Most of us strive to spend money responsibly. We make budgets and try to save funds for emergency purposes.
But what happens when we run into a costly and unpredictable project?
Office moves are just that. Many of us have moved in our personal lives and are aware of the costs associated with residential moves. Office relocations, unfortunately, are a different animal. That doesn’t, however, mean you can’t take steps to estimate your office move budget.
Breaking the Office Move Budget
We’ve discussed in the past just how expensive it can be to relocate an office. Small business owners can expect to pay anywhere between $5,000 and $30,000 to move a 10,000 foot office space. That’s obviously a wide range in costs, so you’ll need to evaluate more than just the fees charged by the office moving company with whom you plan to partner.
In addition to the relatively predictable costs of hiring a moving company, you’ll also need to consider factors such as initial payments to the realtors, legal fees and renovation costs, among others. Needless to say you’ll need to carefully plan out your budget for the office move and focus on whether your revenue can offset any potential losses.
As you begin budgeting for your next office move, be sure to consider the following cost drivers.
1. Rent Fees
Whether you’re leasing an office space or an apartment, very few of us enjoy sending in the rent payment at the end of the month. It’s even worse when we first move into a new space.
At the most basic level, rent is the amount you pay per square footage in your office space. Calculating the amount you’ll pay is fairly easy. Just multiply the amount of square footage you’re hoping to lease by the rate for each square foot.
But base rent fees are only the start. You’ll also need to factor in expenses related to taxes, insurance and maintenance in building common areas. More significantly, though, is the security deposit. You’ll likely be required to pay the equivalent of a month’s rent for the deposit, but there’s also a chance the realtor could ask for an additional month’s rent if your company’s credit history has a few question marks in it.
Finally, there’s parking. Some facilities require companies to lease parking spots for their employees. Your company will likely be allocated spaces based on the square footage you’re leasing in the building, and you will then need to pay for these spaces in addition to your monthly rental fees.
2. Legal Fees
It’s never advisable to sign a legal document without legal counsel. This is especially true for office leases since the amount of money the tenant and realtor are agreeing to exchange can be quite large.
But, as most of us are already aware, legal services can be expensive. The typical rate for commercial real estate lawyers ranges from a flat rate of $1,500 to $2,000, although this varies widely depending on the region of the country. Complex lease agreements can also carry with them additional fees. Again, though this may seem to be an unnecessary expense, it’s always a good idea to arm yourself with experts before you lock your company into any long term agreement.
3. Renovation and Build Out Costs
New office spaces are rarely completely suited for your company’s needs before you move in. In many cases you’ll need to invest substantially in changes to the facility before moving your staff into your company’s new quarters.
Although landlords will at times provide your company with an allowance for some renovations, you’ll still likely have to take on some of the costs yourself. Most notably, you’ll probably need to purchase new furniture and equipment for the new space as well as install new cabling.
Costs for cabling, in particular, can add up. Generally, costs for cabling are calculated based on the number of “drops” or a run of cable leading to an employee’s workspace. On average, your company should expect to pay between $125 and $200 per drop.
No business can take on all of these tasks on their own. You’ll need help from contractors. Unfortunately, their services aren’t free.
The contractors you’ll actually need to hire depends on your company’s needs. If, for instance, you don’t need to renovate your new office space, you won’t need to hire engineers or interior designers.
In most cases, though, you’ll need to include an office moving company, a project manager and general contractors for installing cable and fixtures in your office move budget. Typically, these contractors charge based on the total cost of the project and take a percentage of it as a payment.
When working with contractors, having a good project manager can be extremely valuable. We’ve mentioned before how they can help you save money during an office move by identifying areas of savings and negotiating directly with contractors.
At Nodus Office Movers, experienced project managers are a part of our office moving package. If you’re looking for office moving contractors, we’re here to help. Contact us today for a free office moving estimate. We promise your price quote will be transparent and based on your company’s needs.