Selecting Office Space for Your Small Business

Moving into a commercial office space can be an exciting time for a small business owner. It signals a coming of age for a business that has outlived the usefulness of a home office. More space is needed to house new employees and more equipment, and to conduct meetings, conferences, and product demonstrations. A commercial office gives a small business owner the feeling of taking the business to its next level of growth—with continued growth expected and eagerly anticipated.

How Much Office Space Should You Lease?

When considering how much commercial space to lease, add some extra space for growth to the total square footage of the space you are currently occupying. Determine how many employees you expect to be housing by the end of the next year. Determine what furnishings and office equipment you will need to accommodate them.

Establish whether you will need a reception area. Decide on the image you want to project through the layout and design of your space. Determine your need for conference and/or demonstration rooms.

Try to project two or three years out from the start of the lease—will the new space accommodate your anticipated growth?

Where Should You Locate Your Office?

Where you locate your business is very important. If you locate in an upscale suburban neighborhood or a fashionable area of downtown, you may attract consumers with plenty of disposable cash. But you will also face high rents or leasing costs, which would devour precious cash. Less upscale areas may offer tax incentives or spaces with attractive lease options. However, these areas may have high crime or vandalism rates. How about the commute—how far is it from your home to your new office space? All of these considerations need to be carefully examined when deciding where to locate your business.


You should determine what both your employee and customer parking needs will be—does the space you are considering offer enough parking for your needs and the needs of surrounding businesses? Is the parking underground or on-street, metered parking? Is handicapped parking available?


Check out the other tenants in the building or office complex you will be leasing in. Find out how long they have occupied the building. Ask if they are on good terms with the landlord. Find out whether their experiences as tenants have been largely satisfactory. Inquire about insurance premiums, building security, and cleaning services for the building.

Handicap Access

Check to see whether the building you are considering leasing in meets handicap access regulations, including appropriate bathroom facilities. Make sure your office space has been designed so that physically challenged employees can easily move around and are afforded an opportunity to be fully productive. If you are doing any renovation work on your space at all, you may be required to make the entrances and bathrooms handicapped accessible even though you do not have handicapped employees and even though you are only leasing, not buying the space.

Public Transportation

If on-street or off-street parking is limited or unavailable, locating your business in close proximity to public transportation takes on added significance. I can’t tell you how incredibly advantageous it can be in attracting employees if you are not just accessible by public transportation, but really easily accessible! Public transportation accessibility can even be used as an advertising tool to attract customers as well.


If you are attracted to a particular office space but envision remodeling that space to suit your needs—building partitions for work cubicles or removing walls to open up a reception area—make sure the landlord has no objections. Get permission in writing. See if you can negotiate a reduction in the lease payments in exchange for doing the remodeling work yourself.


Find out what the typical costs are for heating, electricity, and air conditioning in an office space similar to the one you are considering within the same building. Ask either the landlord or other building occupants for copies of the last six months of utility bills. Ask about required new account deposits from each of the utility companies you will be using. If you have a prior billing history with any of the utility companies, you may not need to submit a deposit.

Floor Plans

You have three basic choices in office floor plans: division by partition, open office, or individual, closed rooms. A combination of any of these floor plans is also a possibility. 

Partitions: Open offices divided by partitions were once in vogue at many large corporations. The advantage to this space configuration is that its flexible nature offers the chance for change, while affording a moderate level of visual and aural privacy. No one is looking directly at another employee and conversations can be conducted without fear of being overheard.

The disadvantages are that employees can feel isolated in their tiny “cube” and it doesn’t foster a sense of community. Unless it is a very high-end partition system, it probably doesn’t look attractive, and it may seem dated. There is a wide range of partition systems available. They can be extremely elaborate and complex or inexpensive and simple.

Open Floor Plan: Another approach to organizing space is the open design. This design is supposed to create a strong feeling of community among workers, but it suffers the drawbacks of noise and visual confusion. Currently, it is seen as hip. However, although I have worked in an open office space and it worked out fine, I usually find that when the space is truly full and every seat around me is taken, it is too much—too many people too close. Also, I have read about other people who work in open office space and have developed an unwritten rule to communicate verbally with one another as little as possible.

