Serviced Offices: The What, Why, and Who

Serviced Offices: The What, Why, and Who

What are Serviced Offices (SO’s)?

One of the greatest start-up hurdles in business is finding the right premises for your company to work. Buying land, a building, or office space requires a lot of capital—something that start-ups and small to medium sized businesses often do not have.  Committing to an exclusive office space for long periods of time reduces your firm’s flexibility and ability to adopt to changes in the market environment. Thankfully, there are other options. Shared or co-working spaces might be popular amongst young start-ups, but even these firms are beginning to opt for Serviced Offices (SO’s). SO’s are usually commercial buildings owned by a facility management company or other firm that leases office space to other companies. These leases can involve individual offices or event complete floors. The “serviced” portion is unique to each company’s offerings. This can include housekeeping, maintenance, IT infrastructure and services, reception services, security, and other amenities.

What types of companies use Serviced Offices?

A common misconception is that SO’s are only good for start-ups and small businesses. However, any organization that needs the benefits of an exclusive office space without the financial commitment of a long-term lease can benefit from a SO. Common candidates for this setup include:

  • Companies facing space ceilings
  • Firms located in high-cost real-estate areas
  • Established organizations setting up remote locations
  • Pop-ups and Start-ups
  • Growing firms needing short-term space during expansion
  • Older firms that enjoy flexibility and scalability

Just because your business doesn’t fit exactly into one of the above descriptions, that doesn’t mean you can’t benefit from a SO. Let’s walk through the benefits every firm enjoys that uses this platform.

1. Simplified Accounting

With serviced offices, your company only has one bill. Rent, maintenance, security, etc., every part of the SO experience is packaged into a single fee. Simplifying costs gives your firm a better understanding of what an operating space actually costs you and reduces the labor-hours your finance department spends keeping details in check.

2. Reduced Costs

SO’s don’t just simplify your operating costs, they lower them too. The Chartered Institute of Purchasing & Supply (CIPS) examined the total costs involved in occupying office space in several locations around the UK.  Parameters included occupancy periods of between 1-36 months and space requirements for 1-60 people. The results were astounding. Firms were able to achieve up to an average of 78% cost savings over conventional office spaces. The Institute noted that the savings for smaller numbers of people over shorter periods of time exceed that of large numbers over long periods. This is probably due to the high cost of amortizing capital expenditure items over shorter time periods.

3. No wasted time when moving

Switching operating premises can result in serious, expensive down-time for your company that could be spent furthering your success. SO’s are already set up and ready to use. Communications, IT infrastructure, office equipment, everything your company needs to operate will be ready when you walk in the door. Even better, you won’t have to buy or update any of this equipment, further reducing your capital expenditures.

4. New Market Testing

Exploring new markets through split testing can be an effective way to discover what marketing strategy will work best for your firm. SO’s short-term commitments and low moving costs enable you to test multiple markets in different locations in a relatively low risk manner.

Who Offers These Services?

Operating out of Shanghai, the Asian market holds a special place in DBA’s heart, so let’s focus close to home. WeWork is one of the leaders in shared/co-work spaces, with twelve buildings here in Shanghai alone. In terms of Serviced Offices, CEO SUITE offers some of the most professional, modern spaces available. They opened their third location in Shanghai in June at the Lujiazui Financial Plaza. It’s located within the world-class development of Lujiazui Free Trade Zone and Shanghai Pilot Free-Trade Zone.

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