Preserve a Team Environment: Safe Office Space Layouts for a COVID-19 World

This year has been full of unique challenges due to the COVID-19 pandemic. Companies in every industry have had to be creative in order to go back to work without sacrificing their employees’ health in the process. There are many benefits to working together in the office – but you’ll need to make sure that you are able to keep your team socially distanced while you do so. Here are some of the benefits of working together in person – and office layout ideas that will help you do so safely.

Advantages of Working in An Office

Although working from home has become very common, there are still many advantages to working in a traditional office space. Here’s why so many companies are still opting for office rentals

Creativity and Collaboration

Working in an office space with others fosters creativity. When your team has the ability to collaborate in person, it’s much easier to brainstorm and expand on each other’s ideas. This feeling of collaboration is difficult to replicate virtually. The process of organizing meetings is often easier in the office as well. You’ll be able to spend more time generating ideas and less time tackling technology or communication issues.

Problem Solving 

Another advantage of working in an office is the ability to solve problems much more quickly than you would while working remotely. If you encounter a challenge during the course of the workday, it’s much easier to talk to a supervisor in person and solve it right away. This is particularly advantageous for those who work with advanced technology that might need to be repaired or adjusted throughout the workday. 

Networking and Team Bonding

In order to run a truly successful team, you need to give them opportunities to build trust and develop relationships with one another. While there are ways to do this virtually, it tends to happen more organically in the office. This also gives employees the opportunity to network, which can help them advance their careers in the long run. 

Morale Boost

Working together in an office can also help to boost morale for your team. Many people struggle to stay motivated when they are working by themselves for an extended period of time. Having others around who are focused on a common goal helps your team stay motivated, productive, and excited about the work they are doing. 

Access to Technology

Technology is essential to the daily workflow of people in many different industries. Often the advanced technology available at the office isn’t practical for employees to take home with them. When you have your team in the office, they will have access to the technology that they need to do their jobs to the fullest capacity. 

Work/Life Balance

Working in an office every day is actually very important for work-life balance. Many people are surprised to find that it can be very difficult to separate work and personal life in a home office. When you’re working from home, it can be difficult to take breaks or detach at the end of the workday. When you’re working in the office, you can leave work at work and spend your evenings with those you care about. 

Safe Office Space Layouts to Try

Reorganizing your office space during the pandemic can significantly reduce your team’s risk of spreading COVID-19 when done effectively. Of course, you’ll also need to have other health and safety measures in place in your office rentals. These could include mask wearing, reduced capacity in your space, regular hand-washing, and sick days available for those who are experiencing symptoms. Here are some of the best office design ideas to reduce the risk of spreading COVID-19. 

One-Way Traffic

One of the biggest potential risk points in any office is when employees have to be within a six foot distance of each other. This is when there is considerable risk for transmission. This can happen when employees are walking through the space and crossing paths with each other in the hallway. 

A good way to minimize the risks here is to set up your office so that employees only walk in one direction. This makes it much easier for them to stay six feet apart from each other. Set up designated entrances and exits, with a path that makes a loop around the office. The pathway should be clearly designated with arrows and social distancing markers to remind your employees which way to go. 

Larger Workstations

Increasing the size of each employee’s desk can not only help them be more productive at work, but it can also ensure a safe six foot distance from nearby employees. Many companies are even opting to implement plexiglass dividers between each desk to catch the droplets that could cause transmission. Large individual workstations also allow teams to work near each other instead of being in separate rooms. These large workstations with plexiglass barriers or other dividers can serve as a new take on the cubicle. Cubicles are coming back into fashion during this time, because they give employees enough space and privacy to stay safe. 

One of the challenges of implementing larger workstations for each employee is that it can limit your space. If you don’t have enough room for your entire team to be in the space at once, consider having your team members alternate between working from home and working at the office. Make sure you are sanitizing workstations in between use to prevent transmission between employees who share them. 

Accessible Meeting Spaces

One of the biggest benefits of working in an office is being able to connect with other team members in person. Your team is going to need plenty of comfortable and safe meeting spaces to connect. These meeting rooms should be large enough that employees can sit at least six feet apart. They should also be well ventilated and have minimal shared surfaces. For example, you can opt to put two desks in your meeting rooms instead of one long table. If possible, you can also opt for doors that open automatically and lights that turn on with sensors. Keep the capacity for your meeting rooms low to avoid transmission, and ensure that they are sanitized on a regular basis throughout the day. 

Multiple Hand-Washing Stations

Employees should be washing their hands throughout the day, or at least using hand sanitizer. However, if you only have one kitchen or one bathroom, that space can get crowded very quickly. To ensure that employees have plenty of opportunities to wash their hands, place portable sinks at key points throughout the office. In the same vein, consider having multiple small fridges and microwaves throughout the office instead of one kitchen that sees a lot of traffic. This reduces the amount of people who come in contact with these pieces of furniture. In general, having lightweight, portable pieces of furniture makes it easier to rearrange the office when you need to. 

Reduce Density in Open Floor Plans

An open office floor plan can foster creativity and collaboration. While it may not seem like they could work in a post-COVID world, a little creativity can help you keep your open office without putting your team in danger. The key is to reduce the density of your open office by cutting back on tightly packed desks, so there’s room for employees to walk through while still staying at least six feet away from anyone sitting down. If you have multiple employees working at the same desk, make sure they are on either end so they can be six feet apart. Depending on the type of building you are working in, open office plans can also be much easier to ventilate with open windows, air filters, and fans. 

