Why long term (traditional) leases are bad for small businesses, and how coworking can help

Durham Bottling Co
March 8, 2023

Why long term (traditional) leases are bad for small businesses, and how coworking can help

Introduction

For many businesses, the traditional office lease is the only option. But in some cases, it's not ideal. Traditional leases require tenants to sign long-term contracts, which can be expensive and restrictive. Coworking spaces offer a more flexible alternative while still allowing businesses to have an excellent work environment.

Businesses often sign long term leases, which locks them into a location for a period of time.

Photo by Ian Chen on Unsplash

Long term leases are a bad deal for small businesses. They're expensive, restrictive, and hard to get out of.

Here's why:

  • You pay more per square foot than you would if you were renting month-to-month or even on a yearly basis. That means less money in your pocket at the end of each month--and less flexibility when it comes time to relocate.
  • A long-term lease often includes an option renewal clause (with an increase), which can lead to significant increases over time if your business grows or moves locations within the same building but needs more space than what was originally leased by its previous tenant. The landlord may also have the right to raise rent based on inflation indexes during this period as well as other factors such as property taxes paid by landlords that are passed along through higher rents paid by tenants!

In the past, this has been to ensure that tenants pay for the office for the entire duration of their lease.

In the past, this has been to ensure that tenants pay for the office for the entire duration of their lease. The problem with this model is that it locks businesses into a certain location and office size, making it difficult to grow or change as your business needs change over time.

These long-term leases also make it harder for small businesses to get started because they can't afford high upfront costs like rent or security deposits on offices where they have no customers yet (or even clients).

This is because these leases can be lucrative for them as they guarantee recurring income over a long period of time.

A lease is a contract between the landlord and tenant. It's a legal document that can be cancelled by either party with notice. The terms of the lease will vary depending on your location, but it typically includes information about rent and other fees, when payments are due, what utilities are included in rent (or not), whether you have to pay for parking or not and so forth.

If you think about it from their perspective: they're getting paid monthly for several years without having to do anything else other than collect their rent checks every month. This sounds lucrative doesn't it?

Coworking centers provide tenants with flexible workspace options.

Coworking spaces provide tenants with flexible workspace options.

Coworking memberships are typically more affordable than traditional leases, which gives small businesses the ability to experiment with different types of office space. Additionally, coworking centers offer a variety of different configurations for their rentals; this allows tenants to move in and out without signing new contracts or paying penalties.

Coworking spaces offer more flexibility than traditional leases, giving tenants more control over where and when they work.

A long-term lease is a commitment to the space that can be difficult to break. In addition to the cost of breaking a lease, many landlords charge tenants for early termination fees or penalize them for moving out early. This means that if your business needs change or your landlord wants you out, there's little room for negotiation.

Coworking spaces offer more flexibility than traditional leases, giving tenants more control over where and when they work. Coworking spaces typically have flexible terms on their contracts: no penalty for leaving early; no penalty for moving in early; no penalty for changing your mind about location; no penalty for changing your mind about the size of space you need; and no penalty for changing your mind about the length of lease you need (though some may require an end date).

Coworking spaces allow tenants to move in and out without signing new contracts or paying penalties.

Coworking spaces allow tenants to move in and out without signing new contracts or paying penalties.

This is key for small businesses looking to try out different locations before committing to one. For example, if you're a freelancer who works from home but needs an office space on occasion, coworking can give you access to that office space when needed without having to sign another long-term lease.

Traditional leases are expensive and restrictive while coworking spaces offer a more flexible alternative while still allowing businesses to have an excellent work environment

Coworking spaces offer a more flexible alternative to traditional leases. Traditional leases are expensive and restrictive, while coworking spaces allow tenants to move in and out without signing new contracts or paying penalties. In addition, they're cheaper than traditional leases because they don't require the same amount of space as an office does--so you can get more done with less money!

Coworking is also better for small businesses than traditional leasing because it allows them to grow organically without having to commit themselves financially from the start.

Conclusion

With coworking spaces, small businesses have access to all the amenities they need to run their business and thrive. This includes everything from desks and chairs to printers and fax machines. Coworking spaces also allow tenants to move in and out without signing new contracts or paying penalties, which means that if you want to try something new--like starting up a second location for your company--you can do so without having to worry about breaking your lease agreement first!

The Durham Bottling Company: Your Coworking Solution

DBCo. is the coworking solution to all of your office needs. We offer an inclusive, supportive community to our members, with all the tools needed to work happily and productively in the modern world.

Unsure about which membership offer will be the best choice for you or your team? We’re happy to discuss our various memberships and rates, and help select the perfect option for you. Contact us today!

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