Acquiring prime office space is often one of the most critical initial steps that startup enterprises take. With Maryland office space in high demand, fledgling ventures spend a lot of capital and energy searching for that ideal first “street address”. With all the challenges that lie ahead for new ventures, sharing office space in an incubator setting – at least initially – may be a better strategy.
What is the Maryland Office Space Incubator Advantage?
A business “Incubation space” is precisely what it implies: A supportive ecosystem to nurture and grow a fledgling business. With traditional commercial office spaces, there’s a typical competitor mindset that surrounds its occupants. Regardless of how long an entrepreneur spends looking for the right space, it’s likely that he/she ends up next door, or in proximity, to someone – perhaps a more established industry player – who is competing with the fledgling venture.
As they embark on their entrepreneurial journey, most startup ventures aren’t ready for full-fledged competition – at least not yet. They’re therefore placed at an early disadvantage:
- They need time to establish themselves
- They don’t yet know the ropes for doing business
- Teams require technology and infrastructure to compete effectively
- If they run into early turbulence, they need someone savvy to steer them right
- And they require access to capital, advice…and much more!
Most owners of office space in Maryland don’t offer convenient solutions to these situations. As a result, newly established (or establishing) enterprises have a dual challenge on their hands:
- They must quickly find, set-up, and organize their office space to deliver an optimum response to address the disadvantages alluded to earlier; and
- They must grow up fast, and start competing effectively with other businesses in their ecosystem
That’s a tall order to fill, even for more mature businesses. In a highly competitive commercial ecosystem, where winning at all cost is the number one priority for survival, that tall order is almost impossible to fulfil for fledgling businesses. And that’s where startups often benefit from the incubation space advantage. Where other, less prepared, newly established businesses dive head-on into competing and gaining market share – often unsuccessfully; business incubators focus on developing and growing a ventures’ competitive edge first. It is that advantage that provides a solid foundation for the venture to subsequently, and confidently, branch out (from the incubator) to compete successfully.
More Than Just Physical Space Considerations
Many new startups embrace a misguided strategy of prospecting for their “ideal” office space early on in their formative stages. The reality is that venture success isn’t directly linked to renting or owning physical office space. There’s a lot more groundwork required before fledgling businesses can ensure entrepreneurial success. True, a high-end street address might look great on websites and marketing pitches. But owning Maryland office space can be a double-edged sword, especially for a business looking to find its feet. That’s because, across the USA, rental costs are the biggest expense item for any business – be they established players or newbies.
Office planners estimate that the square feet required for a “typical” 10-person team is around 1200-square feet[i]. That estimate is based on a densely-packed office layout, with minimal common area. On the other end of that spectrum, is a spacious layout with above average common area space – which requires around 3,600sf. The average, however, is around 2,400 square feet.
[i] https://aquilacommercial.com/learning-center/how-much-office-space-need-calculator-per-person
Today, the average cost to rent an office in Baltimore, MD is $21.64[i] per square foot. Given the amount of physical space required for dense, average and spacious office layouts, fledgling businesses are looking to spend $25,968, $51,936 and $77,900 respectively to rent an office. In New York, the average annual rental cost is around $14,800[ii] per employee, while in San Francisco, you’d pay $13,032 a year for each employee.
When it comes to renting, startups must also consider the size of their office space needs. The entry-level cost of a typical office suite could be around $3,000, and might be higher depending on the location. But that’s just the beginning! Part of that physical space equation must include:
- Dining and cafeteria needs
- Parking lots/spaces
- Elevators
- Meeting rooms
- Business lounges
- Internet, telecommunications and video conferencing infrastructure
- Reception services
- Janitorial support
- Security, access control, climate control
- …and a whole lot more!
[i] https://www.loopnet.com/search/office-space/baltimore-md/for-lease/
[ii] https://priceithere.com/business-tips/how-much-does-it-cost-to-rent-office-space/
As a fledgling venture, your primary concern should be on building and growing your team’s capabilities – not prospecting for office real estate or attempting to compete with the Goliath’s of your niche. Unfortunately, you can’t build those capacities when you’re in an environment where your only focus is competing with your senior peers. Your business finances also need attention, with typical office rental space also requiring outlays for:
- Water
- Power and Heating
- Trash Removal
- Landscaping
- Common Area Maintenance costs
- …and other related costs!
