The serviced office industry started to gain traction as far back as the 1960s, but it’s only really been in the last decade that we’ve seen an upturn in demand. As more companies become conscious of the responsibility linked to renting a typical office and the associated costs of running one, the benefits of a serviced office have become more evident.
A traditional office rental normally only includes the price of the building itself. Much like renting an unfurnished apartment, you’ll be liable for the cost of any repairs caused by damage or negligence, and you’ll need to budget for running costs. That’s an awful lot of responsibility for a relatively low return.
Cleaning services and internet usage have been cited as two of the major costs that modern businesses need to be wary of allowing to run unchecked. The unseen benefit of a serviced office is the networking opportunity you’ll be exposed to by sharing an office building with like-minded business owners. You might go so far as to research the tenants of the serviced offices you’re interested in to see if there’s a trend in the types of businesses you’ll be surrounded by.
As with anything, you’ll need to weigh up the advantages and disadvantages linked to each.
When you secure a serviced office space through a reputable company, you know that your monthly overheads are a fixed amount and you can accurately budget for them. The building is ready to use from the get-go and a lot of the guesswork that comes with your business location is removed.
If you value paying for a service as opposed to being responsible for it yourself, a serviced office may be the best option for you.
In addition, if anything becomes damaged and is not your fault, you’ll be able to have it seen to without the liability of paying for it. Serviced offices are generally responsible for the maintenance of permanent and supplied fixtures, such as wiring and plumbing.
If you’re a start-up or previously home-based business, it’s likely you’ll want to get your name out there and increase your visibility. You may want to make your working space unique, perhaps with branding throughout. If you’re using a serviced office space, you’ll not have that freedom; you may be bound to keeping within a neutral colour palette or be restricted in what you can brandish your walls and doors with.
Bear in mind that with the unseen benefit we mentioned earlier, sharing your office space with a wider community of businesses also means you’ll be sharing facilities. Shared parking, bathrooms and washup areas or kitchens may become crowded.
While you sacrifice the peace of mind of a set monthly amount, you do also have greater freedom in how you furnish and design your office layout.
If you’ve been running your business for a while, or you’ve had previous traditional office rentals, you’re in a far better place to know how much to budget for the non-inclusive costs. If a unique and personalised space is important to you, and you have an idea of how much you’d spend on running costs each month – this may be an option to consider.
As a start-up or new business, you may find it difficult to accurately predict your monthly costs and can soon find these spiralling out of control if you don’t monitor them closely. We mentioned the similarity in traditional rented office space and rented apartments, and another one of those likenesses is evident in the high upfront costs. Often, you will be charged a deposit amount either equal to or more than a month’s rental. This can be a big challenge to businesses who simply don’t have that amount of money at their disposal.
You’ll also need to consider how long you plan to rent the space. Basing your business in the wrong location can be a bad move – financially and for your reputation. It’s fair to say a decent amount of research is needed before you commit to a 6, 12 or even 24-month rental term.
If the office space you’re looking to occupy is a new build, you may be forced into unplanned downtime or have to reschedule your move-in date if infrastructure such as fibre lines have not yet been installed. You may face other interruptions once you’ve moved in if the property is undergoing renovations or improvements.
In summary, a serviced office may be the right choice for some and not for others – much like a traditional office space rental. If you’re starting out, take a long hard look at your short-term goals, your budget and of course the functionality you would need to successfully move your business into an official office.