Safe Reception Area

If your office has a reception area, you can use it as a place to enforce COVID safety protocols during this time. When employees or visitors enter the space, you can have them visit reception for things like a temperature check, hand sanitizer, and an introduction to the building’s safety protocols. Prevent people from congregating by using signage to help keep visitors six feet apart. 

The COVID-19 pandemic has presented hurdles for companies in many different industries. Giving your employees the opportunity to work in an office space when they want to has so many benefits. Not only can it help your team members work more comfortably and be more creative, but it also improves your company’s productivity and performance as a whole. When you find an office space for rent in Clifton Park, NY, it’s important to set it up in a way where each team member can maintain at least six feet of distance from each other while in the office. 

Best Ways to Find Commercial Space for Rent

Best Ways to Find Commercial Space for Rent

Finding office space for rent isn’t always as easy as one might expect. Jumping at the first available office you see might seem like the easiest route, but be careful with that – the terms of those offices for lease may end up being unattractive and expensive. When you rent an office for your business, you are paying for much more than space; instead, you are making an investment into a space that will help your business thrive and improve your bottom line. If you’re in the Clifton Park area, here are some tips you can use when looking for a commercial property for rent. 

Network with Business Owners

First of all, it is never a bad idea to reach out to other business owners and ask them about the office space they are leasing. Many are often aware of available office space or of commercial property that is going to be available soon. Business owners – especially small business owners – talk to each other and get information on the businesses and properties around them. You can search for business networking groups in Clifton Park or you can join online forums and Facebook groups geared towards small business owners helping one another. 

Perhaps the most valuable thing when talking to other business owners is that they can describe their own experiences with certain landlords and property owners. The owner that leases space to tenants is more crucial to a business’s success than one might think. “Bad” property owners can cause drama and issues that interfere with your ability to run your business, so if several local business owners give you negative feedback on a certain owner, it might be best to steer clear. Positive reviews of owners, on the other hand, can make your final decision much easier. 

Drive Around the Market

You could walk, too. Simply getting in your car or scouring the area on foot looking for office rentals is never a bad idea and will give you an idea of what your office might look like and the areas you think it would be the most successful in. Driving and walking around the areas will allow you to locate office rentals that you may not be able to find online or through networking. While this may seem sort of boring, it is a critical part of your business’s future.

Ask questions, too. If you come across a busy commercial building that has one or two offices boarded up, try to find out why. Oftentimes, there is nothing wrong with them and they are just not leased at the moment so they may be the perfect fit for you. Of course, we often see “For Lease” signs all over, so calling the numbers and talking to the owners/landlords may give you a sense that you have found the right property. 

What to Know Before Signing That Commercial Lease

There are many factors you need to know the ins and outs about before you pick the right commercial space for rent. First and foremost, don’t settle. Take your time (if you have it). Choosing office rentals is kind of like closing on your new house – it is an investment that needs to be made carefully. Good property owners will understand if you need to take a couple extra days to look over the lease agreement again before signing it, and they will also not be offended if you decide to have a contractor come assess the property, too. Be sure to know the tenant rights in your area, too.

Many owners will also understandably tack on more fees in addition to the rent, which can include everything from landscaping to cleaning and utilities. Commercial leases normally identify these as “TMI” in your lease agreement – it stands for taxes, maintenance, and insurance. While these are normally reasonable and fair, you need to read through them thoroughly to make sure. If you have an attorney, it might be worthwhile to have him or her look through the terms as well. 

If  the terms of the lease are not clear or if  the owner makes you feel uneasy, it might be best to walk away. Even if you think the first place you look at is “the one,” you may still want to keep looking. Visit a few places, do your research on the various neighborhoods you might want to lease an office in, and stay open minded.

Overall, it takes time to find the right commercial property for rent, so prepare for that when you are looking for a new space for your business. If you network enough and do in-depth research and due diligence, you should definitely be able to find the right space for you. 

Featured Image Credit: pixel2013  / Pixabay

Commercial Leasing Tips

business-962355_1280

Commercial leases are often longer than residential ones, sometimes lasting as long as 10 years. It’s important to read and thoroughly understand any lease before signing. As a business owner, you should familiarize yourself with the clauses and provisions most commonly found in office leases. Here are a few things to consider when selecting commercial office space for rent.

Operating Expenses

When you sign a commercial lease, you’ll typically be paying operating expenses in addition to base rent for space. These operating expenses can vary widely depending on the building you’re in – and your landlord. Paying these operating expenses is a necessary cost of doing business.

It’s important that each operating expense you’re being charged for is clearly defined in the lease. Any room for ambiguity can lead to unnecessary misunderstandings. Some of the most common operating expenses include utilities, waste removal, building maintenance, landscaping, and property taxes.

Square Footage

Another important thing to look at when signing a lease is the square footage. You’ll want to make sure that the square footage correlates with your needs. Of course, it’s difficult for any company to use the full extent of the square footage they’re given, as you may be limited by office configuration or architectural features of the building.

Rent

It’s normal for commercial tenants to see rent increases over the course of their lease. This is because the cost of running a building goes up over time. However, it’s important that the method for calculating rent increases is clearly defined in your lease.

The Takeaway

When looking for an office space to rent, it’s important to make sure that it’s a truly great fit for your company. Office rentals can be a big investment, particularly for small and growing companies. Before signing a lease, you’ll want to feel completely confident that your new office space is going to provide real value for the money.

