An Office with All the Services, but Where's the Convenience? ; Roger Trapp Asks If Business Centres Are Still the Answer to a Small Company's Needs

Article excerpt

When serviced offices arrived in Britain a few years ago, the idea seemed the answer to many growing companies' prayers.

Instead of having to undertake a laborious hunt for premises and then put down a big deposit while signing a long lease, entrepreneurs had the chance to move in almost immediately without committing themselves to a lengthy occupation and high costs. The idea seemed even more alluring with business centres prom- ising to take care of IT needs.

But is this sort of service really what the growing business is looking for? Are entrepreneurs so helpless that they cannot sort these things out for themselves?

Small firms and their advisers appear increasingly circumspect when they consider their property options. Tony Bogod is a partner with BDO Stoy Hayward, an accountancy firm which specialises in advising growing businesses. Evidence suggests, he says, that the most successful small firms are those which focus on their strengths. So the chance to avoid being distracted by looking for property or dealing with IT problems is welcome. "With technology today, a small glitch in the system can bring a business to a standstill," he says.

Such concerns, and the vogue for outsourcing all but "core" functions, created the conditions in which a variety of serviced- office providers prospered. Regus, for example, claims to be Europe's largest operator of business centres with 360 around the world offering 70,000 "workspaces". Founded in 1989 by chief executive Mark Dixon, it had a turnover of more than pounds 420m in 2000. But its first-quarter results, announced last week, suggest that the US economic downturn might be taking its toll, with Regus likely to come under pressure to trim its rates.

Such a move might come too late for small firms that feel priced out of the service. While pointing to the advantages of serviced offices, Mr Bogod also says they can be expensive.

This is a view shared by one small business founder who recently moved out of a serviced centre. "We've got 1,600 sq ft as opposed to the 400 sq ft we had before and we're paying less money," he says of his new West End premises around the corner from his old base.

He does not feel disadvantaged by having to take respon-sibility for his own telephones, computers and other office equipment, since that can all be leased. And he is relieved that he no longer has to pay extra for every person he employs and for such facilities as use of meeting rooms. But he does say that in taking on the new space, he had to pay a deposit that might have been unaffordable when he started out. …