This is what a smart startup looks like.

Entrepreneurship is full of difficult decisions. Especially in the beginning. In fact, the decisions you make about expenditures early on determine whether your organization lives or dies. It sound dramatic. Like a commercial for the business board game Go! Gordon Gekko Go! But it’s the truth.

I have always been financially conservative. I believe leadership’s #1 responsibility is to keep the business alive forever. That’s why I have hired slowly, expanded slowly and invested slowly.

At my advertising and idea agency, The Weaponry, we have bootstrapped everything. Which means that we have paid for everything ourselves. No outside investors. No loans. No crowdfunding. No Ponzi scheme.

We started with the free version of every app and software until we knew it was worthwhile to upgrade. We made our first 3 desks out of countertops and legs we purchased at a used office furniture store. And we commuted to work uphill both ways.

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Yep, I made that desk out of found parts. And it works as well as the most expensive desk you can buy.

 Office Space

When I first launched The Weaponry I waited a year and a half until I decided we could afford an office. In hindsight I feel like I nailed that decision. Because we didn’t over commit in the early months when we were most fragile. We didn’t assume that our rate of growth was predictable or sustainable.

Cautionary Tale

I recently heard about another agency that launched the same time as The Weaponry. It just shuttered one of their 2 offices and laid off all but 1 employee in the other. (By shuttered I mean that they closed it, not that they added fancy, yet extraneous exterior window treatments).

The agency had invested and expanded aggressively. Too aggressively to sustain. Watching them establish beautiful offices with enviable appointments made me jealous. But it also made me concerned for them. Because those investments made them vulnerable. And of all the abilities your business can have, vulnerability is among the least appealing.

Doing It Right

Last month I saw an office that I absolutely loved. It was the office of an early stage human resources company. It had 4 desks in a space half the size of my bedroom. The density of  humanity in that office equated to a very dense return on the investment in the space.

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This is where my friend Amy Fallucca grew her human resources business, Bravent, into a thriving organization before moving it into a large fancy-pants space.

 

Idea of the Day

Calculate how much revenue you earn per square foot of office space. It is a much better way to think about your space than cost per square foot.

Key Takeaway

When considering office space for a small or new business think of the Tiny House movement. Consider the minimum space you need, not the max you can afford. Put the rest of the money you save in the bank as an insurance policy for future downturns and slow periods. Because they are likely to come. And you will be prepared when they do.

*If you know someone who could benefit from this story, please share it with them.

Published by

Adam Albrecht

Adam Albrecht is the Founder and CEO of the advertising and idea agency, The Weaponry. He believes the most powerful weapon on Earth is the human mind. He also authors two blogs: The Perfect Agency Project and Dad Says Daughter Says, a Daddy-Daughter blog he co-writes with his 12 year old daughter Ava. Adam can be reached at adam@theweaponry.com.

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