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RANT How much is too much for an office expenses?

Discussion in 'General Entrepreneur Discussion' started by astr0, May 13, 2019.

What office items should we get for HR-competitive business?

Poll closed Friday at 5:42 PM.
  1. Start lean

    66.7%
  2. Get good quality for cheap

    33.3%
  3. Only the best

    0 vote(s)
    0.0%
  1. astr0
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    astr0 Grinding Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    The last day on my 9-5 is getting closer and closer and we need an office to run a software development service business with my two partners pretty soon. Found a nice office already and now we need furniture + equipment and here comes trouble.

    Our inial estimate was ~1k per employee ($600 for a used laptop, $100 table, $250 chair). Pretty soon we realized that we definitely need 2 monitors, cause it boosts productivity quite a lot. I've done some research and came with $60 for Ikea tables (2 options), $100-$200 chairs (decided that everyone would pick what's comfortable for them) and $500 used laptop + $150 used monitor or $300 for 2 used monitors and $200 for a used PC. So still under $1k.

    But now one of my partners insists that we should look very cool & modern so proposes $400-500 chairs, $200+ table and $2.5k MacBooks pro (which are not serviced in our country, so warranty repairs would take months) and the other one is more on his side, except maybe laptops. At least monitors that I've found are fine for them. Still, that's $3.5k+ for a workplace.

    I agree that we should look modern and cool in the eyes of our future employees, but now we have one mid-term paying customer and would blow up half of our day 0 money on the office. I've done it before and know that service business is full of ups and downs, especially in the beginning and while it's still small. We can spend weeks looking for our next client with 0 income and that money would help to survive those periods. They have pink glasses mode on.

    At least everyone agrees that we don't need a full blown kitchen, for now...

    Yeah, Ikea tables are not very rigid and those $500 laptops are heavy and bulky, maybe even scratched here and there.

    But does it matter that much?

    P. S. We do need an attractive, nice looking and comfortable office...
     
    Last edited: May 13, 2019
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  2. Jaden Jones
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    Will customers be coming to your office? Do you really need them to? If you could meet customers at restaurants or at shared space, you wouldn't need furniture at all. Set some plywood up on some breeze blocks and get some folding chairs. If you absolutely need an office, keep it as lean as possible. You dont need fancy chairs and tables, computers and the second monitor make sense, but only if it really makes you more efficient.
     
  3. astr0
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    The current local customers will be coming into our office, but it doesn't matter since they are customers already.
    Future customers won't come into our office anytime soon. They would most likely be from a different country as we're pretty much a niche outsourcing agency.

    However, we do need a nice comfortable office to hire employees... They are spoiled by other companies offering 2 monitors + laptop, XBoxes and VR sets for relaxing, free gym, massage, free alcohol parties on Fridays and other perks...

    A recent survey showed what's important for software engineers here when choosing a job:
    1. Salary & benefits - 78%
    2. Interesting work & projects - 65%
    3. Career improvement potential - 57%
    4. Comfortable environment - 29%
    5. Flexible schedule - 22%
    6. Work from home/remotely - 13%
    7. Office location - 8%
    8. Company reputation - 4%
    We definitely can beat most of the competition for brains on 1, 2, 3 and 7. Sometimes can allow 5 and 6. Obviously have zero points on 8, cause we're just starting. The workplace in the office would be 4.
    On my current job 1, 2, 5, 7 and 8 are strong. Zero career improvement and so-so office, so I have my own everything except the table.

    Lots of talented and hardworking people here, but the competition for brains is huge, so we have to take that into consideration from the start.

    Yet I totally agree on keeping it as lean as possible while still comfortable and a little impressive.

    On my 9-5 it's actually quite hard to hire cause of bad and outdated office, even for +30%+ salary compared to the competition. Last hire is skilled money-chaser who doesn't give a f*ck about the project and works exactly 8 hours every day, never had overtime in a year even when he had urgent tasks. If only me was making a decision, I would never hire him, but he looked ok for my boss).
     
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  4. Jaden Jones
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    I think you underestimate the value people put on being part of a startup. Its very exciting knowing you could be part of something that becomes huge. I would give up a comfy chair for excitement any day. Also the less you spend on office supplies the more you can pay them
     
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  5. biophase
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    There's no way you need a $500 chair. Just no. $75 max, get them new black leather or fake leather chairs.

    Definitely go with 2 monitors. That's a must. 2 - 23" monitors should be $250 total. IKEA desks are fine because you are going for that cool, contemporary look.

    I use desktops. Most people have their own computer at home. I guess it depends on what job they are doing.
     
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  6. TheCj
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    Places go out of business all the time and are basically giving away office chairs and furniture. Can find on local craigslist, classifieds etc..
     
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  7. Xeon
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    Xeon All Cars Kneel Before Pagani. Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    There was an old thread about fellow Fastlaners' office setups with pics....I remember there was one office pic that look very futuristic and edgy, and it was done on an extremely small budget and many recycled furniture.

    Cheat code for making a beautiful office : paint the office walls in trendy hip colors. The furniture are only the icing on the cake. If the major parts look good, the minor parts will automatically fall in place.
     
