Knowledge may be power, but LACK of Knowledge costs you MONEY!
Despite a lack of experience or personal knowledge involving a particular venture, we all are susceptible to believing, “We know things that we don’t.” Reinforcing this illusion is our reliance on the internet as our principal source of information. As a result, we confidently stumble forward, thinking, “This is no big deal. I can do this.”
Take Steve, my former client, for example. Steve was a successful entrepreneur who grew a novel idea into a mushrooming business. Needing larger office space, Steve knew where he wanted to locate his new headquarters, but not much more than that.
Sitting down with Steve, I aligned his company’s operational and financial needs with its physical office space requirements. Based on my analysis, I projected that Steve’s 58 employees required approximately 11,000 square feet of office space. Once we settled on how much square footage, Steve added that his priority was to retain and attract qualified employees by finding office space that was conveniently located, attractive, and reasonably priced. With those objectives in hand, I introduced him to several office buildings along the Long Island Expressway.
After field inspecting 7 buildings, Steve narrowed his shortlist down to 3 finalists. We then submitted to each landlord a written lease proposal.
After analyzing the landlords’ responses, Steve selected a finalist. We were now ready to negotiate the closing details. All was going as planned, just when Steve went…’radio silent.’
With the self-assurance of having built a successful business and the knowledge he acquired from our consulting sessions, Steve was confident he knew enough about commercial real estate to save ‘big bucks’ by doing it on his own.
Using Google search as his primary information source, Steve went down a rabbit hole for eight weeks, chasing what he perceived to be cheaper rents. These ‘cheap’ rents ended up being ‘net’ rents, requiring Steve to pay, in addition to the base rent, property taxes, utilities, cleaning, common area expenses, building insurance, etc.
Eventually, Steve realized these buildings were operational and financial dead ends. They were not conveniently located, lacked adequate parking and window ratios, and had no on-site amenities. Not exactly the best solution to the objective of attracting and retaining quality employees when the unemployment rate was below 4%.
Steve also discovered that these landlords required him to come out of pocket tens of thousands of dollars to design and build his suite.
Arriving at the realization that the search for office space was more complicated than he had imagined, he then called me, saying, “I’m ready to move forward.” Unfortunately, the ‘finalist’ landlord and one of the backup landlords had also moved forward…with other tenants.
With time running out and having only one landlord to negotiate with, Steve had to accept less favorable terms and conditions than what we had negotiated a couple of months earlier.
If that was not a ‘kick in the pants,’ the time Steve took away from his business was time not spent on his clients’ needs. As a result, his largest client defected to a competitor. Ouch!
The moral of the story is….”The illusion of knowledge comes with a price.” Don’t be a know-it-all. Don’t be Steve. Get professional assistance when looking for office space.
