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By Joanne Bushell, Vice President Africa, Regus
VENTURES AFRICA – I recently read some research that will leave many business owners speechless. It showed average rents for the most expensive office locations worldwide, and the figures are mind-boggling. They’re particularly hard to contemplate when 76 percent of business people think that lack of access to cash is an obstacle to entrepreneurs, according to Regus research.
A popular area in Kenya is Nairobi, which is the capital and the largest city of Kenya. You’d enjoy elegant surroundings and prestigious neighbours, but you’d still be facing maintenance and utility bills, reception salaries, and set-up costs on top of that. Data shows that between June 2012 and March 2013 property prices in up-market Nairobi increased by 8.4 percent. Nairobi’s rise as a hub for multinationals entering the emerging African market significantly increased office rents in 2012 making the Kenyan capital one of the most expensive places to let space in the world, a new property index say.
Not everyone needs an office in Kenya, but for young businesses, office location is important. Prospective customers and partners judge your business address and where you hold meetings. However good your elevator pitch, your image can be greatly tarnished if you work out of inconvenient or scruffy offices, or your phone rings unanswered.
The other real-estate issue small companies have to grapple with is fixed overheads. Even those lucky enough to afford high rents when they first start out may struggle at times if customers are slow to pay, or they lose a key client. Traditional fixed leases don’t give the leeway to navigate such blips.
Fortunately, there are other options for SMEs fazed by the cost and inflexibility of traditional office space. They include serviced office space, flexible and co-working spaces, walk-in business lounges, and virtual offices, and they offer SMEs the chance to do business at premium locations without breaking the bank.
There are several different possibilities for SMEs to raise their profile by using flexible and virtual workplaces, among them:
· Virtual offices can provide a top-flight business address, with telephone answering and mail forwarding, without the expense of physical workspace. Staff at the company can then work wherever it suits them. So the business ‘base’ could be Singapore’s Raffles Place, but the owner could work on the beach with a laptop, knowing the phone is being answered.
· Flexible workplaces offer a physical presence in prestigious locations, with built-in flexibility to move, upscale or downsize rapidly. Costs for staffing, maintenance and so on are all included, so budgeting is easier and there are no unexpected bills if the heating breaks down. In addition, business-ready workplaces spare SMEs from the costs (and time delays) of setting up IT connections, buying furniture and equipment, and hiring support staff. With less money spent on set-up, there’s more to invest in other aspects.
· Drop-in workspaces such as business lounges and pay-as-you-use meeting rooms allow entrepreneurs and others to work at some of the best business locations in the world, without paying per square foot. For example, Regus’ 100-country network of business lounges allows people to hire meeting space on Fifth Avenue, meet a colleague in a business lounge in Geneva’s Rue du Rhone or touch down at office space in London’s Mayfair, as well as helping them expand into frontier markets like Nairobi.