Something like the claims of exit3a and blattner brunner?

Consider a virtual ad agency. A fancy office can prove to be a white elephant.

having worked at a few start-ups, i'd advise your friend to not to spend too much on new fancy furniture. over-investing in unimportant things (eg Aeon chairs for everyone) is a common mistake many start-ups make. however, this doesn not mean to skimp on style. clients expect thier agencies to have a sense for layout and design. think cheap chic. one other piece of advice -- your friend should look into getting used furniture. i know it sounds bad, but you really can get good stuff at a cheaper price. my last start-up bought all used stuff and you wouldn't have even known it wasn't new. good luck.

To add to what Noelle said, an office also gives a client a feeling of security. Tandon computers knew they could handle a big order. When a major customer came in (IBM i think), they rented a wharehouse and hired some actors and the customer went off raving about their space and how they could handle the job. Lies work, but if you can sell that story with truth, that would be even better.

I'll add something that Seth Godin might say, it doesn't matter the location or the decor, the important thing is the story it tells.

I agree with Noelle. The digs no matter how big or small must make clients feel comfortable.

The most important decor is always inside people's heads and hearts, and the service byproducts they yeild; the rest is but a minor detail.

the office look is more about how it makes the people who work there feel. If it's a very chill enviroment, then they will be more at home and the work should be better. Go into any top creative agency in the world and I bet a weeks pay it's is nice and doesn't look like a law firm.

Office or no office - the place that you create has to be inviting enough that the client[s] want to stay long enough to have a conversation with you. It doesn't have to be fancy, but there needs to be more than one chair [at your desk]. I often think agencies who spend a boatload on how their place looks [no comment Marc] are too concerned about the wrong things. Biggest question your friend can ask is what it the impression I want a client to feel when they walk in the door? What kind of vibe do I want to create? Course if you get a really nice office - - keep in mind you have the opposite problem - - client's sometimes don't want to leave.

I think simply, if the client wants you to have a nice office they should pay accordingly. There's a long list of clients who are happy to have you work in grandma's basement if you're passing the savings onto them. On the flip side, me having an office has been worth the investment because there's a stigma to being a freelancer that you're "just some unemployed dude looking for a handout." With an office there's a perceived "well that guy must be paying $30/sq foot if he's in the east village...which means I guess he has to bill $100/hr at least..." If people know I work from home then they might negotiate more.

Well, what if the client does visit? The office has to be at least presentable to the client. And I agree with Marc, big agencies go all-out to welcome clients with an in-house catering department, hiring hot receptionists...

I think if you're a top 500 agency and you're dealing with companies who have a budget to fly their execs into town and you're spending a lot of money on other frills like fancy dinners and $1000 bottles of wine, it's essential. I have a cubicle I rent in what was once the Razorfish offices in the east village of New York. Since I'm selling my services, for the most part people expect me to show up at their place. For all they know, I never go to my office. In fact since I have a digital phone my office is wherever I move the phone. To answer your question, a startup that spends their money on an office is a startup that won't last very long. The cliche "It takes money to make money" is false. Really, if you can't make money without money, you probably can't make money with money either. I have the best situation because I rent a cubicle but the unaware would think that I have the whole floor, or part of it when they visit me. Most agencies are founded on smoke and mirrors, and they are cheaper than offices.