For my third post in the “First office” series, I wanted to learn about alternative office options to incubators. Earlier this month I sat down with Ed Correia, founder of Sagacent Technologies, to learn about his experience in finding the right first office.
Sagacent Technologies specializes in business technology management services. Clients benefit from highly skilled professional service resources utilizing a proven methodology for assessing challenging IT environments or implementing complex technical solutions. Sagacent Solutions are carefully tailored to meet the specific business needs with strategic and farsighted planning. Below are the question and answers from our conversation.
Q: What were your three biggest concerns in finding the right office?
Location was the most important concern in finding the right office. We wanted something that was central to our current client base and close to our target market. One of the things that differentiates us from some other IT management firms is that we not only do remote monitoring but our staff spends most of the time in the field at different customer locations. Driving time for my employees and heavy traffic hours was definitely an issue. We are not a store, so being close to the road or in a strip mall was irrelevant. The look of the building and the surrounding location was the second biggest concern. I did not want to be in a run down building or in a questionable neighborhood. We wanted something that was aesthetically appealing and in a professional office space so that we didn’t undercut our credibility. I would say our third biggest concern was security.
Q: In terms of getting started, when you made the decision to move, what was the first thing you did?
I called a broker from California Properties and then developed a map of Silicon Valley. The broker and I figured out where our current customers were located and then determined where our target prospects are located. Then we outlined a tight circle of locations that would suit our needs. We looked at 20 properties before I decided on the ideal office place and location.
Q: How did you measure or assess the quality of the office?
I looked at the facility to see how well it was maintained. Then I spoke with some of the other tenants to understand their impressions of the place. Finally, did I like the building manager? Was this someone I could work with?
Q: How long did the whole process take from making th first call to moving in and being functional?
It took about a month and a half to see all the properties and then another month in a half to move the essentials over to become fully operational. However, the place was a mess and was not presentable to visitors. It took a total of 6 months to paint, gather furniture, and organize everything before we invited people to our headquarters.
Q: How big an expense was furniture for you? Did you find a store or other source for good used furniture?
We put the word and were surprised at the number of people who had a surplus chairs, tables, or desks they were happy to part with if we would do the hauling. We spent hardly any money on furniture as a result.
Q: Was this a frustrating search? At one point you thought you had found a good location but the deal fell through.
We knew it was a big decision for us so I wouldn’t say that it was frustrating. At one point we had signed a contract and I thought we were done. I took a few days off for vacation with my wife to celebrate and when I came back our prospective landlord had left a message that they had gotten a better offer and were rescinding our deal. So at that point I realized I wasn’t just picking an office, I needed to take a harder look at the landlord. I had been looking at a lot of “objective measures” of the office, but that experience made me realize that leasing an office is the start of multi-year relationship with your landlord. And you want to select one who will be a good business partner whatever happens to your business.
Q: Even with a surplus of office space you were surprised that a number of landlords didn’t want your business?
Yes, I was shocked that IT firms have a bad reputation among landlords. I don’t know if it’s lingering fallout from the dotcom crash but several times they would immediately lose interest in working with us when I described the basics of our business.
Q: What were the three biggest surprises you discovered in your search or after you moved in?
The biggest surprise was the amount of paper work involved in negotiating the lease. There are all kinds of hidden fees and tenant responsibilities in the contract. I recommend that you have your attorney read over the contract for you. The next surprise was the poor quality of building’s DSL line. We ended up having to install our own T1 line. The third surprise was being able to rent more space. Our business doubled less than a year after the move. We are already looking to rent an additional 1000 sq ft. Our property manager has been great in helping us plan for the expansion.
Q: What has the impact of the office been on your business?
I have been pleased at how our getting an office has allowed us to communicate our professional approach. We have always been committed to our customers in the way that we do assessments, in our thorough proposals, and our contracts. But for many prospects who have visited us in the office, it’s been another proof point in their minds that we are committed to the business and are growing. We have also done a number of open house events that have made new prospects aware of our services and let our current customers come by and give us informal feedback.
Update Feb-29-2008: Ed Correia was profiled in a San Jose Business Journal article “Sagacent Grows by Helping Small Business Avoid IT Woes.“