Is it Worth it Spending Money on a Nice Office? | Ep. #593

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In episode #593, Eric and Neil debate whether you need to spend money on a nice office. Tune in to hear the reasons you may need a great office space.

TIME-STAMPED SHOW NOTES:

  • [00:27] Today’s Topic: Is it Worth it Spending Money on a Nice Office?
  • [00:51] In a collaborative environment, it’s good to have everyone in the same space.
  • [01:14] Eric pays about $11,000 for three sections in co-working spaces.
  • [01:35] Now, they’re moving into their own dedicated space.
  • [01:49] Offices are good for recruiting, it’s a great space to bring clients into, and it’s nice to have a home base.
  • [02:13] If you are looking to build a culture, you need to have your own dedicated space.
  • [02:27] A crappy space creates a crappy feeling.
  • [02:45]However, Neil thinks it’s a waste of money to have a nice office, even though offices do serve an important purpose.
  • [03:10] He would rather save money on the office and spend it on food or other community-related activities and things that build culture.
  • [04:07] Nice offices are good for creative businesses and it helps create a positive perception.
  • [04:40] Marketing warrants a nice office, in Eric’s opinion.
  • [05:01] Neil prefers to sublet for a year at a time.
  • [05:54] He thinks it’s too risky to sign up for years at a time.
  • [06:20] Consider whether your industry warrants having a nice office.
  • [06:29] That’s all for today!
  • [06:32] Go to Singlegrain.com/Giveway for a special marketing tool giveaway!

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The post Is it Worth it Spending Money on a Nice Office? | Ep. #593 appeared first on Marketing School Podcast.

Full Transcript of The Episode

Speaker 1: Get ready for your daily dose of Marketing Strategies and Tactics from entrepreneurs with the guile and experience to help you find success in any marketing capacity. You're listening to Marketing School with your instructors Neil Patel and Eric Siu.

Eric Siu: Welcome to another episode of Marketing School. I'm Eric Siu.

Neil Patel: And I'm Neil Patel.

Eric Siu: And today we're going to talk about if it's worth it to spend money on a nice office. My theory on this, if you asked me a couple years ago I'd have been screw that, it's all about remote, I've always worked well in remote, dah, dah, dah, dah, dah, offices are a waste of money and that's kind of the argument that people make when they make the argument on remote versus the office culture. It's like, "Oh, you get to save money and you get to hire more people." Well here's the thing, what I learned is in a collaborative environment, like an agency for example, it's really helpful to have people in the same environment just talking, talking through ideas, because that collaboration helps a lot.
Right now, we are in the process of moving over to a new office in downtown LA but the people on the LA team over here, we've been working at this coworking space where we have three offices and we pay a hefty amount of change a month, I think it's close to $11,000 and we have three little offices. Each one's like maybe, I don't know 200, 300 square feet or so.

Neil Patel: But they're nice. They look nice.

Eric Siu: They look nice but the new one we're moving into, that's 3,200 square feet so yes, a good portion of our team's still remote but the new one we're moving into, we get to create our own culture and we get to have our own furniture. All that kind of good stuff with the conference rooms. All that kind of good stuff. And what I've learned in the past when I've looked at other companies too when people built nice offices they spent millions and millions of dollars on offices, is that offices are really good for recruiting. It's really good to bring your clients into and it makes people happy too at the end of the day to have this home.
Because here's the thing, we have people, even though we come into the office three days a week, there's still people that come in every single day and it's good to create that kind of home environment for them and even the new office that we're planning to move into, well that is going to be basically the same cost. To me it's a no brainer. If you're looking to build a culture, which this is exactly from the WeWork CEO, he ways, "When it's time for you to build a culture that's when you look at building out your own space or moving into your own space."

Neil Patel: Yes. The question is is do you need a nice office?

Eric Siu: Yeah, I think so. Because if you put people in a crappy work environment it's like going into a crappy home. The feeling to me, this is gut feeling, the feeling to me is just like, "Man I don't really want to go there. This isn't a nice place to call home." It's just not a good feeling.