 

Featured Image Credit: Edar / Pixabay

How Much Does It Cost to Rent Office Space?

cost-to-rent-office-space

Whether you have an established small business or you’re a solopreneur just getting started, you can benefit from renting your own office space. Having a dedicated office space for your company can help you be more productive and provides a professional space to hold meetings in. The cost of your office space can be one of the largest expenses you’ll take on as a business, so it’s important to budget for it ahead of time. Here’s what to expect when renting an office space. 

Benefits of Renting an Office

The internet has enabled workers in many industries to start working from home, but there are still so many benefits to working in an office. Many people find that having a dedicated office space helps them be more productive. Being away from the distractions of home, like family and hobbies, can make it easier to work efficiently. 

Having a dedicated office space can also be incredibly important for work-life balance. When you work from home, it can be difficult to separate work and leisure time. For many people, this means it’s harder to rest and recharge. With a designated office space, you can set a defined work schedule that leads to a more comfortable work-life balance, with more time for family, friends, and hobbies. 

If your business has multiple employees, working in an office is also one of the best ways to foster a strong community culture. It’s much easier to collaborate, be creative, and solve problems when you are all working together in the same space. Working together every day also helps your team develop a strong bond and keeps morale high. Working in a group also helps your team learn from each other, so you can all expand your skill set and get more done. 

How much does office space cost? 

The cost of an office space can vary depending on where you live. Office space rental prices are typically calculated by square foot. This means that larger offices will cost more per month. Commercial offices may have longer leases than residential properties. Some leases are paid monthly, while others are paid on a yearly basis. 

Office space rentals in the US average anywhere from $1 per square foot up to over $6 per square foot per month. The cost of an office space is dependent on several different factors, including the location and the quality of the office space. For example, newer office spaces with more amenities are typically more expensive than older properties. 

The average cost of office space in Clifton Park, NY is between $1 and $2 per square foot per month. This is fairly standard for office spaces in suburban and rural areas. However, the cost of an office space can go much higher in urban areas. For example, office spaces in New York City average over $6 per square foot per month, while San Francisco averages over $5 per square foot. However, other cities are more affordable, with Chicago averaging approximately $3 per square foot, and Atlanta and Dallas both averaging between $1.50 and $2 per square foot. 

The cost of a rental will also vary depending on where you are in the city. Offices in central business districts with access to retail, restaurants, public transportation, and parking will be more expensive than offices that are hard to get to or don’t have any shops or restaurants nearby. The crime rate in the area can also affect the cost of an office space – offices in high crime areas are often (but not always) more affordable. 

What to Consider When Renting an Office

There are so many factors to consider when renting an office. An office space is a major investment for your company, so it’s important to make sure that the one you choose is a good fit for your company. 

The first thing to consider is the amount of space itself. Generally, you’ll need between 75 and 200 square feet per employee. The exact amount of space you need will depend on your budget as well as the type of work you’re doing. If you need extra equipment beyond just a computer and a desk, you’ll need to make sure you have enough space for it. 

Of course, you’ll also need to make sure the office fits into your budget. This is a particularly important consideration for businesses that are just starting out. While office space can be expensive, you’ll need to make sure it isn’t a hindrance to your business. This may mean a smaller office space or sacrificing some amenities. 

You’ll also need to weigh the costs of a monthly lease or a yearly lease. If your company is growing quickly and you anticipate needing to move offices in a few months, a monthly lease will provide you the flexibility you need. However, a yearly lease can be a more stable option if you’re looking to stay in the same place for a long time. 

Finally, you’ll need to consider the amenities offered. Every company has different priorities when it comes to their amenities. For example, some prefer an office that allows 24 hour access with security. Other popular amenities to look for include a break room, designated meeting spaces, and secure parking. 

As your business grows, renting an office is the best way to ensure that your company has a safe, comfortable, and productive space to work.
  

Featured Image credit: mohamed_hassan  / Pixabay

Your COVID-19 Return to the Office Safety Guide

U.S. Air Force client system technicians from the 17 Communications Squadron review work request tickets for computers around base while maintaining a social distance in the COMM building on Goodfellow Air Force Base, Texas, April 22, 2020. The Airmen fixed and solved computer issues on-site and in the field, which instilinged mission readiness while adhering to the Center of Disease Control guidelines during the COVID-19 pandemic. (U.S. Air Force photo by Airman 1st Class Abbey Rieves)

For the last several months, offices around the US have been shut down due to keep employees safe from the spread of COVID-19. Now, many cities and states are starting to lift their stay-at-home orders as case numbers go down. For many offices, this means it’s time to get back to work, but it’s important to do so safely. While COVID-19 cases are down in many areas, the disease has not been eradicated, and can still cause serious health problems. In this article, we’ll walk you through the steps you need to take to keep your employees and clients safe when working in your Clifton Park office

Review your City and State Guidelines carefully prior to Opening. 

As the economy is reopening, local and regional governments have put out strict, clear guidelines for going back to work. It’s crucial that you follow these guidelines at your office – a failure to comply could not only get your employees sick but could also result in your workplace getting shut down by the government. Before you open up, read through these guidelines carefully and clarify which safety measures need to be taken. Do workers need to wear masks? Should you operate at less than full capacity? It’s worth taking an extra few days to open to make sure you’re really clear on all of the requirements that need to be met. Now is also a great time to review your OSHA guidelines and other best practices for workplace safety. 

