Starting your company in a garage is legendary in the tech world. What’s not legendary or rarely talked about is the downside of working from home - be it from your garage, home office, or even the local coffee shop. The noise, nagging and lack of networking can not only drive you crazy, but it can also hinder the growth of your business platform. At some point, most small businesses hope to graduate into space that is conducive to growth and productivity. And perhaps, if you’re one of the few and lucky, you’ll be able to bring out an IPO and all the spoils one entails.
Pros and Cons
Scenario
Pros
Cons
WFH
- No shower necessary
- Work in your pajamas (or the nude if you don’t have any video conferences)
- Single? Very little distractions
- Cost
- Fridge
- You can go days without showering!
- Have kids? LOTS of distractions
- No unplanned interaction | isolation
- No water cooler gossip; er, I mean intel
- Fridge
Co-working locations
- Feel like you’re back in college
- Engage with like-minded entrepreneurs
- Lots of energy
- Relative low cost
- Feel like you’re back in college
- Competition looking over your shoulder
-There is a cost
- Not ideal to host clients and prospects
Your own office space
- It’s your OWN! You have arrived.
- Branded and designed to your company culture – not someone else’s
- Clients and prospects see that you are not a fly-by-the-night company. You are legit enough to lease your own space.
-There is a cost and commitment (don’t worry, it’s not like it’s FOREVER)
- You need to sign a lease (albeit, year-to-year leases are available)
Chicago’s tech scene is saturated in the River North area and called Silicon Loop. Co-op and Coworking locations have blossomed all over the city but especially in this area. Places like 1871, Catapult and WeWorks are beginner alternatives to working from home and offer many of the benefits of having your own space – but it’s not your own space. Here’s how you know when it’s time to take off the training wheels:
- Your rent obligation at a Coworking location is more than $1500 per month. At this point you can find your own space for approximately the same price range. A good rule of thumb is to designate approximately 200 square feet per person to determine how much office space you need. For example, LaunchPad Lab who used 1871 for a while before subleasing some space just recently commenced a direct lease of 1,500 square feet of space at 650 Lake Street for its expanding business.
- You have clients visiting. The open layout and collegial feel of 1871, Catapult and others is great for energy and creativity but it’s not awesome for presenting to clients or investors. Why have your product, tool or offering clouded by the bells and whistles of the space and other companies?
- You need to add 10 employees by next Friday. With your own office space, you control the layout and arrange employees to best suit your business and maximize productivity.
You’ll find that Chicago’s rents are far more affordable than the tech hub of NorCal with average rents around $31.89 versus $54.64, respectively. The River North area (bounded by the River, North Ave and State Street) is the second tightest submarket in Chicago with a 10.7% vacancy rate. So what’s this mean to you, the start up? If you want space near the rest of the tech market, know that it’s going to be hard to find and not cheap. Look for direct and sublease options (sublease options typically offer a discount of 30% or more in terms of rent). If you have the 4-6 person firm and need some space right now, there’s a 1,347 sf sublease option at 444 North Wells. At $24 psf gross, it’s a steal for this neighborhood. Call me if you’re interested!
Best advice out there is to hire someone to help you with your real estate so that you can keep your eye on the ball (fyi, landlord pays for your broker; not you!) Here’s some info on how Singlehop found their space – their challenges and opportunities!
Brooke Houghton
Tenant Representation Broker
312-925-8875
@minnesotanative
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