Starting a new business can be one of life’s major challenges. Establishment costs may be high and the fear of failure may loom large. Covering the upfront costs in capital equipment, stock, office fit-out and staff may seem overwhelming for the new business owner, especially as it is well known that there is a high rate of new business failures in the first twelve months of operation.
A safe way to limit business set-up costs is to use the either the coworking or serviced office option in the early stages of business life. This way, office establishment costs, including the purchase of quality office machinery and furniture, is deferred until the business owner has had the opportunity to test the market. It also affords the ability to ascertain if the chosen business location is satisfactory.
The Home-Based Business
In some cases, it may initially pay to operate from home. The basic advantage of this is the reduction in immediate expenditure. Although equipping and furnishing an office may still require some outlay, the immediate burden of rent is avoided. Travel and parking costs are reduced and it is easier to work at odd hours.
However, when operating from a home-based business, there is the problem of isolation from the mainstream business environment. If there are children at home it may not be very easy to balance family obligations and the time needed to run the business effectively. This is especially true for women entrepreneurs who may find their home duties overshadowing their business activities on some days. Telephone discussions can be disrupted by children, barking dogs or other neighborhood noises.
A formal office may give a professional look since many prospective customers prefer not to conduct business in someone’s home, or make phone calls to their home. There is also the perception that the business is not successful enough to afford an external office. Keeping all business papers in one place and having a separate location outside of the home, will add to operating efficiency.
Flexible Office Advantages
1. The main advantages of renting a coworking or serviced office are:
2. Saving initial outfitting costs,
3. Being set up for immediate business commencement
4. Having a choice of short lease terms
5. Having the ability of easily up or down-sizing the office
6. Securing a central location
7. Sharing reception and secretarial services
8. Having meeting rooms available on an hourly basis
9. Sharing space with like-minded business people
The basic reason to rent flexible office accommodation is that the office is already conveniently furnished and reception staff are on hand to support the business owner. Additionally, offices are available on short-term agreements and there is often a conference room available for an hourly rental.
Having the choice of short-term tenancy agreements gives some breathing space to new business owners, who may not be confident of their ability to survive past the first six months. On the other hand, it also allows for easy growth when the successful entrepreneur wishes to move to a larger space in the same office center.
Flexible office spaces have all the required equipment and facilities in place. Standard equipment includes computers, fax machines, photocopiers and highly technical printing and publishing machines.
Location will play a role in the success or the failure of most businesses. If the serviced office is located in a vibrant business community, the business owner may even gain access to new customers just by virtue of being present in that location.
Rental levels depend on the city and the convenience of the location within the city. A serviced office in a small city will not cost the same as one in a crowded metropolis. Neither will an office in an industrial area cost the same as one in the main business district of the city.
When tenants are traveling or delivering equipment to clients, access to highways and public transport, or the presence of commercial suppliers near the office, will be significant factors in their choice of office location.
Changes in the Business Environment
As even major corporations seek to down-size, reduce staff and manage risk, individuals are finding opportunities to establish themselves as independent contractors and service providers. The serviced office option of a short-term lease agreement within an established business environment gives new entrepreneurs a significant starting advantage when compared to the alternative of finding and financing new premises. Depending on the type of business, many choose to retain a coworking or serviced office as a permanent base due to the convenience, the supportive environment and the ongoing predictable financial outlays.