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    I would recommend you take a very honest and serious look at what is ACTUALLY needed.

    My business started 2 years ago with $5,000 in savings and has since profited $354,000 (profit!).

    Know where I started my business?
    My kitchen table with a 10 year old laptop in a 600 square foot apartment. And after I profited my first $100, I graduated to the desk in our office, in the nights it was my work desk, in the day it was my girlfriends makeup desk.

    I agree with investing in a workplace that will make you more productive (dual monitors, keyboards, desks) but I never upgraded to a fancy office space for clients until I knew MJs rule applied. NEVER buy into something if you have to think about if you can afford it.
     
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  9. The Abundant Man
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    upload_2019-5-13_22-48-58.jpeg

    Facebook's first office:
    [​IMG]

    Apple Inc first office:
    [​IMG]
     
  10. Bearcorp
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    Exactly how I furnished my office. Great advice for people starting out.
     
  11. astr0
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    True, but we're not exactly a startup in conventional meaning as we are developing software for others, not our own product. So basically the same job as on other companies, just more interesting and challenging niche with huge career growth opportunities in case we'll make it. Our margins are also higher than in huge companies and operational expenses are lower, so we can definitely pay slightly bigger salaries if we would have to.

    That's exactly my plan, just those type of chairs are $100-$150 here, $200 for fancy gamer-styled ones. My friend owns a ~25 people VR/AR agency, that's where I saw Ikea tables. He also has comfortable $100 chairs.
    After sleeping I've actually realized why my partner wanted $500 chair - he has health issues with his back, so an orthopedic chair is pretty important for him. But that's definitely too much for employees.

    Yeah, but we're in Ukraine. IT companies, attorneys and lawyers don't go out business here, lol. And others have stuff that doesn't even worth moving. Although we can definitely find nice used high-end chairs imported from abroad for $150-300, that would cost $400+ new here.

    Thanks for an idea. Our office already looks modern and probably was renovated recently. We'll think about hanging something on the walls to make it nicer.

    Totally agree and we're actually thinking from that perspective. Now, I'm also pretty sure that my partner won't take a job in a small company like ours, so that's probably why he wants us to look that cool. So future employees would have the first impression that things are going great here.

    Right now we need tables + chairs, 3+ monitors and two laptops/desktops, so that's not that huge. However, we would definitely like to have the same tables and similar monitors for everyone in the future.
    I'll be working on my 9 years old desktop or resurrect 6 years old laptop that has broken keyboard if the desktop noise would bother others. Another partner has a MacBook Pro. And we do have some monitors too.

    We've actually started doing this part-time from home a few months ago. Three paying customers, 21k in profit so far, and similar payment going our way this week. So we pretty much can afford even $3.5k setup, but I like to optimize things and do it efficiently. From that perspective, that money would better serve as 3-months salary and other expenses "insurance" allowing us to grow faster and hire sooner.
     
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  12. virginiaj.yates
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    I think you need to get a little frugal about your office furniture. If you dont want to compromise on the machines you want your employees to work on. You have to consider the fact that you are starting out and you need to invest in yourself and people who work for you than to invest in things that will probably go to waste within next 2-3 years. You need good machines with good skill-set. Let your work dictate terms till the time you can actually invest money in things. A friend of mine is based out in NY and he lives in a two room flat, he sleeps in one and works in the other one and I am telling you he is making big buck but still not that much willing to invest in things. Anyhow, it's his choice. What I am telling you is right now, work on getting yourself to the point where you don't have to worry about these expenses.
     
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  13. Neng Her
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    A few books ago the group voted to read How To Get Rich. The author touches on that subject and makes sense of it.
     
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  14. astr0
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    I'll post some photos that can better explain the situation:

    The office that we're renting (will be completely empty in a week):
    our.jpg

    My 9-5 that scares people even with 30% bigger salary:
    IMG_20190514_115651.jpg
    IMG_20190514_115815.jpg

    My friends 260 employee company:
    perfectial.jpg
    perfectial-office.jpg

    Another company with ~1.3k employee, around 500 in my city:
    lohika_1.jpg
    lohika_2.jpg

    6k+ employee company, 2k in my city:
    soft_serve_1.jpg
    soft_serve_2.jpg

    Places like that cost $20/m2 to rent and are 130 m2+. So we're already lean with our $10/m2 office in a good location. We're not trying to compete with top companies on the office, that's pointless, just look decent enough so our employee candidates won't be scared.

    So far decided to go with $150 tables and $100-150 chairs. No MacBooks for the employees, we'll try to encourage them to have their own laptops or offer them a desktop+2 monitors or $500-600 laptop+1 monitor. Encouragement would be something like a salary bonus, 0% leasing or longer-term contract for the laptop. People with their own laptops tend to overwork more and work from home sometimes in the evening or during the weekends).

    The founders have our own tech so we need 5 tables, 4 chairs, 1-3 laptops / 0-2 desktops, 4/6 monitors. With all the other stuff, it's less than $4k total. One additional workspace would cost us less than $1k, lean, as expected.

