What is the flexible space industry?

Modern working practices, the desire for greater efficiencies and advances in technology have fuelled demand for flexible workspace

Twenty five years ago it would have been almost inconceivable that the senior management of any business in the UK could have foreseen a time when there would be a viable alternative to leasing or the outright purchase of commercial workspace. Today, however, flexible workspace and serviced offices, collectively known as business centres, are a major industry and one that provides businesses, both large and small, with an innovative solution to their workspace requirements.

The business centre concept was originally conceived in the US in the 1960s and was first introduced on this side of the Atlantic in the mid 1980s. While it got off to a slow start in the UK, it has been continually gaining momentum and has grown to the point where it is estimated that 3.0% of all commercial property in the UK is now available as flexible workspace.

Every business needs a degree of flexibility

The most important benefit that business centres provide is flexibility. In this current climate of global uncertainty one thing is certain and that's change. Change could happen slowly, but it could also happen much quicker than anticipated and this could result in a business needing to upsize, downsize or even relocate in order to effectively meet the challenges of their particular marketplace.

An atmosphere of change also produces uncertainty which makes long term planning difficult, if not impossible to do. Capital tied up in commercial property can severely restrict a company's ability to adapt and grow, while financial commitments to long term leases can be a major drain on resources, particularly, if a company needs to change direction or reconfigure itself.

Business centres, on the other hand, provide infinite flexibility. The length of tenure and the size and style of workspace is totally flexible so that businesses locating to business centres do not have to make any long term financial commitments, other than three months rent, and can enjoy the freedom to re-size their space requirements at fairly short notice to accommodate changes in their business.

This new found flexibility is being grasped energetically by the majority of SMEs and start-ups to reduce their financial risk and allow them to change the size, style and specification of their workspace as often as they change their business plans. This ultimately makes them very competitive and gives them an edge over larger corporate competitors which are tied into inflexible conventional property acquisition methods.

Much of the growth of the industry during the past 25 years has been innovation led as centre operators have continually introduced new products and services that enable businesses to work smarter and be better able to concentrate their resources on their core business while leaving workspace management to the operators.

Fully equipped and furnished offices are now fitted out with the latest telephony systems and handsets, IT networks and, in many cases, plasma TV screens. In addition, boardrooms, meeting rooms and training rooms are usually equipped with AV equipment and videoconferencing facilities, while reception staff are on hand to take care of visitors, arrange couriers, take messages and ensure that any customer problems or requests are dealt with quickly and efficiently. Many centres also have support staff available to cover for a customer's own staff shortages or to handle heavy workloads.

Recent innovations have included the introduction of cyber cafe areas where centre customers can purchase food and refreshments, watch TV, surf the internet and even network with other centre users over a relaxing cup of coffee. In fact, the ability to network with other businesses is proving to be a big attraction for business centre customers.

Another area where business centres have led the way has been the introduction and provision of cutting edge technology. Most centres can provide a wide range of IT services and these, coupled with underfloor cabling, allow customers literally to sit down, plug in and start work. In fact, many technology-led organisations are now finding that the level of technology available at business centres not only far exceeds that available at leased space, but they don't have to incur huge start-up costs to equip the space to meet their requirements.

Better budget control

Costs for taking space at a business centre vary considerably depending on the location of the centre, ie city centre or out of town business park; the size of the workspace or office required and its physical location within the centre; together with the quality of the building and its level of fit out and .

It is estimated that there are approximately 2300 business centres in the UK, which range from small owner-managed centres to large international chains. Whatever your requirements in terms of location, size, level of equipment and furnishings and cost, there is almost certainly a business centre package to meet your requirements.

Budget control is easy as all costs are transparent and inclusive of all building, heating and lighting, reception, security, maintenance, redecoration, refurbishment and cleaning charges. You get a single monthly invoice for a fixed amount, so there are no unexpected bills for rates, heating or lighting. Some centre operators are now even offering a totally-inclusive package which includes free broadband connection, free unlimited telephone calls and free refreshments for the ultimate in budget control.

In addition to controlling the day to day costs, businesses which take space in a business centre sidestep all of the liabilities normally associated with traditional workspace acquisition methods. Your rent is fixed for the life of the contract, be it three months or three years and there are no nasty building refurbishment or dilapidation clauses which are usually associated with long-term leases.

For organisations considering moving to flexible workspace in a business centre, the BCA advises that they should be sure to compare 'like with like' when analysing the costs of prospective venues. To make a real comparison, rental costs must include service charges, utilities, business rates, building insurance, cleaning and maintenance, receptionist, furniture and most significantly, telecoms, to generate a genuine cost comparison.

Speed to market

CEOs, MDs and FDs who have tired of the time, money and resources they have wasted on the search for new workspace combined with lease negotiation will appreciate the speed with which they can view and move into a business centre. Many businesses have literally moved in the same day they viewed the space and most operators have the resources to reconfigure the workspace and even handle request for any special technical requirements within a matter of days.

However, one of the lesser known advantages of flexible workspace is the ease with which customers can relocate or vacate entirely with the minimum of fuss and liabilities. The need to open a regional office, test a new market, launch a new product, conduct an audit or even accommodate a team handling a company take-over can require the movement of staff to a new location. Most of the larger operators can easily facilitate the movement of customer teams between their centres, while the bca is also available to offer practical advice when a business wishes to locate to an area where their present centre operator does not have a centre.

Companies which have tried to extricate themselves from a building on which the lease still has many months or years to run will know what a costly and time consuming process this can be, often incurring huge financial penalties. Whereas occupants of business centres rarely have to give more than three months notice and in this current climate of change this benefit reduces the risk to a company's bottom line substantially.

How to find the right workspace location

Searching for the right business workspace - be it relocating from existing accommodation or perhaps expanding into a new market or region can be very exhausting and time-consuming, even for an experienced facilities manager or property director. It can also prove costly if the wrong building, location of terms of tenor is chosen.

By selecting a BCA member location you have the assurance of knowing that the provider is a member of the only trade association representing the industry. The Business Centre and flexible workspace industry is thriving, and will continue to expand and develop as operators create new ways of meeting client needs.

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D2 Interactive