In London, we see the highest rate of business births in the UK. According to London’s business statistics released late last year, in 2016, London was home to 102,140 new businesses – almost double the next highest region in the UK (South East at 55,960 new businesses). This number is almost certain to grow, as the number of private sector businesses steadily increases year by year in London, and business birth rates across the UK are similarly rising over the past decade.
However, as prevalent as startup businesses are across the UK, many startups do not last in London. The city sees a 41.7 per cent five year survival rate for new businesses (with some variation depending on industry). Startups can fail due to any number of reasons, including problems with funding, staffing, or consumer interest. To combat these rates of survival, it’s important that we do what we can to ensure London’s rich startup environment continues to thrive.
At Hubble, we believe that office space for startups is a crucial element for their growth. Much more than just a space where a team works, the right office space can improve productivity, encourage team growth and cooperation, and open doors to a wider network of like-minded businesses and teams. To help out any startup businesses looking to make a mark, we’ve come up with this list of four crucial elements to consider when you’re picking out the first office space that your team will call home.
Which Location Best Serves Your Startup?
Location is one of the most basic considerations for any business, but that makes it no less important. For a startup, the right location could make or break your business.
Depending on what industry your startup is in, different sectors of London will serve different startups better. For instance, startups in finance will find that other businesses in the same industry are largely concentrated around three areas of London, with 78 per cent of the city’s finance service jobs based around the City of London, Tower Hamlets, and Westminster. Tech startups will find like-minded firms in London’s Silicon Roundabout. Media startups similarly gather in Soho. Before starting your search for office space, be sure to research where businesses in your industry gather.
Finding office space in an area rich with similar firms comes with a variety of benefits. It helps situate your startup company within the community, providing you with opportunities to collaborate, and bolstering your team’s ability to come up with innovative new ideas to do business. Operating in an area suited to your industry also provides you with greater access to specialised workers suited for your startup. It opens the way to greater prestige over time, grants you access to a larger consumer pool to do business with, and situates you in closer proximity to professional services that can benefit your startup.
Another consideration you’ll want to keep an eye out for is your location’s accessibility. The best location means nothing if members of your team are finding it inconvenient or pricy to get to work. The last thing you want to do is to push crucial members of your team to look for a job elsewhere because their transit is annoying and lengthy. Make sure that your office has adequate parking space and is within reasonable distance to train stations for those who rely on public transportation.
Take Advantage of Coworking Space
Coworking is immensely popular with startup companies, and for good reason. Working in a shared office space in London provides a variety of benefits that suit a startup company better than any other office space.
For a fresh startup just starting out, coworking spaces provide your team with the crucial opportunity to network. Shared office space is an incredibly diverse space filled with people from all kinds of companies and industries. You never know who you may run into – and who might be beneficial for your startup firm to know. Operating from a space like this puts your team in a position to meet others. It also helps to safeguard your team from the common problem of isolation. It’s hard to be lonely when a huge variety of people from all sorts of industries are working right there beside your team.
Similarly, coworking space is flexible. For startups that might have five employees one month and ten the next, operating in a coworking space lets you accommodate sudden changes in team sizes. If your team grows quickly and stops fitting in the space you’re in, there’s no problem; all you need to do is move into the office down the hall that is better equipped to handle your startup’s team.
Renting a coworking space also helps with budgeting. As a startup, your funds are likely pretty tight. Coworking space allows you to rent out better office space at a discounted price at the cost of having to share it (which is beneficial to you anyway!). The result can be beneficial for everyone involved and lead to a more productive and effective team.
Account For Team Growth and How Much Office Space You Really Need
As a startup company, you’re likely to see fluctuations in your team growth during your first few years of operation, so it’s important to forecast how your team will change and find an office space that is flexible enough to support this change. You don’t want to sign an office space in London only to find that you don’t have enough space for everyone three months down the line. Make sure that you know your termination and expansion rights so that you don’t run into problems when your team starts to grow.
Make a headcount projection for how you expect your team to grow over your lease and ensure that you have enough space to fit everyone by the end of your stay.
Evaluate Your Options For Lease or Licence Terms
There are many different lease terms: shared, coworking, subleasing, direct, and more. Depending on the office space, you may be expected to sign a lease that lasts several years. There’s a general rule here: the longer the lease, the more choices you have in premium office space.
But it’s likely that, as a London startup company, signing a multi-year lease is the last thing you want to do, especially when the growth of your startup firm is in flux and what your team needs is not necessarily certain yet. Take advantage of flexible lease terms and licences and keep open communication with the office’s landlord or property manager. Be adamant about what your team needs and only sign a contract that fits your needs, to avoid running into a situation that can be detrimental to your startup.
Every startup business requires a home that allows them to thrive. At Hubble, we specialise in helping companies find homes that fit their own unique needs. With a search platform that allows you to browse thousands of office spaces across London based on your specifications, finding a place is smoother than ever. Your first home is crucial for letting a startup thrive. All you need to know is how to take advantage of it.