Give Employees the Flexibility they need to take care of themselves. 

When reopening your office, your first consideration should be your employees’ health. The first step should be establishing a robust sick leave policy so that employees don’t have to choose between their health and a paycheck. Make sure employees know that they can take time off or work from home if they feel even the slightest bit sick. Although sick leave can be expensive up front, it will likely save your company money in the long run. This is because it can prevent a large outbreak that would dramatically hinder your company’s productivity. 

You should also make sure you have a plan in place to protect workers who are older or immunocompromised.  Ask them about their comfort levels, and let those who can work remotely continue to do so. This not only helps those who are most at risk stay safe, but it also gives people the flexibility they need to take care of their kids or assist older family members who may have been affected by COVID-19. If it is not possible to work from home, start with a staggered opening. You can do this by strategically dividing your team into two or three groups, and having each group come in only on certain days. 

Make sure Employees are Educated on COVID-19. 

Before your team starts working again, it’s important to make sure they are fully informed about COVID-19 and how it spreads. When employees are fully aware of the signs and symptoms they need to watch for, they will be less likely to contract the disease or spread it to others. Discourage handshakes and hugs, and avoid all unnecessary travel, as this can help to reduce the spread as well. You should also encourage or even require your employees to wash their hands at various points throughout the day. These seemingly small changes can make a big difference when it comes to fighting the spread of the coronavirus. 

Encourage Employees to get tested regularly. 

To make sure your workplace continually stays healthy, it’s very important that employees are regularly tested for COVID. Since many cases are asymptomatic, it’s very difficult to know for sure if someone has the virus without getting a test. Make sure your employees know where the nearest testing center is and how to schedule a test. You should also give your employees time off to go get tested safely. Depending on the industry you are in, you may even choose to mandate that employees get tested on a regular basis. 

Make it easy for Employees to maintain their distance. 

One of the best ways to prevent the spread of COVID-19 is to ensure that employees can keep a distance of at least six feet from each other while at work. This may require some reconfiguring of your office space. Move desks away from each other and use tape to create clear walkways throughout the office. You may also want to put up shields around each employee’s individual workspace, and encourage employees to wear masks when they do have to be near each other. Since COVID-19 transmits through the tiny water droplets we exhale, these measures can help to prevent the spread. 

Implement a strict Cleaning Schedule. 

One of the most important parts of returning to the office safely is making sure that your surfaces stay clean. Shared surfaces like door handles and communal tables should be cleaned as frequently as possible. It’s also important to clean tools like phones and computers and avoid sharing them with other employees whenever possible. Keep hand sanitizer and disinfectant wipes readily available throughout the office to facilitate this process. You should also talk to your office rentals landlord to see how they are approaching the sanitation process. 

Since COVID-19 presents very real health risks, it’s very important that offices put safety measures in place before reopening. It’s worth investing extra time and energy to educate your employees and keep your space clean – this will allow you to go back to work while also staying healthy.

5 Things To Consider When Leasing Office Space

woman employee working in a commercial office space

A good office space is a very important investment for your company. It’s where you and your employees will be spending most of your working hours, so you’ll need it to be a space where you can feel comfortable and be productive. It’s also a space where you might be bringing clients, so it should be a good representation of your company and what you have to offer. With so many office spaces for rent, it can be difficult to find one that’s a good fit for your company. Here are five key things to consider when selecting an office space for your company.

1. Budget

The first thing to do when searching for an office space for rent is to determine how much you can afford to spend. If your rent takes up too much of your monthly operating costs, it will be difficult for your business to get ahead. On the other hand, you typically get what you pay for with office spaces, and if you aren’t willing to spend enough money, it will be difficult to find a unit that has the space and features that you need. 

The goal is to find a happy medium where you aren’t overpaying, but you’re spending enough to get the right fit for your company. Keep in mind that cheaper isn’t always better – in many cases, it’s financially efficient to spend a little bit more on rent in order to have a space where your company can truly be productive.

2. Location

Once you’ve come up with a budget, you’ll need to decide on an appropriate location for your office. In addition to having properties that fit within your budget, you’ll need to consider the convenience factor for both your employees and your clients. Think about where your employees live and how far they would need to commute to get to work. If you have employees that prefer to take public transportation, consider your proximity to nearby subway or bus stops as well. 

It’s also helpful to look for an office space with amenities nearby. This can help you attract clients as well as valuable employees to your business. For example, your employees will likely appreciate having a coffee shop on the same block, or a park nearby that they can walk to on their lunch hour. You should also consider the overall quality and atmosphere of the neighborhood and whether it fits with what you’re looking for. Do you prefer something in a suburban neighborhood like Clifton Park, that’s convenient and safe, or are you more interested in the hustle and bustle of a dense urban area? Both have their advantages and disadvantages, and it’s up to you to decide what makes the most sense for your business. Browse for more Clifton Park office rentals.

3. Utilities

It’s also very important to consider the utilities and other features that your office space can provide. In particular, it’s important that you have a reliable internet and phone connection. Many office complexes now include the cost of your internet connection in your rent, but not all do, so be sure to ask when you’re looking at office spaces for lease. You should also ask about the cost of basic utilities like electricity, water, and waste management, and make sure you understand how they are managed. Consider any other features the building has to offer as well – some office complexes will manage your mail for you or even have door security staff. These features can add extra value to your company.

