Location calculation: New choices for space change office decisions

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You might imagine Dowd working in an office with wood paneling, a closed door and a leather-bound chair.

And you would have been right – at one point in Dowd’s career.

Today, though, she works on the loft-style fifth floor of a Lancaster coworking space called The Candy Factory.

Dowd, like many other small-business owners, has learned that it’s easier than ever to thrive without the traditional four-wall working environment.

Does a business really need a physical office?

It depends.

“There’s no black or white, one-size-fits-all answer,” said Jonathan Coleman, co-executive director of Lancaster-based nonprofit Assets. “It depends on the business and their clients.”

The answer, though, can go a long way in determining whether a business takes off or goes under.

Entrepreneurs, for example, may want to test out ideas first before investing time and money in any kind of permanent commitment to an office, said Coleman.

Once a startup finds a market, entrepreneurs need to consider the needs of their clientele. Will regular face-to-face meetings be necessary? If so, office space can say as much about a business as the actual interaction.

Coleman recalled consulting for one entrepreneurial company that met clients in public places or in the homes of clients.

“The company was losing business because they didn’t have an office,” he said. “It just didn’t have that professional feel. For better or worse, the office environment is an extension of a business’ brand.”

A physical space, especially early on, can demonstrate that a business is legitimate, said Steve Fafel, director of business development for Ben Franklin Technology Partners of Central & Northern Pennsylvania. State College-based Ben Franklin provides operational assistance and entrepreneurial support to emerging tech-based companies.

Face-to-face meetings are also linked with business success, according to research collected by imago and Loughborough University School of Business and Economics. A 2015 report produced by the entities noted that face-to-face exchanges build trust and professional intimacy. People interpret what is said only partially by the words that are used. People obtain more from vocal tone, facial expressions, pace of speech and body language, the report shows.

But that isn’t to say a physical office makes sense for every business.

Take Dana Willard, founder of Campbelltown-based Cope Mosaic.

Willard’s three-year-old firm is one of a handful of companies that are going through Harrisburg-based technology accelerator Catamaran, which offers advice and assistance to startups. Through Catamaran, Willard is hoping to develop tools to aid people in the estate settlement and probate process after a family member dies.

Willard expects to create an online platform that clients can access in their home. She does not intend on setting up an office.

“When someone passes away, there’s boxes upon boxes of papers and no one wants to lug that around. I’ve found, in my line of work, that it’s easier to go directly to a client,” Willard said. “It’s a matter of convenience for my clients.”

Convenience aside, establishing a physical location for a business can be costly.

Office rents in Harrisburg average around $17.33 per square foot; in Lancaster, $15.79 and in York, $17.87, according to a year-to-date calculation in a report prepared by Barbara Murdocca, director of operations for Lemoyne-based Landmark Commercial Realty. Nationally, the cost is roughly $22 per square foot in suburban markets, she said, noting that rent is on an upward trend.

Still, staying at home can pose challenges.

Dowd practiced law out of a home office for three years after spending years in a more traditional law office. But because the office was on the second floor of her home, she didn’t feel comfortable inviting clients over.

“I’d go out to meet them somewhere,” she said. “And after a while, being in my home office all the time got pretty isolating.”

After selling her home, Dowd downsized and decided to seek out another option: coworking.

Unlike a traditional office, people in coworking spaces usually have different employers, said Adam Porter, co-founder of coworking space Startup Harrisburg.

Coworking spaces provide a collaborative working environment, which typically includes sharing knowledge, ideas and equipment in an open space. Rent is often charged on a monthly basis. Tenants also can enter a part-time agreement giving them access to a table and Wi-Fi, or a full-time agreement for a permanent desk. Many spaces offer daily passes.

Swatara Township’s The Workplace HUB, for example, includes options for private office spaces with lockable doors, warehouse access, and a shipping and receiving area. Now in its fourth year in business, the coworking space has 17 individual offices and only one is currently available. While some tenants have been with the HUB since day one, others have come and gone, said Cindy Ehlers, a manager at the company.

“There’s everything from a solar-panel business, a staffing company, an exporter to Egypt, a motivational speaker, an accountant that’s here each year from January to March … we are a very diverse group here,” Ehlers said.

For Dowd, not only is her full-time desk at The Candy Factory less expensive than the office she rented out in the past, she also has more access to space. She meets regularly with clients in one of the coworking space’s multiple conference rooms.

Though it can be occasionally challenging to get used to new voices and people in an open space, coworking has also provided a social aspect and networking opportunities that Dowd said she wasn’t getting at a home-based business or from a corporate-style office.

“I have a lot of documents that need to be signed around witnesses. At home and at my other office, there was never enough people around, but now there are plenty,” she said. “And at first, I was worried what some of my clients might think, but they all seem to love it. I think I have some pretty fun clients now.”