7 Reasons you should NEVER 'borrow' an office from a friend

coworking flex office office space private office wfh work from home Sep 01, 2022

Sure, subleasing office space sounds like a great idea...

"Don't go and spend money on an office space, I've got a spare room at my office you can just work out of!" they said.

I've heard it from friends, clients and even suppliers. They all claim they can save money but in reality, the opportunity cost and risks involved can be more than you think. Before you jump in on what looks like the best deal on earth, here's 7 things to be mindful of to protect your business today, and tomorrow.

  1. It's their space, with their branding, not yours.

    No matter what you think you'll be able to explain away when clients come to visit, you're always going to look as though you're in 'borrowed' space. It's their logo on the door, their reception staff greeting your clients and their choices you'll be living with.

    If they decide to re-decorate, it's their decision. Even if it looks terrible.

    If they suddenly start getting lousy reviews online, your address is their address and so you'll feel the pain also and if they get pulled from Google (it really happens, a lot), you’re out of luck.

    And finally, if they want it back because they’re growing, watch how fast that ‘friendship’ doesn’t help.


  2. Do you really know how they conduct business?

    No matter how well you know your friend / client / vendor, you're going to get to know them a whole lot more if you 'bunk up' with them at the office. And they're going to learn a whole lot more about how you run yours.

    Do you want anyone that close to your business?

    Seeing every client that comes in?

    Hearing every phone call?

    Can you trust their staff not to look at your sensitive information?

    Or their cleaners to handle your room the way you want it to be handled? If something gets stolen, who’s responsible (again, google it, it happens way more than you think).


  3. What image will it project?

    Will your current and future customers really understand the situation? Will they have the confidence that you're business is real and not a hobby? Will they be willing to commit their resources, and place their business' future in your hands if they're nervous you don't believe in yourself enough to commit to your own, dedicated space?

    Or worse, will they think your business can't afford to? Because they’re probably right if you’re looking to save a buck. Investing in the future of your business with your own space is like business 101.


  4. What if there's a conflict of interest or disagreement?

    If it's a client or a partner, what happens when inevitably something goes wrong or you disagree?

    Will it jeopardize the bigger, business relationship? Will it cause you to lose more revenue than you'd be saving by working there?

    What do you do if you have another client in the same business they're in, and they need to come see you in the office? Will they be happy with a competitor walking in? Will they be happy having their team and customers seeing that competitor walk in?

    Will they be expecting the 'friend' pricing from you because they did you a favor?


  5. How are you protected if something goes wrong?

    Usually, these types of 'deals' are done informally, on a handshake and so your business have almost no protection or guarantee, of anything.

    If they forget to pay the light bill, you're left dealing with no power.

    If they forget to pay the rent, will the Landlord still recognize you and your business if he locks the doors? (Hint - No, they can’t recognize you legally, so you’re out, without warning AND they’ll seize everything inside until the debt is paid, including YOUR computers, equipment and documents!).

    Will you receive any notice that that's about to happen if you're not on the lease? No one likes to tell their friends they’re having a tough time so usually the first time you find out something’s wrong is the exact same time you realize your business just got shut down.


  6. Who’s handling unexpected charges and bills?

    When the annual reconciliations come from the Landlord, your buddy will hit you up for your share. These are unknown, variable charges that can add thousands to an annual lease. The first time I got a reconciliation on commercial real estate it was six figures. As in more than $100,000. It came with a lovely note from my Landlord: Please pay within 30 days.


  7. What about the lost opportunities?

    One of the reasons coworking and flexible office space is exploding is that unless you’re a hermit and hate talking to other people, the networking opportunities, community and ability to pickup new business is limited only by your ability to make friends. It’s typical for companies to move into flex spaces and pick up more business (or at least a meaningful amount of business) than their membership fees cost, making their workspace effectively free.

    Will your buddies space offer the same opportunity? No. You know it and I know it. So let’s not pretend that new business doesn’t matter.


    Bonus thought: 

    Don't forget Google Maps! You need to be able to register your business at your own, unique suite number that won't be affected by anything or anyone else. Sharing your buddies back room doesn’t count, and Google will find out, eventually.


There's so many other considerations to think about, but whatever you decide to do, choosing to project a professional, stable image for your business should be the highest priority to help you win business, and keep it.