    Thanks, everyone!
     
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  15. Mutant
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    Of those pictures you posted, the one with all the plants looks nicest to me. Surely a bit of nature would be a cheap way to disguise less cool looking bits of furniture, but actually end up with a really pleasing environment?


    Sent from my iPhone using Tapatalk
     
  16. astr0
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    Yeah, but they require maintenance like watering and maybe some fertilizers. I have no idea as I live in a village with nice nature outside so we don't have plants at home. So only if our maid would be happy to look after them.
     
  17. RazorCut
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    Maintenance would be minor. Watering once or twice a week. Adding a liquid plant feed to the water once a month would probably cover it. A cheap way of beautifying a work area. If you want to create a professional feel make sure all the desks and monitors are the same. Nothing looks worse than different styles and colours of desks and monitors in an open office space. I would say the same thing with the chairs. Though personally I would buy second hand Herman Miller Aeron chairs rather than new low quality ones that look the part but have dubious ergonomics.
     
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  18. astr0
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    Nice, that's less maintenance than I thought. My mom loves plants and I remember she even changes soil once in a while (every year or few). Great idea, thanks!

    Definitely the same monitors and desks, it would very messy otherwise. This makes sense for chairs too, but I'm still not sure if that would be the right decision.

    Chairs are very personal and comfort depends on the height, weight, body complexity, leg length, and other factors. So from ergonomics and cost perspective, it would be better if everyone would pick what fits them best. But we'll stick to the same colors, black is probably the most popular and every model should have a black version.

    Herman Miller Aeron is $750-$1.5k here new, I've managed to find only one used for $500 in Ukraine. Advertised as "the best chair in the world" so there must be something to it considering they sell it for that prices. Still, totally out of budget...
     
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  19. wade1mil
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    What if you gathered desks and chairs from garage sales for as little as possible, and then created goals that once achieved, "unlock" these fancy chairs and desks you speak of? It would save valuable cash now and help team building as well.
     
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  20. astr0
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    Nice idea on goals that would "unlock" something, but I think the further we go the harder it would be to justify better furniture and tech equipment.

    For example, now we need let's say 15k for a high-end 5 people office. And that's roughly a 3 months salary for an employee, which means we can hire him now (that's our "saving" threshold). It's better than top-end office cause he would allow us to free some time and get more clients, which means more employees and thus cash flow.
    And it would always be like that...

    On the other hand, we're niched, more direct, faster and with much less additional expenses, so we have higher margins than those monster companies. That means that an employee would earn us his top equipment in a month if things are going great. But we have a smaller market, small team and just starting so it would be much bumpier financially with lots of ups and downs. So we need a bigger salary pool to survive...

    It's hard to find balance.
     
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    Or you could just buy fake plants so there's zero maintenance. Many of these are even prettier than real plants.
     
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  22. RazorCut
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    I thought of that as well but they tend to be quite expensive plus they don't eat carbon dioxide and give off oxygen which is a nice added benefit.

    Wow, that is pricey in your country. It's a shame, they can be bought a lot cheaper over here. Ergonomically they are available in several different sizes to suit body type and have plenty of adjustment. They do make long hours in front of a PC much more bearable.
     
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  23. astr0
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    Somehow they seem to be less expensive here, almost the same price or even cheaper. 3-5$ for small ones, 30-50$ for ~1-meter ones. Real are $2-20 for small ones and $20-300 (or more) for bigger ones. Since I assume all of us don't know a thing about plants and fake would look the same no matter what, we would go for that option. Thanks, @Xeon and @RazorCut .

    Yeah, they are only available in few online stores and positioned as premium chairs. Aeron Remastered and Embody are $2-3k which is crazy. They are 3x cheaper on eBay, but importing chairs is not what we want now :).


    P. S. $150 tables that I have at home cost $220+ now, but that company is probably just rebranding them. I also have their $200 office chairs that I'm happy with and yesterday found them under the different branding for $150. Found a few very similar tables today in $90-120 range, one of them is probably the original product. Those tables look very modern and are extremely durable - as good as new after 3 years of almost every night usage, just some scratches on the stands from metal parts of the chair.

    Never thought that picking office furniture would take so much time...
     
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    I love this idea!
     
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  25. astr0
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    Just realized one major and very important thing. I'm not just an employee anymore. My income is still pretty much tied to time, but I do earn more outside of 9-5 for an hour on average.

    So the total time I've spent looking for tables/chairs costs me... nearly 3 nice tables and 1 more for my partners time. Also around $30 for diesel to drive over every major furniture store in the city. The goal was saving $800, but compromising on quality too and we lost that amount already by not earning it.

    Reminds me of MJ's example of the line for a free hamburger, just on a bigger scale. I was actually often counting time in money on my previous business, but that habit faded away with almost 10 years on 9-5 again (and my wife doesn't like it too, especially when I apply it to household tasks :blush:).

    Hope this post would help someone to value their time better.

    P. S. I'll check the last options cause I'll be near the store tomorrow anyway and sunk cost fallacy is depressing me too much now, lol.
     
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