4. Size

The size of your office space is another key factor to consider. Typically, the size of your office will directly correlate with the amount of money you spend in rent. It’s important that you have enough room for your employees to work comfortably. If your company is small and your employees can work in communal spaces, then you may be able to work in a tight space. However, if you need meeting rooms or individual offices for some of your employees, then it’s going to be worthwhile to invest in a larger space. 

It’s very important that your employees can work comfortably and that they don’t feel cramped while they’re at work. At the very least, you will need to fit every employee’s desks and chairs into the space and still have room to walk around. It’s also helpful to add in a comfortable reception area for clients as well as a break room for your employees. Remember, your team is going to be spending hours at the office every week, so it’s worthwhile to invest in a comfortable space.

4. Design and Atmosphere

The final thing to consider is the design and look of your office space. Remember that your office is a representation of your company, and you’ll want to make a positive impression. Consider the layout of the space – is it open and easy to navigate, or are there lots of confusing hallways? Do windows let in enough light, or does the space feel dark? It’s important that the office feels welcoming, or it won’t be a comfortable place to work

You’ll also want to find out how the property feels about customizing the office. Can you renovate to make the space more appealing? With more flexibility, it’s easier to transform your office into a space that really reflects your company’s identity. It can also help to research the other tenants in the building and see if your company fits in. The building will serve as the first impression for your clients, and the other tenants are part of that first impression. 

Finding the perfect office space can take some time. It’s important to consider many different options before making a commitment. Since your office space is such an important part of your team’s operations, it is worthwhile to spend your time and money in a place where you can really be productive.

Image Credit: pxhere / CC0 Public Domain

Coronavirus Small Business Loan Program: What To Know

Coronavirus Small Business Loan Program business handshake over the table

 

What is the Paycheck Protection Program (PPP)?

As of April 3rd, Congress passed legislation that allocates $350 billion in loans to small businesses as part of the Coronavirus Small Business Loan Program which covers Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Known as the Paycheck Protection Program (PPP), the initiative provides 100% federally guaranteed loans to small businesses through the Small Business Administration (SBA).

The PPP is meant to support small businesses through the economic hardship placed on them during the COVID-19 pandemic. Its primary purpose is for small businesses to maintain payments to employees, as well as cover other essential business expenses such as rent, mortgage interest, and utilities.

Many questions have arisen around the newly formed program and are addressed below.

Who is Eligible?    

The SBA PPP website says the following are eligible if affected by the coronavirus/COVID-19:

  1. Any small business with less than 500 employees (including sole proprietorships, independent contractors, and self-employed persons)
  2. Private non-profit organizations
  3. 501 (c)(19) veterans organizations
  4. Certain businesses in the hospitality or food industry with more than one location could be eligible if their individual locations employ less than 500 workers.

Where do I Apply?

Not every bank and the traditional lender is going to be authorized to issue these loans. The SBA has an approved list of lenders and has set up guidelines for other institutions that may be interested in taking part.

A complete list can be found on the SBA page found here.

Due to the sheer volume of applications being submitted, many banks and lenders are only allowing applicants that have an existing business account with them currently to participate, but this is a case by case situation.

Concerns have been raised that businesses with no prior history of borrowing will have a harder time receiving what may be a necessary loan for them.

Lawmakers have made it clear the current guidelines are still malleable, however until any changes are made, the funds are only available as long as the $350 billion lasts.

When Can I Expect the Loan?

This depends on your lender. The loan is meant to be immediate relief to business owners. It was originally promoted as taking only a single day to receive funds once approved.

However, many lenders are being clear before you apply that it isn’t certain how quickly they can get the money to the businesses. This is due to the sheer volume of requests and new guidelines that many lenders are working through.

Loan forgiveness?

The SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

In order for the full loan to be forgiven, at least Three quarters of the amount must be used for payroll. Forgiveness will be reduced if salaries are decreased or the number of full-time employees is decreased.

If employees have already been laid off, they must be rehired by June 30th in order to qualify for total loan forgiveness.

All loan payments (for expenses made outside of the loan forgiveness parameters) are deferred for the next six months. The loan has a maturity of 2 years and an interest rate of 1%.

How Much Money Can Small Businesses Receive?

They can get up to 2.5 times their total monthly payroll (with a maximum of $10 million). The payroll amount is derived from expenses before the pandemic.

There are also a couple of stipulations when calculating this amount. The amount is based on employees paid $100k or less. If an employee is paid more than $100k, they are only counted towards this loan amount up to $100k.

     Example: Employee 1 makes $175,000
                            Employee 2 makes $88,000
                            Total amount to claim for payroll is $188,000

 
All guidelines can be found in the SBA’s Interim Final Rule here.

Q and A

Q. I have a small business that requires I rent office space, but I do not have an existing relationship with a lender as I have not had to borrow money before now. Do I qualify for the PPP?

A. As long as you meet the SBA’s requirements, you do qualify. Your next step is going to be to find a local lender and connect with them. Many are in the beginning phases, and while some are only working with existing customers, many others are simply taking basic info to connect on a first-come, first-serve basis.

Q. I have a qualifying small business in Clifton Park, NY. Where can I find a local lender approved for the PPP?

A. On this SBA page, you can enter your zip code and it will pull up lenders in your area authorized for PPP loans.

Q. I signed up on my bank’s website to apply and haven’t heard anything back, what should I do now?

A. Many lenders have made it clear that they are currently taking basic information and are managing a large number of requests on a first-come, first-serve basis. Your lender should be keeping you updated with periodic notifications, but there is no guarantee of when they will get to your application. Many are ensuring their customers that they are working continuously to manage the workload.

