Home > Startup > Renting Storefront or Office Space? 8 Pros & Cons

Renting Storefront or Office Space? 8 Pros & Cons

By: Laura Bell


Daytime view of historic downtown shopping district with storefronts and blank signs.
** Note: Slight blurriness, best at smaller sizes

You started your business at home. It has taken off in directions you didn’t expect. Now your house feels too small.  Should you buy commercial space or should you wait?

While your accountant should have a say in the matter, this article will try to help you decide whether your business needs a storefront or office.  There’s much to unpack since there are many different types of enterprises, but hopefully this will cover your business type.

Space for Materials and Tools

Many entrepreneurs really don’t need a public space. They just need more private space.  Perhaps your problem is a home crowded with products and equipment or a garage crowded with tools and supplies. Perhaps you are paying double for gas because your contractor’s van is overloaded with heavy equipment and composite mats

In these cases, you need a shed or storage unit. This is much cheaper than a storefront or office, and it’s something only you will access. This allows you to keep a wide range of items there without worrying about how it looks to anyone but yourself. Finding a small warehouse for rent with no or minimal contract is possible. A growing trend is customizable space solutions that can be configured for both storage and a functional office.

Space for Customers or Clients

If you honestly need retail space to carry on your business, a storefront may be a logical move.  Still, you need to do a thorough analysis of how different a storefront is from your online business model. 

Perhaps you need clients to see you in a professional space. It is logical that you may be looking for office space outside your home.  An analysis of how your fees may need to change if you add rent to your budget must be a major consideration.

Rent Considerations

Rental contracts will require upfront payments. You shouldn’t even think about moving into a storefront or office space if you can’t make that payment without a loan. Even so, be prepared that rent payments may take all of your operating capital for quite awhile.

Once you are paying rent, you are no longer as flexible as you were when you were running your business from home. There are now many more fixed costs which you must pay every month. You could think of it as doubling your electricity, internet and water bills.  

Your landlord may make your storefront commit to being open six or seven days a week and may require certain hours.  They may require a cleaning fee on top of the rent. These are all questions to ask before signing a lease.

Staff Considerations

If you are moving into an office to consolidate a growing staff, that makes sense. However, if you are moving into a storefront after running a thriving online business alone, you need to ask yourself if you can afford employees. Even if there are two people involved in the business, there are bound to be schedule conflicts. 

Location, Location, Location

No matter how much cheaper the rent is, an out-of-the-way location will defeat your goal of reaching the paying public.  This may mean paying more, but it is essential. You will have to strike a balance between the cost of rent and the location, but you shouldn’t settle for the lowest rent, thinking that location doesn’t matter. 

Start Up Costs

Beyond the security deposit and rent, you may have to pay the landlord for any build out costs.  That may even be the reason that you were quoted such a low rent. Make sure to ask about build out before you sign on the dotted line.

Even without direct build-out costs, there will be expenses. You will need shelving for your store or desks for your office. You should add up all of these costs before you ever rent a space.  Otherwise, high start up costs could tank your business expansion before it even gets off the ground.

Online Business

If your business is online and you are doing well, you may be cutting into your profits by opening up an office or storefront. You may use up everything you’ve saved just to create what may be a vanity project. You need to be sure that it will improve your bottom line because you can’t afford to simply break even. All of the rent, work and sweat that goes into it must be rewarded financially.

Sharing a Space

If you are determined to grow beyond your home base, why not test the waters?  Consider how you could share space. This may be a shared office space with conference rooms where you can meet with clients. It may be space in an established store where you can put your products.  

Whatever you do, remember that your decision to rent space can affect your momentum as well as your bottom line.  Make sure you understand your own business model and its potential.  Get business advice from those in the know and remember that you will be giving up flexibility for a more rigorous schedule.

Published: January 29, 2021

Trending Articles

Stay up to date with
laura bell

Laura Bell

Laura Bell contributes regularly to websites on a variety of subjects. Her interests include modern trends, technology, health care, and anything else that affects the quality of life of her readers.

Related Articles