I think, team first. It allows me to succeed, it allows my team to succeed.
—LeBron James, NBA champion
One of the most costly mistakes I have made as an entrepreneur is to rent high-end office space, thinking that it would foster growth through increased productivity and project a more professional image. It did none of these. In fact, all it did was increase operating expenses and precipitate a drop in profits.
My company’s culture started out quite differently from that of a traditional corporation, yet I felt the need to emulate a more corporate culture. Boy, was I wrong! As any veteran entrepreneur will tell you, the culture you start with will probably be the culture you end up with. Trying to get employees and staff to adopt a more rigid culture after years of having a relaxed culture is quite difficult. I learned the hard way. I ignored the fact that my staff enjoyed their flexibility and start-up identity. They resented the idea of having to come to the office at new mandatory times to do their work. Most of them worked for me because they were excellent team members and didn’t need supervision or micromanagement. They were motivated to perform and to deliver in large part because of the flexibility our company afforded them. And they believed in what we were doing.
After the move to the new, plush office and the change to the culture, many employees became less productive. For instance, workers who were normally great in the morning now had morning commutes. Some of their commutes were one hour each way. Consequently, reports and important documents would arrive later in the day. Also, our meeting schedules changed, as we now adjusted times to accommodate traffic patterns. Based on what we were used to, the scheduling became a bit ridiculous. These are just a few changes that caused productivity to drop and anxiety to increase.
I also thought that having a nice office would project a more professional image and attract more prestigious clients. That didn’t necessarily happen either. While clients would compliment our wonderful facilities and impressive skyline views of Buckhead, they were still most concerned with the quality of our products and services. Ultimately, that was most important to them.
Nowadays, having an office seems to be out of style. Not only is it not cool, but it is not smart in a slow economy if you don’t need it. Because of this trend, there are now so many virtual office options. Regus, one of the largest of these virtual companies, gives you several options, ranging from a traditional corporate office to a mere mailbox with a physical address. A customer of Regus can have a physical address in over 1,500 different locations around the world; some of these addresses are quite prestigious. You can also have someone answer your calls or your staff’s calls and route them to wherever you want. In other words, you can give the impression of having a full-fledged, multinational company when in fact you just have a clever façade.
Acquiring office space should always be justified by how it will improve your business and raise your profits. Office space is a luxury, not a necessity. I suggest that you adequately weigh the pros and cons. Most entrepreneurs, especially new ones, find more cons than pros. Save the money you would invest in office space to finance things that get you a solid return. Certainly, don’t do what I did and jeopardize losing a great team to simply upgrade an office.