A common challenge for scaling businesses is to select a workspace which is going to fit your growth plans as you increase headcount.

Most tech companies follow a growth pattern that is unlike most other businesses…

·      You’ve seen rapid initial growth

·      You’ve invested your heart and soul in to your Series A round

·      Now you need to lead your business on a growth trajectory and before you know it, up comes your Series B round which will fuel more growth…

All of those stages bring more people into the business quickly and place a strain on your existing business infrastructure – in particular, it’s common for tech companies to outgrow their workspace before the lease is up. This can lead to restrictions on your growth or large financial penalties if you move before the end of the contract.

So, how do you find a workspace that matches your growth and hiring plans rather than hindering them?

We’ve worked with plenty of tech firms to secure them a home which works with them and have some key advice for any scaling tech firm looking to take the next step…

1 – Flexibility - Find the right landlord/flexible operator partner

It’s understandable to be apprehensive about committing to a long-term contract when you’re uncertain how many people you’ll have in a year. If you add 20, 50, 100 or even more new faces, an inflexible office contract might hold you back.

However, by choosing the right landlord or flex operator, you can turn that uncertainty into a huge positive.

There are some real gems out there who understand fas tgrowth tech firms and will partner with you to facilitate your growth plans and provide a solid customer experience.

It’s typically those with an understanding of scale ups and a proven track record of accommodating high growth firms in their portfolio throughout their scale up phases that can give you the comfort you need. They can provide an office where you can take more space as you add more people without having to move or renegotiate terms.

2 – Don’t use your investment to pay for an expensive fit out!

Whichever series of investment you’re going through (especially in the early days) it’s important to keep cash in the business and invest in people, tech, operations and growth - NOT an expensive fit-out, especially when you might outgrow the space quickly and need to move again.

There are plenty of spaces (including off market opportunities) out there which are fully fitted out. If not, it’s possible in most scenarios to agree for the landlord to absorb the cost and rentalise the payment over your tenure to keep cash flow strong and your growth plans intact!

As with flexible space considerations, it’s more than possible to find a workspace which can embrace your growth plans and work with you to keep everything on track.

3 – Deal structure

Traditional long-term leases are no longer the only solution for businesses and there are plenty of ways to find a deal structure that supports your tech business as it scales up, such as:

Pay as you grow

Take a larger space and structure the deal on a stepped rent which is aligned to your hiring plans. For example, the first 6 months at X rent which then increases at month 12, month 18 etc. This means you’re not paying more than you need to and helps you keep costs streamlined to encourage growth.

Option agreements

You can take option agreements which means you have a right to expand into adjacent space with first right of refusal on any additional space.

Again, this keeps initial costs down but means you are able to expand quickly and without any hassle when you’re ready to do so.

4 – Establish what the future of work looks like at your business!

Every company is different, but you should try to look ahead and see how you will be working in the future, then integrate that plan into your workplace search.

Are you mainly working remotely or in a hybrid fashion? Or are you planning to have everyone in the office full time?

Knowing how often people want to work together in person and how they want to do that will inform the office space you end up choosing. Ifyou don’t have open discussions with your teams it’s highly likely you don’t know their preference and that might mean choosing the wrong type of office – leading to staff retention and hiring issues.

There’s no point spending on a larger space if people won’t end up using it. Likewise, you don’t want to go for a smaller space and find that everyone wants to be in five days a week.

5 – Tech incubators

Finally, it’s worth thinking about whether you want to be around other start-ups and scale-ups, and whether that is an essential part ofyour growth plans.

Specialist tech environments can help companies innovate, test, market and sell their products successfully and provide huge benefits that you might not get in a more generic office building.

If that’s the case, you could consider a workspace that is part of a larger tech hub and is designed to help businesses like yours to flourish. Workspaces are available which are built around tech accelerators so that you are among your peers and in a friendly, stimulating tech environment.

At Level, we have helped dozens of tech scale-ups find a new office space to rent in Manchester that aligns with their growth plans and has played a big role in their future. Looking for a new scale-up office space in Manchester for your tech business? Book your consultation today.  

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