Q. What other assistance is available to my business in addition to the PPP?

A. The SBA has two other programs listed on their site in response to the pandemic. The first is disaster assistance, which is available to qualifying small businesses in all U.S. states, Washington D.C., and U.S. territories. The second is Enhanced Debt Relief, a program to help small businesses overcome the challenges created by the pandemic.

Q. Can I fill out the application directly on the SBA’s website?

A. No, you must go through an approved lender. However, they do have an example application you can download. It is currently only two pages long and much less information is needed than a traditional loan.

Q. Do independent contractors count as employees for purposes of PPP loan forgiveness?

A. No, independent contractors have the ability to apply for a PPP loan on their own so they do not count for purposes of a borrower’s PPP loan forgiveness.

Q. Can I use my PPP loan to purchase commercial real estate to hire new workers?

A. The loan is designed to maintain current workers and bills. Only qualified expenses will be entitled to loan forgiveness.

Featured Image Credit: ccfb / Pixabay

7 Hidden Costs of Running a Small Business

7 Hidden Costs of Running a Small Business

There are so many great things about running your own business. You get to be your own boss, and you can focus on products and services that you are truly passionate about. However, there are many hidden costs that come with running your own small business. Before you start your own company, it is very important to understand the financial challenges that come with being a business owner, so you can prepare accordingly. You likely already know that you’ll need to hire employees, get an office space for rent, and advertise your company. However, there are also plenty of smaller costs of running a business that you may not have considered. Here are seven hidden costs of running a small business that you’ll need to work into your budget.

Business Permits

No matter where you live, you’ll need to get the appropriate permits to run your business. Laws differ between cities and states, but generally you’ll need to pay for a permit to do business in your area. Depending on what industry your business is in, you may also need to pay for a professional license. These documents need to be renewed regularly, often every year or every few years. You’ll need to add these licensing fees into your yearly budget to ensure you don’t get blindsided by additional costs later on.

Insurance     

It is very important for your business to carry insurance. Not only is it required by law in most places, but it will protect you legally and financially in the event of an accident. You’ll need to pay for liability coverage to cover your customers and your employees, but it’s also worthwhile to invest in additional coverage for negligence and property loss. A good independent insurance agent can help you find an insurance policy that makes the most sense for your company, depending on where you are, what industry you’re in, and what kind of customers you attract. Make sure to budget for insurance payments each month to make sure you’re covered. Keep in mind that many insurance providers offer discounts for consistent customers. Don’t be afraid to negotiate with your insurance provider and ask them how you can save money.

Employee Benefits

You’ve probably already considered the cost of paying your employees’ salaries, but many people forget that they need to offer benefits as well. It’s important to offer your employees perks like insurance and paid time off, in addition to a fair salary. When employees are treated well, they are much more likely to stay with your company, which reduces turnover costs. You will also need to factor in the costs of training both new and existing employees. Investing in good training tools ensures that your employees stay productive as technology advances. You should also factor in the costs of hiring independent contractors as needed. Sometimes the best way to get something done is by using a specialist, which is where independent contractors can be very helpful. However, they can be expensive, which is why it’s so important to budget for this ahead of time.

Equipment and Maintenance

Every small business requires plenty of equipment to get started. Just furnishing your office rentals can get expensive quickly, as you’ll need furniture, computers, and printers, plus you’ll need to maintain a set of basic office supplies, including paper, pens, folders, and more. Of course, you’ll also need to purchase any equipment that’s specific to your industry. The cost of industry specific equipment can add up quickly, which is why it’s so important to factor this into your budget from the beginning. You’ll also need to add in the costs of maintaining your equipment, particularly if repairs need to be done by a specialist. A broken piece of equipment can quickly slow your company’s productivity to a halt, which is why it’s so important to include maintenance in your monthly budget.

Delayed Payments

One of the most aggravating things about running a small business is dealing with late payments. Maybe a customer’s card declines or their check bounces, or one of your largest clients simply forgets to pay their invoice. While it may not seem like a big deal to your customers, it can affect your ability to pay the bills. When possible, it’s important to put money away to cover potential losses in the future. You should also make sure you set clear terms with clients when setting up a contract, and charge late fees for missed payments. This can help you avoid cash flow problems in the future.

Shrinkage

If your business focuses on selling physical goods, you’ll want to make sure you account for shrinkage when planning your budget. Shrinkage is a loss of inventory before it can be sold, and while you can take steps to minimize your shrinkage, it’s hard to prevent entirely. The best ways to prevent shrinkage are to keep very careful track of your supplier orders, and to make sure you’re doing regular inventory checks. Having a reliable system in place for tracking your orders will minimize your chances of experiencing inventory loss.

Loan Payments

It’s normal for business owners to take out a loan to get their company off the ground. However, your loan payments may end up eating away at more of your budget than you had initially bargained for. Loan payments can come with high interest rates, particularly if you don’t have good credit. If you miss a payment at any point, you can end up with late fees that hurt your budget even more. When taking out an initial loan, be sure to consider the long-term costs and how they might affect you going forward.

These hidden costs can make running a small business challenging, which is why it’s so important to include them in your business plan. Although running a small business can be expensive, it can also be very rewarding. Over time, you’ll learn how to budget for your business effectively to avoid cash flow issues and surprise bills.

