In his latest column on life running an independent design studio, Paul Pensom discusses the importance of finding the right premises to establish your studio, and how this can be achieved
Perhaps the first thing to consider after crossing the Rubicon from freelancery to studiohood is the subject of property; for what better symbolises the difference between the two than a new address with a sign on the door?
When I made the leap, premises were the starting point of my research. Rent, I reasoned, is the key expense to account for in a budget of running costs, so my first step was to find out the local average.
There are as many different rental environments as there are designers of course, and I can only speak for London, but wherever you’re looking, the same considerations will apply:
Can I afford it? Surely the most important point of all. What’s a reasonable monthly rent based on my average income? There’s a hint of Catch 22 here, since you can’t really answer this question until you’ve assembled your complete startup budget, but you can’t complete your budget until you’ve accounted for rent, your largest fixed cost. The best you can do to begin with is look at percentages: recommendations vary, but generally your rental fees should be no more than 20–30% of your monthly income after tax.
Is it big enough? In our pootles round the mercantile vistas of north London we were invited to take up some decidedly incommodious spaces: think Intercity refreshments car, complete with breakfast bar stools and you wouldn’t be far wrong. In fact, as an architect friend helpfully pointed out, if there are two of you, you should be looking for 200 ft.2 (19 m.2), which is about the same as a single garage. Six of you will need 600 ft.2 (56 m.2), or roughly a Badminton Court, while ten of you will need 1,000 ft.2 (93 m.2), approximately the size of a football six yard box. And no, I wouldn’t have guessed that a six yard box was bigger than a Badminton Court either, fact fans.
Is the location suitable? What will the commuting time be? And what will it cost? Are the transport links reliable? Is it a convenient base for reaching clients? Does it have meeting facilities if clients want to visit you?
Is it well enough equipped? Especially regarding connectivity. Underestimating your WiFi needs can be costly. We initially committed to a year-long contract for a connection which proved wholly inadequate. Since our Dropbox files were forever syncing, we were sometimes reduced to sending couriers out for USB sticks in order to meet deadlines.
What are the contract terms? Many landlords now offer rolling contracts, which only commit you to the following month, rather than the traditional twelve month term. This can be very reassuring; if worst comes to worst you won’t find yourself trapped in an expensive rental agreement.
Is the culture inspiring? It’s worth thinking carefully about this point. We are, after all, in creative jobs, and creativity can flourish or dwindle depending on environment. But corporate cultures can vary widely. So what’s actually out there?
“If you need little more than your laptop then it can be incredibly inspiring to sit down in a large, bright thrumming space amongst other small firms, freelancers and sundry loose collectives.”
For small startups, we discovered that available property – in London at least – falls mainly into two camps. The first is the long established model of small, discrete units centred around a central hub of facilities, usually kitchen and break out spaces, occasionally more.
These conglomerations are often based in post industrial shells – gutted factories or warehouses, left in a distressed state which is both achingly on trend, and happily for the landlords, involves minimal refit expenditure.
The units in these blocks are usually lockable; an extra layer of security in addition to the street entrance that can be desirable, especially if you have expensive equipment, or are based in a less than salubrious locale.
The second model strips out another veil of privacy and does away with the internal units altogether. These are the co-working and hot-desking spaces exemplified by US firm WeWork, which in its global ubiquity is fast becoming the AirBnB of the commercial real estate sector.
This model works for a lot of people. If you need little more than your laptop then it can be incredibly inspiring to sit down in a large, bright thrumming space amongst other small firms, freelancers and sundry loose collectives. If on the other hand you want or need your own printer and scanner, shelving for your reference books and maybe a cutting desk and rostrum camera setup, then perhaps like me you’re not ready for the total ‘without walls’ experience just yet.
Once you’ve decided what model suits you, you need to work out the average rent for the area you’re looking in, and plug that figure into a spreadsheet of startup expenses. I’ll come back to the startup list next time, but for now I want to touch on the question of capital.
I read several authorities who counselled against borrowing to finance a startup business. “The repayments will be a millstone around your neck”, they warned. “If you can’t afford to set up without capital, then you can’t afford to set up.” I considered this advice, but eventually decided to ignore it. Why? Because I was pretty sure I could make a studio work financially on a month-to-month basis, but try as I might I couldn’t see how I could afford the setup costs, even doing it on a budget.
So instead I filled in my startup spreadsheet as exhaustively as I could, and added the initial expenses to the recurring ones to give me a monthly figure, which I then multiplied by twelve. That was how much I needed to run the studio for one year, and that was how much I took as a loan. I included the repayment figures in the monthly outgoings, so when I say that it’s worked for us so far, I trust that these aren’t famous last words.
The vital thing is to make sure you cover absolutely everything in your calculations. A wise recommendation is to add 10% to your figures just to make sure. When you actually sit and write them down you’ll be surprised to find how many expenses you accrue, and from how many different areas. Thoroughness is the key to avoiding nasty surprises further down the line. In the next update I’ll look at what you need to buy, what you can rent, and what you can scrounge.
Paul Pensom is the Creative Director of StudioPensom and Art Director of Creative Review magazine.