Years ago there was something of a stigma attached to occupying a serviced office. After all, who would want to deal with a company that could vacate its offices at a moment’s notice and without a second thought? Now though the perception is very different. Government departments, law firms, IT companies, financial institutions and many other reputable businesses have suddenly seen the light.
So, why would you endure all the heartache of owning or leasing, maintaining, equipping and to a certain extent staffing your premises when you can outsource the entire business cost efficiently to a third party? With managed and serviced offices achieving acceptability the floodgates have opened and worldwide the industry (known as the “Flexibly Managed Office” or “FMO” sector) is booming.
In London for example the number of workstations supported by the FMO sector has doubled, to 52,000, over the past few years – and new offices are quickly filled when they come on-line. But of course, commercial acceptability is only one factor in the present growth. Far more significantly is the fact that occupying managed or serviced offices makes very good business sense.
Occupiers are attracted to the flexibility which the solution offers. Agreement periods can be for a matter of months if required and many FMO providers will let occupiers vary the office space they take, both up or down, during the term.
SMEs in particular find this an attractive feature, but so too do large companies who may need to accommodate a project team for 6 months or a year. Basically they can move straight in to a fully resourced office and then pay just for the time they’re there. This of course presents the second great attraction of the managed or serviced office: convenience.
You get a lot more than just the space in the serviced office price. For example, maintenance services, a staffed reception area, utilities, furniture, business rates, cleaning, concierge services and security are just some of the items generally bundled by quality suppliers into their serviced office solution . All of which means you basically get a running office out of the box, for one simple monthly payment.
Technology also plays a part in customers’ decisions to choose managed or serviced offices. The best providers equip their buildings with broadband access, telephone systems and a whole raft of scaleable communications and data options. This means that your phone lines and Internet connections can all be configured and are ready for the day you move in, without you having to lift a finger; and often at a very competitive price.
So is it cost effective? On the face of it the renting a managed or serviced office may seem pricey in comparison with traditional renting, but when you factor in the total cost of running your office (including paying for the above items), the FMO option is surely tempting. In fact a Chartered Institute of Purchasing and Supply study found that a managed or serviced office is the route to go if you want to accommodate up to 30 workstations for a period of up to 5 years.
Finally, Finance Directors in the UK are learning to love the managed or serviced office route. Accounting regulations stipulate that all future lease payments are included on the balance sheet as liabilities and this can be a tidy sum if you’ve a 15 year lease with no breaks, denting the value of the company. Going the FMO route avoids this entirely – you just account for your licence payments as you make them.
For all of these reasons the future for the Flexibly Managed Office industry looks exceptionally bright - as well it might, given the real benefits it can offer businesses.
Andrew Regan is an online, freelance journalist who lists travelling and rugby among his interests.