Why are serviced offices becoming more popular during the credit crunch? - 17.12.2008

The demand for serviced offices has grown considerably over the past few months and years as businesses look to move offices but are wary of increasing their exposure to property risk by taking on a traditional five- or ten-year lease. The recent volatility caused by the credit crisis has also meant that businesses of every size are under even more pressure to control costs and limit their liabilities. Serviced offices are a good way to do that. SMEs and start-ups are also increasingly looking towards serviced offices to provide them with the support and flexibility they need to grow without the prohibitive costs that property leases can have, especially given the current difficulties in securing business loans.

Serviced offices are attractive for businesses of all sizes for many different reasons. They allow companies to be flexible with the amount of space they use, giving them the chance to expand or contract quickly and without penalty. Unlike a traditional lease, with a serviced office companies know exactly what they will pay each month, with no unexpected extras lurking around the corner, such as repair costs. Businesses also pay monthly which helps a company manage inflows and outflows better. Large quarterly payments, or out of course charges can really cause cash flow difficulties, which is especially difficult when overdrafts and loans are harder to come by.

Serviced offices also save companies from the hassle of managing a property, as the serviced office company deals with the maintenance, cleaning and general administration issues, leaving the business free to concentrate on its core activity. Serviced offices also come complete with reception staff, a call answering service, refreshment facilities and break-out areas – all included in the price.

Serviced offices give companies the opportunity to be based in a prestigious location, but without the burden of cost that would otherwise be associated with this. The offices are also inclusive of infrastructure such as IT, telecommunications and most services, which means that companies can be up and running in hours rather than days when they move in. This can be especially useful for companies who are looking to react to changes in their market quickly.
Another benefit of working in a serviced office is that a company has access to a large and diverse network of the other occupiers that work there. Some serviced office operators run workshops and open days in the offices with the aim of helping people to meet and network with other businesses. This can provide a very useful support network for small businesses, especially during difficult times. There are examples of businesses meeting in a serviced office and going on to become customers of each other for many years.

The most important thing to do when looking for office space is to consider all alternatives and stay flexible. There is no need these days to commit to long term leases and inflexible payment schedules.  Companies should talk to a serviced office provider about what its business needs and they can find solutions.  For any further information people can visit our website www.mwbex.com or speak to one of our advisers for free on 0800 358 1808.

John Spencer - CEO MWB Business Exchange