So, my bottom line feeling about open space is it could work out great or it could be terrible! The key is that you really need lots of space to make it work, enough so that people don’t feel they are on top of one another, and also the space should look extra interesting and funky.

Closed Rooms: Closed rooms can be a very expensive office design option. This option doesn’t offer the flexibility of either the partitioned or the open space plans. It does offer the ultimate in privacy, however. If you go for private offices, I suggest you at least encourage employees to leave their doors open whenever possible to encourage interaction and the exchange of ideas.

If you go for this plan, be sure to get the landlord’s permission to complete any construction work required to meet your needs.

A Hybrid Approach: Some combination of the partitioned, open, and closed room floor plans is another approach. You might have, for example, completely open areas for administrative or support staff, partitioned cubicles for mid-level employees, and closed areas for senior staff.

How to Bring Functionality into Your Office Design

Functionality is an important consideration when thinking about office design. The first functional aspect that you need to address is noise reduction. Your employees need to be able to hear clearly to effectively conduct phone conversations. You need to place fax machines, copiers, and other loud equipment out of the way and out of earshot.

You also need to create nice passageways that allow employees ease of movement from one area of the office to another. These pathways should also provide efficient traffic patterns.

Don’t forget to group people together according to their functional need to interface with each other.

Consider the Customer Perspective in Office Design

A customer’s impression of your office space as he or she first walks in the door is critical. The same holds true for employees, and especially for new hires.

Consider creating a waiting area at your entranceway. It can be very simple yet still welcoming, comfortable, and professional. All you really need is a couple of nice chairs and a table.

A meeting room may also be important in your business. This room should be as impressive as possible even if you can’t afford to go all out designing and furnishing other areas of your office space. Set up a nice room near the reception area with a conference table and nice chairs. This will give any customer a good feeling about your organization. 

Assigning Space

Assigning space to personnel can be an incredible political football, even among employees who don’t typically get riled. Seasoned employees have been known to fight tooth and nail for that window spot or the biggest office space. This is an issue of prestige, of course, and many employees link space allotment to the direction of their career paths.

The best approach is to make the assignments yourself and have that be the end of the story. Make it clear that you have given the assignments careful thought, and this is simply the plan you have devised and will be sticking to. Do try to give each person adequate space in which to carry out his or her job. Anticipate in advance the objections any given individual may have. Cut complainers off at the pass. If you don’t assign space decisively, people are going to grab whatever space they can or they are going to whine and complain. Either way, it will be a headache for you.

Also, decide in advance to what extent employees will be allowed to decorate their space, paint the walls, or hang photographs or posters. In short, set guidelines for personalizing office space. You don’t want to find yourself in the uncomfortable position of requesting the removal of any decorative elements after having previously allowed them. 

Getting Started with Office Design

Start by making a quick, rough sketch of your office design layout and concept with pencil and paper. If you are really feeling ambitious, get one of the commercially available design programs. Then you might want to flesh out your scheme by using space layout software or creating a more detailed sketch. Use a scale for the sketch—x inches equals x square feet—or do your layout on a gridded chart. Before you move in and start knocking down walls or dragging desks about, take out the tape measure and mark out walls, corridors, partitions, and desks with masking tape. Bring in a few key employees to discuss the layout. This helps gets your team’s buy-in, and their input on a final layout alleviates the possibility of major space wars on move-in day.

Takeaways You Can Use

  • Carefully create a list of the many important considerations in selecting your office.
  • After calculating how much space you need, add some extra space for growth.
  • Consider an open or partially open floor plan to foster a sense of community.

About Bob Adams

Bob Adams is a Harvard MBA serial entrepreneur. He has started over a dozen businesses including one that he launched with $1500 and sold for $40 million. He has written 17 books and created 52 online courses for entrepreneurs. Bob also founded BusinessTown, the go-to learning platform for starting and running a business.