The key to business success lies in the ability of entrepreneurs to recognize the need for change, understand how to effect change, and quickly implement such changes with the best timing. This ability to affect strategic change is the result of a number of factors that enables a business to modify its competitive position.
Not being wedded to a concept and therefore being open to explore solutions, being aware of possible alternative actions, understanding customers to offer the best customer experience, understanding employees and their needs, maintaining low or variable overhead and implementing an organisational structure and systems that are fluid, are all important considerations for change management.
Companies from large multinationals to entrepreneurial businesses are likely to feel the need for change at some stage or other, and the need for a recalibration of their operation and competitive position in a drive towards augmented growth.
The Risks of Change (and not changing)
Nevertheless, every change initiative comes with inherent risk. While there are a number of cost and commercial reasons why an entity may consider change, it is also important to understand the implications of this change. Certainly, achievement and goal fulfillment also involves a process of embracing risk. After all, change initiatives are born from a risk analysis – a conclusion that the risk of doing nothing is higher than the risk of embarking on new initiatives.
The great news is that risk management is not rocket science. The options are numerous and the right answer to choosing the right solution may often be straightforward. Options may range from setting up a regional centre to offshoring or nearshoring support services. Globalisation, operational and administrative benefits, regulatory or compliance needs and tax incentives are all factors which motivate companies to explore the relocation of their business or in whole or in part.
Therefore, there is really not a right answer as to how and where a business should implement this change. It depends on a myriad of factors, but a supply chain model highlights the options which are available.
Location is Key
The location of the heart of the operation – the central entrepreneur – is key, as it will often also hold the group’s intangible assets, and so identifying an appropriate IP tax regime can significantly improve the group’s effective tax rate. The group can benefit from excellent commercial regimes, access to a sophisticated labour force and opportunities to manage tax arrangements more effectively. The choice of the holding company location is determined by shareholder considerations as well as company law.
Shared services are often relocated to overseas jurisdictions. A technology centre could be responsible for R&D, and therefore its location will be influenced by access to appropriate staff and possible investment incentives from government.
Serviced Office Space
Serviced offices can take away the burden of the back office, allowing such companies to focus on their core activity, provide a single point of contact and streamline suppliers, increase efficiency, decrease cost, reduce risk and increase visibility, speed up in-house processes by drawing upon the local knowledge and networks and rely upon local expertise to avoid reputational risk and regulatory fines.
There are indeed many ways of implementing change and similarly, there are many options how to mitigate risk. Taking shared services or serviced offices as example, it is a proven misconception that flexible means temporary. For instance, the ability to move into a serviced office quickly on a rolling contract and without a long-term financial commitment is ideal for businesses with hard-to-predict office space and infrastructure configuration needs. More importantly, it allows businesses to respond swiftly to market or business fluctuations.
A serviced office solution can certainly be ideal for a start-up looking to test the waters in a chosen jurisdiction or location. However the industry is evolving; research indicates that of those businesses who opt for the serviced model, a significant proportion are extending their stay for two, three years and longer periods.
Flexibility in the Workspace
Today businesses are recognising the fact that they need to be as flexible as possible for their success; they are increasingly attracted towards such flexible agreements, the value that they get is very advantageous and therefore they stay. Even global corporates are starting to include serviced office space and solutions in their wider property portfolio; the possibility of having your fee earners mixing with a vibrant community of up-and-coming entrepreneurs can do wonders for networking, morale, not to mention growing your client list, particularly in such spaces which are discerning in the acceptance of clients and those which foster a productive and pro-business ecosystem.
‘Flexibility’ is an attribute that businesses of all types and sizes are coming to appreciate for all sorts of reasons. It is being understood that flexibility is luxury all businesses can afford.
Flexible workspaces, flexible working practices and risk mitigation are commonly intertwined. A relocation of activity to a shared office space provides the ideal opportunity to roll out or to extend flexible working arrangements. The modern serviced office is completely geared up for this, with 24/7 access to facilities usually coming as standard, along with convenient flexible workspaces which are ideal for employees who work mostly from home but who call in from time to time for specific tasks, meetings or simply to touch base.
Serviced offices are often available with instant occupation. As the offices are furnished and offer ‘plug and play’ connectivity, companies can move-in and get straight down to business. The flexibility allows companies to add to or reduce space at short notice to meet ever-changing economic and business needs. It also allows businesses to test new geo markets without the expensive or risk of committing to any long leases or agreements.
Cost Benefits through Shared Space and Services
With a serviced office, cash flow is improved, where clients normally pay monthly rather than quarterly in advance as with conventional workspace. The monthly charge is often inclusive of rent, rates, utilities, cleaning, maintenance & security. IT and telecoms bundles are also available. Serviced office providers often allow tenants to share meeting rooms, equipment and other resources, providing reduced costs and access to facilities which may otherwise be unaffordable. Most serviced offices boast an on-site centre manager and fully staffed reception team, with a call answering and mail handling service. They may also offer admin, IT and secretarial support services.
The serviced office sector has undeniably evolved into one of the fastest growing sectors in the global commercial property market, providing innovative flexible property solutions as an alternative to traditional long lease terms. It is also gaining popularity in Malta, with an ever increasing number of centres developing around the island.
Serviced Offices: A Growing Industry
The Business Centre Association (who harvest information on the business centres, serviced offices, flexible workspace & virtual offices in the UK and worldwide) suggest that the industry is bound to double in the next five years. For the serviced office operator and owners this is good news overall, but means that the need to keep improving the quality and the competitive ability of their offering remains of paramount importance.
The list for attention could be rather daunting, such as exterior and interior maintenance, updating of reception and common spaces for a great “first impression”; office decor and furnishings; making sure common areas such as the boardrooms, meeting rooms, lounge area, and facilities are refreshed; marketing and promotion.
Conclusion: Serviced Offices Help Mitigate Risk
The decision for a business to establish a suitable temporary office, or a new office, for small or a large team, can be a very expensive affair. There are numerous costs to consider including IT infrastructure, office furniture, equipment etc. All are prime concerns that can take those responsible away from the primary aim of running a successful business. Within a serviced office environment, these burdens are taken care of with assurances of furniture, facilities and security, freeing businesses up to continue in their ambitions to make an impact.
Finally, the implementation of change can not only be a minefield fraught with risk, but also an expensive drain on vital resources. Time and money gets spent on doing things that are ‘non-core’, whether done internally or provided by outside providers. Serviced offices can therefore be enablers of change, a tangible opportunity for risk mitigation, access to invaluable knowledge and network. The future is leading towards flexible workspaces which not only help to mitigate such risks, but provide a tangible, multidisciplinary, multicultural solution that can boost the growth of any business; be it a freelancer, sole-trader, start-up, SME or corporate, where serviced office members are offered the widest range of services.