Neil Patel: I think it's a waste to spend money on a nice office. I'm not saying-

Eric Siu: Are you moving into a nice office?

Neil Patel: Yes because that's my business partner picked it.

Eric Siu: Oh yeah see, so you are.

Neil Patel: Yeah but if it's up to me I wouldn't care for a nice office. I believe offices are good and they have their purpose. If you're an ad agency like you are, we also own an ad agency, it makes sense to have a nice office because customers end up coming there, it looks good, it's presentable but in general I wouldn't do it. I'd rather take that money, save some of it, have a mediocre looking office with cheap desks and nice chairs. I still want people to be comfortable but spend the extra money on things like food for everyone every single day so they don't have to pay for their own lunches or other community related activities that helps build the culture.

Eric Siu: But you can do both right?

Neil Patel: If you have the money. If you don't have the money then it gets a bit tough and especially during the early stages, I don't recommend spending a lot of money on a nice office. Only when you're profitable, you're growing and you don't necessarily know what to do with the money, by all means go get a nice office, go spend money on the lunches, the culture and all that kind of stuff. I do think it's necessary to spend money on the culture from day one but the nice office, it's just a plus. I don't think you need it.

Eric Siu: Yeah so Neil and I talked about the concept or we talked about the subject was on lavish expenses and the office is certainly one of them. And I think it also depends on the business that you're in. Neil and I, in an agency kind of creative environment I think it's helpful to have a nice place because your clients are going to be meeting and its just helpful to have that kind of, what should we call it, perception we should say. Perception is everything because perception is reality at the end of the day.
Now if you're in an engineering focus environment, now I know friends that have really nice offices but their engineering office is completely somewhere else. Sometimes can be completely somewhere else in the world. It's not exactly the nicest office. Coming back to this I think it also depends on the business that you're in. It just so happens that one of the businesses that Neil and I run, the type of business is the type that warrants a nice office.

Neil Patel: Do you have a three year lease on your nice office?

Eric Siu: The next one yes.

Neil Patel: That's too long. I can't sign those three years leases.

Eric Siu: Bring it down from five to three. It's tough in LA.

Neil Patel: Doesn't matter where you are. I can say it's tough in San Diego or San Francisco. I only do sublets. That's one of the reasons why we have a nicer office.

Eric Siu: We might actually do that.

Neil Patel: You should only do it. Don't sign the three year. Did you already sign it?

Eric Siu: We didn't sign it yet. [crosstalk 00:05:07] from this podcast.

Neil Patel: I only do sublets. I don't like doing more than one year because when you're growing you don't know where you're going to be in the long run so make sure you're in your office or you have the commitment for the least amount of period. I don't like more than one year leases. In San Diego we did WeWork. We lasted there for six months. We sublet one of your friend's office, Tony, he used to run an affiliate company. Gave us all the furniture and everything like that and within three months we outgrew it but our sublet was for six months and now we have another one. I only wanted to do a one year max. We couldn't find one that the team liked that had a one year sublet. They found one that was like one year and three or four months and it was decent sized but only stick to one year if you can help it. It's too risky to lock yourself into four, five or even three year leases.

Eric Siu: Yeah, and just keep in mind too in a lot of cases, sometimes assuming the landlord is not an a-hole you will have the opportunity to grow into other offices that are under their portfolio so it could be in the same building or somewhere else. You do have that option but ideally what Neil is mentioning, ideally if you're subletting a or if you can sign a one year lease that's in your best interest. And then also finally, last but not least, consider that if the industry that you're in does not warrant a nice office, where can you reallocate those cost savings to help grow you even further.
That's it for today but before we go check out singlegrain.com/giveaway for the giveaway stuff that we're always changing from time to time. See you tomorrow.

Speaker 1: This session of Marketing School has come to a close. Be sure to subscribe for more daily marketing strategies and tactics to help you find the success you've always dreamed of and don't forget to rate and review so we can continue to bring you the best daily content possible. We'll see you in class tomorrow right here on Marketing School.

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