Why virtual culture may work better than the ‘playpens for adults’ we call an office

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The first few months after you launch a startup are stressful, to say the least.

You’re searching for your first customers, trying to figure out how the hell hiring works, and thinking fondly of a time when eight hours of sleep was no big deal.

You move at lightspeed for those first few months, and while it’s hectic, it’s also focusing. You’re not worried about catered lunches or renting an office with enough room for a ping pong table. You’re working out of coffeeshops, kitchens, libraries—anywhere with wifi—because the only thing you have room for in your mind is “How do I keep this company going?”

And then something strange happens. Things level out. You look around after grinding for months straight, and somehow a real company has formed around you. You have employees, processes, traction—the whole nine yards.

You think, “Alright, we’re officially a real company. I guess we need an office now?

Three and half years ago, I was in this same position. My company was doing well, we were reaching new levels of growth, and while we’d succeeded so far as a fully remote team, I assumed that at some point we were going to need an office space.

The problem was, wherever I searched, I could find no hard-and-fast rules about when the right time to buy an office was. As a result, it took me weeks of research to find a good answer to my question, weeks I’m hoping to spare you with this article.

Before you decide whether or not to get an office, you need to fully understand how much an office will cost you.

How Much Does An Office Really Cost?

When I first investigated buying an office for my company, I did not like what I discovered.

I learned that, you are required to assign each employee a certain amount of square feet. That was cool with me. I was looking at giving my employees 100 square feet each, which loosely translates into a 10ft x 10ft space.

Then, I had to consider grossing factors like wall thickness, cubicle width, hallways, bathrooms, break rooms, windows, stairwells and the like. That was cool with me too.

What was not cool with me, however, was by the time I added up all the space that I would need, I was looking at a facility that would have cost me about $100,000 a year or around $8,3000 a month!

Uncool.

That didn’t include the build out, which would have put me in at another $100,000 right out of the gate. Then I would have to consider permits, licenses, maintenance, security, utilities, and insurance. It sounded like a lot, but this is a relatively cheap price tag to put 30 some-odd people in an office.

Very uncool.

But still, I couldn’t shake those numbers. $100,000 a year for a lease. $8,300 a month toward rent. $6,000 for desks. $50,000 a year in utilities. All that money down the drain.

It can be easy to fool yourself into thinking an office is affordable by ignoring all those ancillary costs, but trust me, many small businesses stay small because they underestimate the cost of an office.

Why My Company Will Never Have An Office

As I researched the real cost of an office, I couldn’t stop thinking about all the other great things I could do with that money:

  • I could ramp up my employees’ already kick-ass benefits.
  • I could expand my team.
  • I could invest it back into the company.

I could put over $100,000 into growing my company, or I could spend it on buying an office for a team that got here without one

After praying on it, I finally came to the conclusion that I was being crazy; I was going with the crowd; I was doing what everyone else does. I wasn’t being different.

I opted out of moving into an office. Truth be told, I’m so glad that I did. Instead of losing all of that money to an office, I was able to offer my employees all of the incredible benefits that I wanted to.

I felt that pressure, but I decided to take a different path and keep my team virtual. I made the right choice because the lion’s share of my employees (easily over 90% of them) said, “Thank you for not making us move to an office! I want to work from home. That’s why I came here to work for you to begin with!”

The office would have changed everything that my employees had come to love about their virtual lives. It would have added that expensive and time-consuming commute back to their daily schedule; it would have destroyed their flexible days. It would have cost them more money to do less work.

So, When Should You Get An Office?

If you’re dead-set on having office space, then the answer is simple. Buy an office when you can afford it. However, be sure you know exactly how much an office will really cost you.

To help you with this, we actually built an office space calculator that will estimate the real cost of an office for your company.

The real question, however, isn’t when you should get an office. The real question is why do you want an office in the first place?

If you have a legitimate need for office space, then more power to you.

If you’re buying an office because you think that moving to an office is just the next logical step in the lifecycle of your business—just like going to college, getting a job, and getting married is a part of the human lifecycle—then you probably don’t need an office in the first place.

Excerpted and adapted from Virtual Culture: The Way We Work Doesn’t Work Anymore, available on Amazon.

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Bryan Miles

Bryan Miles

Bryan Miles is CEO & Co-founder of BELAY, alongside his wife Shannon. A leading US-based, virtual solutions company, BELAY has over six hundred team members—all working from home, remotely. Without an office, BELAY has graced the Inc. 5000 list three times and was awarded the number one spot in Entrepreneur Magazine’s Best Company Culture.