Featured Image Credit: qimono  / Pixabay

How to Avoid Common Commercial Leasing Mistakes

How to Avoid Common Commercial Leasing Mistakes

As a business owner, entering your first commercial lease can be both exciting and scary at the same time. Specifically, the process of leasing commercial space coupled with finalizing the lease agreement can be somewhat confusing to the novice business owners who have no experience with the process. The elements of a commercial lease aren’t all the same, so business owners shouldn’t erroneously assume that they will be. While there are state laws out there that deal with leases, very few of those laws apply to commercial tenants. As such, prudent business owners should conduct some research and study to avoid common commercial leasing mistakes.

Start your search at least six months in advance

Do not put off searching for commercial space until the last minute, or you will probably be disappointed. Typically, when searching for commercial space to rent under 10,000 square feet, tenants should start looking at least six months ahead of time. Truthfully, in some unique situations, it may be beneficial to begin searching for up to a year ahead of time. Additionally, the office space will probably need to be remodeled or renovated, so commercial tenants should factor this time into their scheduling and planning accordingly. As a general rule of thumb, the larger the space that your business requires, the longer time you should give yourself to find a space. Overall, you’re only doing yourself a disservice to your business by not allocating enough time to find a commercial space.

Understand your business and office space needs.

As a business owner, you should develop a plan and define your goals with your team. As you consider commercial space/office space, you should ensure that you are staying true to your “brand”. You should ask yourself questions such as, “does this space fit my company image?” “Does this space make the right first impression to my customers and clients?” “Does this space facilitate a happy company environment?” Additionally, together with your operations manager or team, you should think about your preferred layout. Consider whether you’re looking to create a collaborative office space for your team or desire private offices and whether you want modern office decor or traditional office décor etc.

Moreover, while searching for commercial space, you should hire an architect to get a clear understanding of just how much space your business needs. Specifically, an architect can clarify the office layout and design of the space to hone in on your office square footage requirement. Further, an architect can develop a plan that aligns with the company’s growth forecast and evaluate whether the office will still meet your company’s needs in 5 or 10 years. Overall, by enlisting the help of a professional architect, a business owner can avoid having too little space, which is terrible for employees or having too much space, which is costly.

Double Check Your Monthly Operating Expenses

Most commercial leases charge each tenant a base rent amount as well as a percentage of the building’s monthly operating expenses, which typically includes common area maintenance charges (CAM). CAM charges are the building expenses that each tenant benefits from; they include things such as garbage removal, janitorial services, security services, etc. Make sure you know precisely what items make up your additional costs each month before signing your lease. Lastly, do not forget about the Real Estate Taxes. As a business owner, you should make sure you understand what percentage of the building’s real estate taxes that you will be responsible for paying. Specifically, make sure you understand and agree with both the proportional share as well as what effect an increase in taxes will have on your portion of the real estate taxes under the lease agreement.

Hire a Professional Team

In addition to hiring an architect, companies should also consider hiring an engineer and a lawyer. For larger companies, a project manager may also be needed to facilitate the lease agreement. The project manager can serve as a single point of contact for the business. Specifically, the project manager will work with all departments, including human resources, finance, and IT departments, throughout the leasing process.

Conduct Due Diligence

One common mistake with a commercial lease is the business owner’s failure to conduct due diligence on the property. When business owners are excited about leasing new space, they sometimes tend to overlook red flags or cut corners altogether, which can be a costly business mistake. Once you find a space that you are interested in, you must conduct due diligence on the property to ensure that the office meets your business needs. As such, business owners should get basic things inspected, such as the property’s electrical wiring, and plumbing. The building’s mechanical infrastructure, including the HVAC system, should also be evaluated, especially in older buildings. Overall, all appliances and equipment should be inspected, even if the landlord says they are all in good working condition. Lawyers and engineers can work together to confirm that the office space meets all safety codes and is ADA compliant.

Evaluate the Location, Location, Location

Location can be a business asset or liability. Business owners should be very familiar with the location of their new commercial space. Business owners should strive to make the location as convenient as possible for employees who rely on public transportation to commute to work. It is also advisable that business owners consider amenities in the neighborhood. Are there coffee shops around or quality restaurants nearby for lunch on places to entertain clients? Lastly, business owners may want to consider the safety of the neighborhood to ensure that they are not compromising safety for a lower price.

Overall, business owners must have a plan and be disciplined throughout the leasing process. Owners should be obsessive about planning, clarifying objectives, poring over lease details, and hire a team of experts to have a positive commercial leasing experience.

Featured Image Credit: SnapwireSnaps  / Pixabay

What Percentage of Revenues Can you Expect to Pay for Commercial Rent?

What Percentage of Revenues Can you Expect to Pay for Commercial Rent

One of the most substantial operating expenses for a brick and mortar business or any business that requires office space is the cost of renting commercial space.  Before searching for office rentals, you must understand what expenses you can expect to incur.

The cost of commercial property is dependent upon numerous factors, including the city, location, and size of the commercial space that you are seeking. In this article, we will briefly discuss the various cost associated with commercial leases and the calculations that you should conduct prior to committing to a commercial lease.

Commercial Property Rental Rates

During your search for commercial property to rent, you will see advertisements, which may include figures such as “$50/SQFT.” This figure means that the rent is fifty dollars per square foot per year. Once you know the square footage of the commercial office space, you can then estimate your annual and monthly rent cost. In general, it is recommended that you allocate a minimum of 100 SQFT per employee. As such, you can calculate the number of employees you have (or expect to have) to estimate how much office space you need.

