Office rent is one of the biggest expenses a company can have that doesn’t create revenue. It is a necessary expense and the more employees the bigger expense, but what if you could break even or make money off your office.
We are conservative with our cash on an OPEX basis, but we want to and need to expand our office. We are in a 3 bedroom apt, 1000 sq. ft, $1000 a month rent. Great short term, bad long term. So we have contemplated expanding our office and even though the market for tenants is great because of the bad economy we didn’t want to put a $3-4000 a month expense/liability for 2-3 years on our balance sheet and credit report
So in doing some research and thinking, we were motivated by other companies renting their extra office space as incubators. Jason Calacnis at Mahalo has started to rent out extra space to early startups, reported by Allen Stern on Center Networks.
My partner and I sat down and asked if we could go further and not only cover our cost of expansion, but make money as well. It is a little easier since we sell apparel. Our brainstorming turned into the Collar Free boutique co-op concept: half office, half retail boutiques made of small stores and independent designers looking for a small economical storefront.
We are going to lease about 3000 sq. ft in downtown San Dieog and sublet to 5 or 6 independent designers for $800-1200 a month. We will be providing shared staff, advertising, and rent. We will help support the struggling retail industry, allow for our expansion with lower risk, and create another outlet to sell our inventory. We will be launching this venture Jan 2009. Here is the promotional creative.
[...] Get a little bigger space than you need and sublet your extra space to start-ups. You can offset your rent or make money off your space. We are doing this with our boutique co-op concept. [...]
This is a very interesting idea, can’t wait to see how it goes.