How to grow gracefully

When your small business expands beyond the home office

Part 1 of a 2-part series

Valerie Zucker never really wanted to work again from a traditional office.

After leaving a midsize South Florida public relations firm in November 2001, Zucker launched Zucker Public Relations from her Aventura, Fla., home. She had one part-time employee who frequently teleworked, a DSL connection and ample space to run her company.

But when her firm grew, she began hunting for commercial office space. She met an exec who happened to be looking to sublet part of his large office. Today, her new office space is wired for Ethernet, has DSL, covered parking, security, FedEx and New York Times delivery – and gives her small firm a more professional feel. The cost? $1,500 in rent, and another $1,500 in services, insurance and furnishings.

“More than anything, my company needed a good image,” she says. “To impress clients, you have to bring on more people, and that takes space.”

Many who start new businesses from home plan to stay there. Yet as the business grows, they find themselves in a pinch: They’re reluctant to bring on new employees, but they don’t want to stymie growth. Other conditions also emerge. Even if they decide to hire, does local zoning allow nonresident employees to work from the owner’s home? Does it allow clients to visit?

Several years ago, Elaine Fitzgerald faced a similar situation. She had been running Fitzgerald Productions, an event production and communications firm, from her three-bedroom townhouse in Margate, Fla. But over time, one client’s business had grown so big that Fitzgerald didn’t have enough space for all her filing cabinets. Worse, part-time employees and customers would come calling outside normal business hours, disrupting Fitzgerald’s personal life.

“It was a three-ring circus,” she says. “It became impossible to operate – let alone grow – the business unless I moved out.”

Fitzgerald weighed her options, then took a different path from Zucker’s. She wanted a short commute, and to avoid high rent and a long-term lease. She considered an executive suite, in which several tenants rent small offices or cubicles and share a receptionist and conference area, but the setting didn’t provide Fitzgerald the privacy and space she needed.

Fitzgerald then visited a number of storefront offices near her home. She spoke with several renters about subletting space to run her shop, and eventually found one who offered her 700 square feet of space – including Fitzgerald’s own parking and entrance in the back –for $450 per month. With the property owner’s approval, the deal was done.

Fitzgerald gained a reception area, kitchen, her own office, workstations for four employees – and ample space for her filing cabinets. Since, she’s moved the firm to a larger office to accommodate full-time staff and contractors who work from home and Fitzgerald’s office. Cost? $1,000 per month plus insurance, DSL and phone service.

“It’s still a three-ring circus, but at least I have more space,” she says.

Next time: Why pay commercial rent when virtual assistants can deliver work without taking up space?