Lease or Own – Why That Decision Matters When Choosing Office Space
Office space is a major component of an independent financial practice’s success but is often not given much attention until acquiring it becomes an inevitable necessity. The fact is office space is a reflection of your practice and the image it projects to the world. You will be hosting prospective business partners, colleagues, and – most importantly – clients in your office space. Ensuring the atmosphere conveys success, organization, and professionalism are vital. Your office space should have a strategically dynamic atmosphere that illustrates to clients and business partners alike a growth-oriented mindset. Additionally, maximizing your office space layout for efficiency is essential as its practical implications on day-to-day operations and asset growth are undeniable.
Knowing why your office space is important to your practice success is one thing, but how to efficiently secure the office space that will allow your practice to thrive is a completely different matter. The first choice you need to make is whether to lease or buy. Buying offers financial upside in that it represents a fixed cost, serves as a tax deduction, and can provide for extra income in the form of future rental opportunity and retirement savings. The counterpoint to those benefits is that owning your office space requires a significant up-front financial investment and lacks flexibility if the needs of your practice were to grow and change in the future.
When assessing a lease opportunity, the variable costs and lack of equity stake may initially seem financially limiting but they are counterbalanced by a lower upfront investment which frees up much needed working capital as you establish and grow your practice. Leasing opportunities for office space also afford the most enviable locations, enabling a practice to project the right image from the minute it opens its doors. It also cannot be discounted that property ownership comes with its own stressors and leasing puts those concerns squarely in the court of your landlord, allowing you to do what you do best and focus on your practice.
So which choice is the best one – leasing or buying? The fact is there isn’t one answer to that question as office space needs are variable and unique to each practice and advisory team. An effective way to make that decision is by working with a consulting firm that specializes in business solutions for the financial services industry.
One such firm is Practice Dynamics, which offers end-to-end turnkey solutions for financial advisors, RIAs, Broker-Dealers, and OSJs seeking to establish, grow, and optimize their practice performance while reducing costs and maximizing business efficiencies. Practice Dynamics services and solutions are customizable, scalable, and expertly address all aspects of business operations and performance, from office set-up, technology, and telecommunications to marketing, branding, accounting, and succession. To learn more about Practice Dynamics visit advisorpracticedynamics.com, email [email protected]
The important takeaway is not to leave your office space selection process up to chance. Put in the planning and thought necessary when considering buying or leasing space. Afterall, choosing independence was the decision of a lifetime and the choices you make which support that move deserve nothing less than your best.