How to choose an office when starting a business【Comparison of 5 typical types】

• Update:2023/11/14

In order to get your business off the ground, the type of office you choose is also important. So, what factors should you focus on when choosing an office?

This section explains how to choose an office when starting a business. We compare the features, advantages, and disadvantages of five typical types of office space, so if you are just starting a business, please use this as a reference for choosing an office.

How to choose an office when starting a business

When choosing an office, look for the following items.

1. Cost

The use of office space involves initial costs at the time of contract and running costs such as monthly rent. Fees vary depending on location (per tsubo), office size, and other factors, but in most cases, funds are not plentiful in the early stages of starting a business. Therefore, how to reduce fixed costs is an important issue to keep as much cash as possible in the company. In order to keep rent as low as possible in the early stages of starting a business, it is a good idea to choose an inexpensive serviced office or shared office space.

2. Extent

The average office space per person is said to be 3 tsubo to 5 tsubo. The amount of space needed depends on the business. For example, if you use the space for storing documents and books, such as a lawyer, you will need some space in your office.

3. Location (e.g. of industry)

Location is a very important factor in the development of a business. Consider the area’s name value, accessibility, and the number of companies doing business in the area when making your decision.

4. Functionality

The more functional the office layout and the availability of restrooms, the more comfortable the work environment will be. If your job requires you to be in the office for long periods of time, office functionality is an item you should focus on.

5. Availability of corporate registration

Some rental properties have contracts that do not allow corporate registration. For example, apartments and condominiums that are only for residential use have a statement in the contract that corporate registration is not possible. You should consult with the landlord to determine if corporate registration is actually possible.

If you are considering incorporating your business, look for an office that can be registered as a corporation to ensure smooth business operations.

Types of office space when starting a business

There are five types of office styles when starting a business.
Let’s delve into the characteristics of each.

Office for rent

Feature

It is also said to be highly reliable and advantageous for financing.
Recommended for companies that have grown in size.

〇 Advantages

• Some freedom to set up office layouts
• You can decide on your own office equipment
• Low risk of information leakage and increased security
• Office rents remain the same even if the number of employees fluctuates slightly
• Use of telecommunications equipment is limited to in-house use only, so speed limits are unlikely to be imposed

× Demerit

• Initial cost is high
• May not be cost-effective for small numbers of people
• Need to gather supplies in-house
• Difficult to find an office that meets your requirements
• Difficult to relocate

Serviced Office

Feature

This is a style of office where a portion of the floor is rented.
It is easy to use when you are small and do not require a large space, such as less than 10 people.

〇 Advantages

• Lower initial and maintenance costs than renting an office
• Renting an office in a good location
• Private rooms allow you to leave your work equipment in the office
• The room may have a desk, chair, and other minimal furnishings
• Communication, utilities, and other expenses are included in the cost
• Meeting rooms and reception rooms are available
• Relocation is easier than in a rented office because of the small size of the space

× Demerit

• May be more expensive when used by a large number of people
• Although it is a private room, there is a risk of information leakage due to the presence of another company on the floor, so security control is necessary
• Network communication is shared, so there is a risk of slow communication speed

Shared Office

Feature

Offices with lea address or fixed seating. Work is done in an open space, not in a private room.
Recommended for freelancers (sole proprietors) and start-up companies.

〇 Advantages

• Renting an office for a small number of people is less expensive than renting an office
• Free drinks are available in many locations
• Expensive office equipment can be used
• Office equipment can be rented in one package
• Communication and utilities are included in the cost
• Easy to relocate
• Possibility to connect with other business people
• Meeting rooms are available
• Phone and fax services are available even if you are not in the office

× Demerit

• Cannot work in a fixed seat depending on the plan
• There are concerns about security and information leakage because it is an open space
• Not suitable for businesses that require fixed lines, etc
• Network communication is shared, so there is a possibility of slow communication

Virtual Office

Feature

There is no work space in the office where you can put your address and telephone. Recommended for those who do not need a fixed office but need a company address and fixed telephone.

〇 Advantages

• Inexpensive company address in a desirable location
• You can make phone calls, faxes, etc. without having to be at the office yourself
• Eliminate the need to use your home address for business

× Demerit

• Some types of businesses cannot obtain a license
• Not suitable for industries that require a fixed line
• Not suitable for those who work in an office
• Some say it lacks reliability

Home and office

Feature

An office that is part of a home or doubles as a residence.
It has similar functionality to a rental office while keeping the price low.

〇 Advantages

• Less commuting time
• More secure than a shared office
• Lower office costs
• No time consuming contracts, relocation, etc
• No need to purchase office equipment if you can use your own equipment at home
• Rent, communication and utilities expenses can be deducted as expenses
• Flexible work hours
• Easier to manage housework and childcare

× Demerit

• There is a possibility of mixing public and private life (hard to have a sense of balance)
• If you rent, you may not be able to register as a corporation
• Investment in equipment that is not at home must be purchased at actual cost

Summary

Choosing an office depends on the nature of your work and business. With the increase in the number of serviced offices and shared offices, especially in the Tokyo metropolitan area, it has become easier to start a small business. First, carefully plan what kind of environment you need and create a suitable office environment.