Office Space for 1

May 12, 2005

Most people realize that small businesses make up a large percentage of the business population. However, I think the boom in real estate and mortgage brokerage has actually made self-employment even more popular.

Paul Graham agrees (one of those guys with a phd and millions), going as far as predicting the end of hiring. He thinks companies should hire people by buying the companies they’ve started at an early stage, which gains both talent and product development.

It’s not unthinkable, but there’s one hurdle – office space. Even in a big real estate market, the 500-1500 sf office (2-6 employees) doesn’t exist on a scale to support the growing start-up movement. Landlords won’t divide big spaces in hopes of big tenants, real estate brokers won’t represent small companies because of lower commission potential, credit, and hassle, and small companies run when asked to sign a 3 or 5 year lease and steep lease rates.

Many professionals I know have very successful businesses, but office space just isn’t available. The best CPA in Orange County doesn’t have a traditional office, and neither does Ralston Ventures.

Maybe that’s an advantage of big metropolitan areas like SF and NY, which have creative real estate options like lofts that can house a small business. And maybe it doesn’t matter with ubiquitous wireless internet, email, cell phones, blackberrys, and all the other stuff we use.

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