However, please note that this is just a starting point ora basic rent calculation, which is the cost before other expenses (i.e., utilities, maintenance fees, etc.) are calculated. Additionally, the building that the office rental is located in will impact the additional cost that you may incur. For example, a building with a doorman or luxurious lobby will increase the cost of the office rental.

In any event, your lease will define the additional costs you’re responsible for, but as explained below, each type of commercial lease agreement is different.

Different types of commercial leases

A gross lease is where the tenant pays a flat or fixed amount of rent, and the Landlord is responsible for expenses incurred in operating the building. As such, the Landlord pays the taxes, insurance, special assessments, etc.

A net lease is where the tenant pays the rent, and some defined percentage of the taxes, insurance, and maintenance fees.

A double net lease is where the tenant pays the rent, taxes, and insurance.

A triple net lease is where the tenant pays the rent, taxes, insurance, and operating cost. The triple net lease is commonly used in shopping malls. 

A percentage lease is where the tenant’s rental rate is based in part on the gross sales made by the tenant on the premises. (e.g., a landlord receives $1000 per month and base rent and 5% of the total monthly profit). Percentage leases are commonly used in retail spaces

Step rent commonly referred to as “step-up rent” or a “step-up lease” is a clause in a commercial lease agreement where the rent may increase at specified periods during the tenancy.

For example, a step-up clause may indicate that the rent will increase by $100 per year to account for inflation. The methodology used for calculating step-up provisions varies from lease to lease. For example, the additional rent can be calculated as a fixed dollar amount, or it might be a percentage increase tied to a consumer price index, etc.

Your broker can help negotiate the terms of any rent increases or step-up rent provisions.

Usable Square Footage vs. Rentable Square Footage in Commercial leases

To avoid confusion during your search for commercial space, you must remember that there is a difference between the usable and rentable square footage of commercial space.

Usable square footage

Usable Square Footage only includes the square footage that is exclusively for use by you, the tenant. The usable square footage calculation is what you should use to determine whether a potential space will meet the needs of your business. Typically, an office rental’s usable square footage isn’t advertised.

Rentable Square Footage

Rentable square footage includes usable square footage plus a percentage of all the shared office space in the building. This calculation contains things such as shared restrooms, cafeterias, the lobby, and stairways that your employees can use. Additionally, rentable square footage also includes areas that the tenants do not have access to, such as maintenance areas.

More than likely, in a commercial lease, the monthly rent will be calculated based on the rentable square footage, as commercial tenants are expected to help cover the cost of maintaining the entire building.

Loss Factor

Once you are familiar with the useable square footage and the rentable square footage, you can then calculate the “Loss Factor,” which is the percent difference between the usable square footage and the rentable square footage.

(RSF – USF) / RSF = Loss Factor

Essentially, the loss factor equation indicates the total “markup” on your monthly or annual rent. The Industry standards for Loss Factor vary by location and industry, but anything over 40 percent is usually considered excessive.

The Cost of Building Out an Office Space to Meet Your Needs

Unless you’re lucky to find space that already fits your needs, you may need to build out the commercial space you’ve chosen to meet your business needs. For example, you may need to transform a former restaurant into a retail space or vice versa. Sometimes, Landlords may contribute to the cost of renovations by offering rent concessions to give the tenant time to build out space before opening for business.

How to Calculate Your Target Rent Based on a Percentage of Your Gross Income

To ensure that you are keeping your rental cost reasonable, you can calculate your target rent amount as a percentage of your gross income. The standard gross-to-rent rate varies amongst different industries but is typically under 10 percent.

According to Hartman, one of Houston, Dallas, and San Antonio’s premier property management companies, the following are examples of standard gross-to-rent percentages from a variety of industries.

  • 46 percent: Gambling establishments
  • 12 percent: Gas stations
  • 09 percent: Electronics and appliance stores
  • 66 percent: Educational services
  • 82 percent: Finance and insurance companies
  • 19 percent: Arts, entertainment and recreation facilities
  • 21 percent: Food and beverage shops
  • 30 percent: Books, hobby, music, sporting goods stores
  • 37 percent: Health and personal care stores
  • 46 percent: Insurance agents and brokers
  • 86 percent: General merchandise stores
  • 52 percent: Health care and social assistance organizations
  • 81 percent: Food and drink establishments
  • 98 percent: Furniture and furnishing stores
  • 7 percent: Hotels, accommodations
  • 66 percent: Clothing and accessory shops
  • 55 percent: Ground transportation companies

How to Calculate the Percentage of Your Sales that will go towards your rental expenses

To calculate what percentage of your gross sales will go towards your rental expenses, use the following equation:

(annual rent/yearly gross income) =Percentage of Your Sales that will go towards your rental expenses

For example, let’s say your rent is $1,000 per month, and your gross annual income is $240,000.

  1. First, calculate the annual rental cost. ($1,000 *12) = $12,000
  2. Next, divide the annual rent by your gross annual income

If your annual rent is $12,000, you would then divide $12,000 by $240,000. ($12,000/$240,000) =.05

Your total would come to 5 percent

This percentage means that for every $1 your company earns, 5 cents go toward the rent.

Knowing this calculation is critical to determine the maximum amount of rent you can comfortably afford for your business. Specifically, this is helpful if you are looking to upgrade your commercial space, but you want to ensure that you still meet your income goals.

Featured Image Credit: By The Photographer / Own work, CC0