If you decide to rent an office at many Maryland commercial or retail buildings and lots, physical space is only one dimension that your startup must be contend with. And when you add up the costs for the other dimensions – financial and non-financial – you’ll soon realize that the listed per-square-foot cost doesn’t give you the whole picture.
Flexibility Beyond the Space Constraints
Beyond these physical considerations, you will likely also not have access to an ecosystem of like-minded venture capitalists, or veteran entrepreneurs. You’ll not easily be able to tap into a fountain of knowledge from those who have succeeded in establishing similar ventures over many years. That’s the advantage that Maryland’s incubation space offers.
While having an office of your own might seem like an attractive proposition, renting office space in Maryland for your team comes at yet another price point: Flexibility! Regardless of how large or small your start-up team is, you’ll pay for the entire space that you’ve leased. So, even though you plan to house a 20-person strong team within 2-years, you might not require that much space initially. But you’ll continue paying for a 20-person space – even though you currently only have a 5-person start-up team.
And that’s yet another Maryland office space Incubator advantage that fledgling ventures can leverage. Business incubators offer flexible coworking spaces to fledgling companies. If it’s office space for a group of core team members you’re after – then that’s what you’ll get, and that – and only that! – is what you’ll pay for. But what if you add three more members to your slowly growing team next month? Will office space availability be a constraining factor to business growth?
No! Business incubators offer a unique growth-focused ecosystem to startup businesses. So, if it’s more space that you need, you’re likely to find coworking space that’s collocated within your existing teams’ location. So, conversely, if your team shrinks by three in a few months, then downsizing won’t be as painful as it can be under a typical long-term leasing arrangement.
This amazing flexibility, for addition or contraction of physical office space, gives startup entrepreneurs less stress and more opportunity to focus on growth and team building. It also means that you’re not competing with other businesses for scarce office space in Maryland’s hot commercial real estate market.
Everything Under One Roof
Fledgling business owners, who spend weeks (and months) searching for office space to rent, may also be missing out on another opportunity that incubators offer: Incubation office space in Maryland, like the Maryland Innovation Center (MIC), provides entrepreneurs a unique one-window solution to help your new business grow and thrive. The growth-focused ecosystem in the incubators offers a wide range of services and opportunities that you’ll never find outside of the incubator:
- If you’re seeking funding sources, you’ll find them there
- Trying to cultivate a new customer base, or developing a new product or service? You’ll find support within the incubator
- Need help putting together a viable business plan? There’s someone on hand to help you with that
- How about having a pro look at that slide deck you’re using to make an important pitch? A second pair of eyes can’t hurt. The incubator has veteran business leaders who’ve been there – done that!
It’s all under one roof, and association with incubator programs unlocks that value for fledgling businesses. From mentors who’ve built businesses from scratch, and are now eager to share their knowledge with newbies; to eager investors looking to put their money to work in a viable startup venture; to innovative programs – such as Business Revitalization Initiative Through Entrepreneurship program (BRITE) – it’s what the incubator space advantage is all about.
It takes a lot of time, talent, and resources to take a concept from innovation through to successful commercialization. A typical new business venture must scour the County, State, and the entire Country to tap into some of those opportunities. But renting coworking Maryland office space within the incubator offers convenient access to those resources. The MIC advantage also allows fledgling business leaders to tap into an international network of partners.
With this array of business support available nearby, fledgling businesses operating in the incubator are more likely to survive and thrive through their growing stages. Entrepreneurs bring seedlings of ideas to the table. MIC’s incubator offers a growth-focused ecosystem that helps new ventures take their ideas to fruition. And that’s an advantage that you can only tap into when you leverage the Incubation Space Advantage. Renting office space outside of an incubator makes it that much more challenging for fledgling businesses to tap into the support needed to scale operations when their time comes!
