Another benefit is because they have so many locations, if you need a meeting room in a different city like LA for a client they can provide one.

http://www.regus.com/

Gerald
Friday, July 30, 2004

I'd have to agree with most everybody else. $300 to 400 will buy you a cube. That's it. 10 x 10 if you're lucky.

We were in the same boat when we started. The telecommute thing worked for about the first 2, maybe 2 and a half years -- until we started growing. Once there were enough of us, it was a pain in the arse.

What we did: We bought our office. It's a small 3-bedroom house. Well, it was a house at some time back in the 1950s. It's been converted to office space.

We struggled long and hard with the "rent/lease -vs- buy" decision. Rent/lease is better from the standpoint that it can be short-term, maintenance and whatnot is taken care of by the landlord/management company.

Cost was why we bought. It cost us about 45% on a month-to-month baseis -- 45% of what we could lease similar space for at a decent office complex. We get a tax benefit in "phantom" losses on the depreciation of building, and we're building equity.  It does have its downsides -- we had to put a new roof on last year and next year we're looking at resurfacing the parking lot next year. When you add in all those "unplanned" type expenses, it still costs us far less -- maybe 60% of what we'd be spending on lease for the same space.

FYI -- it's costing us a bit under 2K a month -- that's mortgage, insurance, tax, utilities (electric, water, etc), expense (like the roof, parking lot, etc). This is in rural Ohio. The same space at a decent office complex in our area would go for about $3300 to $3500 a month.

We've been here for 4 years now, and we make an extra payment each quarter. We're on a 15 year mortgage, so the equity is building rather quickly, especially with the extra payments. If we stay another 7 years, it's paid for and we'll have free rent, plus we'll have the equity in the place as an asset for the company.

I imagine you're really kidding yourself, especially in California, if you think three to four hundred a month is going to do it. Ours is working out to three to four hundred a month *per employee*, and we're in rural OH -- you're in a high-rent district: CA.

Sgt. Sausage
Friday, July 30, 2004

What part of CA are you in?

I'm in Central Cali, and $300 - $400 will get you a single office in a suite of offices here.  I have seen 1000 sq ft. suites with 3 offices, plus reception area and conference room for $750 and up.

When I lived on the coast, it was much, much higher.

www.ChristopherHawkins.com
Friday, July 30, 2004


Have you considered adding a pseudo-professional office onto your house?

Something that has a definitely personal touch, but clearly delineated from the rest of the house?

KC
Friday, July 30, 2004

If customers come to visit you (instead of your going to their place, in which problem solved), and it's only very occasional, there's probably some hotel in the area that rents small conference rooms that you could rent. That's why my dad did in the past before he bought his office.

Fred
Friday, July 30, 2004

Janek,

What exactly and where in CA can you rent for $400? I am very, very interested.

www.alexlechuck.com
Friday, July 30, 2004

California is a big state. About the size of Germany. There are cheap areas (still) but the desirable areas near the big cities are expensive.

I just drove through Lodi last weekend and it looked like it would be pretty cheap there.

MilesArcher
Friday, July 30, 2004

"but I want to be able to physically work with my other employees"

Why?

Find a "virtual office" as mentioned previously. They have meeting rooms you can reserve - meet with your employees once every two weeks. If you need to meet with consultants more often than that, either you or they need to go.

Philo

Philo
Friday, July 30, 2004

> We usually work with clients out of state or too far to travel to, but occasionally clients do visit my home and it seems very unprofessional.

If you think it will make a difference in productivity for your staff then get an office so your staff can work face to face. If you need to work together with your clients (and your client's team) in a conference room environment then rent it as you go (hotels and airports all rent them) or get a nice studio where you can fit it in. Just think about what you need. For some it is a cost of doing business, you can't put on a suit but go to the kitchen.

Li-fan Chen
Friday, July 30, 2004

>> Have you considered adding a pseudo-professional office onto your house? <<

Better talk to your accountant before doing this.  There are serious tax implications.  Plus it makes selling your house more difficult.

example
Friday, July 30, 2004

> There are serious tax implications

Tax (and other) laws apply the moment you start a home based business - check with a lawyer, of course, but if there's any sensible set of rules to precisely define the difference between "I happened to build a spare room and it's being used as an office for my home business just now" vs "I explicitly built an office attached to my house but for strictly business use" then I'll be quite impressed.

Still, it's always worth checking what tax deductions are legally available - "serious implications" don't always have to be jail time.  :)

> Plus it makes selling your house more difficult.

...unless you want to sell to someone who thinks that a high quality extra room that can be used for an office, a study, a spare bedroom or any number of other options. If that sounds reasonable, then adding an office (which is different to dropping an ugly pre-fab at a weird angle in the middle of the front yard) may well actually be a good thing to do in terms of property value. Hell, failing to add the office will decrease the value of the property in the eyes of someone who actually would like the extra room.

Having said that, my personal opinion is that building a house with a reasonable likelyhood of spending the next 50 years in it means that constantly obsessing over the resale value is kinda silly - especially when one of the more common property investment strategies (at the moment, where I live) is "knock the house down and build a block of ugly apartment buildings on the site". I wish people would share the crystal ball they use to determine property values for the next 50 years.


Sunday, August 01, 2004

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