Serviced Office Advantages & Disadvantages -::- Conventional Office Advantages & Disadvantages -::- Information Request
Serviced Offices
:: Luxury Serviced Offices Located in Bournemouth, UK
Serviced
office or business centre
Serviced offices are a very rapidly expanding sector of
the property market and although the concept has been around for many years it
is only since 2001 that this area has come of age. The flexibility and
accompanying mobility afforded by the recent advances in technology,
particularly those relating to communications, has acted as the necessary
catalyst needed to launch the serviced offices sector of the office market.
Now serviced offices appeal to large "blue chip" companies seeking
space for several hundred people through to the "one man band " start
up company looking for a base or one-person office.
More and more business people are becoming aware that a serviced office is
the most cost effective and flexible way of operating a small business or branch
office. It ensures that all your office furniture, equipment, amenities and
surroundings are of a high standard without the capital outlay and ongoing
expense of acquiring and maintaining them yourself.
The popularity of serviced offices can be attributed to the tremendous levels of flexibility provided by these offices and also to just how easy they are to occupy. In many cases they are also substantially cheaper than conventional space.
Conventional
office
Conventional offices are usually acquired on a leasehold basis. Leases usually run from 2 to 20 years and a building acquired on this basis is normally taken by a company who are fairly sure of their space requirements for the foreseeable future; they do not intend getting any smaller nor do they see themselves growing substantially larger. In this instance the "stability" afforded by their "own building" far outweighs the negative aspects of a lease and the seriousness of the responsibilities contained therein.
Serviced
Offices
Advantages
Occupation can often
take place within hours of making your decision the legal work is usually
less complex than that which is involved in hiring a car!"
You will generally only be asked for a fully refundable and relatively small
deposit usually no other form of guarantee or assurance is required so your
liability is very limited
Totally flexible- should you wish to move from one office or centre to another
and usually only requires a relatively short notice period should you wish to
vacate
Most business centres are "ready to occupy" so no fitting out is
necessary and practically everything you will need will be already provided
this not only saves a tremendous amount of administrative "hassle" but
also means you can move quickly and with no Fit out costs.
All ancillaries such as photocopiers, video conferencing equipment, coffee
machines etc are usually provided and charged for on a pay per use basis you
are not responsible for the lease and should the machine break down it is the
business centre operators responsibility to get it fixed not yours
Infrequently used space, such as meeting rooms, is supplied and payable on a
"pay per use" basis so that meeting room you need for an average of 5
hours per week is not costing you rent, rates, service charges, heating etc for
all of the rest of the time when it is empty.
The buildings and equipment are generally of a higher quality than you may
otherwise have been able to secure on a relatively short occupancy basis.
Ease of administration generally all occupation costs for serviced offices
are billed using a total of two monthly invoices, one for the room element (the
rent) and one for the Service element, i.e. additional items used such as
meeting room hours or secretarial staff etc.
Depending on the standard of business centre (and they do vary greatly) the following is a summary of what is usually included within the monthly workstation cost of a serviced office centre (remember if it is your own building you would not only need to supply all of these items but ensure that all bills for them are paid).
Business centres and serviced office facilities also offer freedom from many time-consuming and problematic responsibilities, such as:
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recruitment and employment of secretarial, maintenance and cleaning staff; |
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negotiating with local authorities, fire officers, neighbouring properties, Telecom operators, gas, electricity and water suppliers, etc; |
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repairs and security; |
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fees and liabilities connected with the assignment of a lease. |
Business centres and serviced office facilities offer many advantages to business tenants, most notably:
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small flexible units with the opportunity to expand or contract total space as required; | ||||||||||||||||||||||||||||||||||||||||||||||
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high-quality instant offices with an prestigious image in the centre of the city or town; | ||||||||||||||||||||||||||||||||||||||||||||||
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convenient access to additional services, videoconferencing and conference or meeting rooms as required; | ||||||||||||||||||||||||||||||||||||||||||||||
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professional telephone answering, reception and secretarial support, with no need to employ one's own staff for these tasks; | ||||||||||||||||||||||||||||||||||||||||||||||
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ability to vacate offices at relatively short notice without continuing liability; | ||||||||||||||||||||||||||||||||||||||||||||||
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the opportunity to network with other clients; | ||||||||||||||||||||||||||||||||||||||||||||||
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rental inclusive of utilities, business rates and staff services, giving predictable monthly expenditure; | ||||||||||||||||||||||||||||||||||||||||||||||
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some provide rental license fee structures for an 'all inclusive' service where you pay only for the 'extras' (telephone call charges, broadband internet access, secretarial or meeting rooms etc.); | ||||||||||||||||||||||||||||||||||||||||||||||
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what is usually
included within the monthly charge at a business centre: |
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Disadvantages
| X | Usually you will be restricted from having your own branding on the building either internally or externally |
| X | You will be unlikely to be able to have a large say in the layout of the building other than that relative to the space you actually occupy |
| X | Can prove expensive if you need space for a long time. |
| X | You usually cannot have a say in the style, dιcor of the office or furniture. |
Conventional
Offices
Advantages
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Stability afforded by
long leases |
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Able to brand your own building |
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Can be cheaper if you already have your own admin staff and furniture. |
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More freedom to do what you want with the building (subject to landlords consent) |
Disadvantages
Can take a very long
time to find a suitable building and then to secure it on acceptable terms and
fit it out- from finding the building to taking occupation can take anything
from 2 months to 9 months depending on circumstances.
Often involves a lengthy and expensive legal process.
Occupiers are usually tied in to a lengthy and very inflexible lease which gives
them no easy way out should their circumstances change, i.e. growth or
contraction need to move to a different location
Can be very labour and time intensive to run a building for which you will have
responsibility i.e. payment and administration of all service bills, heating
lighting etc.
Can involve substantial fit out costs initially i.e. air conditioning,
furniture, telephone systems, IT cabling, lighting and partitioning etc. These
are all "upfront costs" and are generally incurred even before
occupation can take place a serious impact to cash flow.
Conventional leases usually contain very comprehensive repairing covenants which
means the occupiers of the building are generally responsible for the upkeep of
the building, this will involve not only making repairs when something goes
wrong but also redecorating and maintaining the building at regular intervals
determined within the lease.
Dilapidations At the end of a lease the occupiers are responsible for
handing the building back to the landlord in a fit state, this can often involve
fairly expensive reparation work. Including removal of any extra Electrical or
IT cabling.
Guarantees unless your company is relatively substantial/ profitable you may
be required to give certain assurances to the landlord. These can take the form
of Bank Guarantees, Directors guarantees or the placing of a large rental
deposit all of which could mean that if you default on the lease payments
for whatever reason it could cost you dear.
Can be very expensive should you wish to occupy the premises for a relatively
short term i.e. if the building needs fitting out. IT enabling, furnishing
etc it is unlikely that you will be able to adequately recoup these costs over a
period of less than 36 months.
The above is by
no means a definitive list or an answer to the ongoing question of which is
best, conventional or serviced office space however we hope it provides you with
enough information on which to make an initial, perhaps
exploratory decision on which one is most appropriate for your companies
individual needs.
