THE $200 OFFICE

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THE $200 OFFICE

 user 2006-06-13 at 11:55:00 am Views: 63
  • #15689

    The $200 Office
    For
    small businesses in a never-ending fight for clients, first impressions
    mean a lot. So when a home-based financial planner wants to impress a
    CEO, a meeting at Starbucks  just won’t do. Yet many entrepreneurs
    aren’t ready for theheadaches and expense of leasing commercial office
    space. The solution for some: the “outsourced office.”The founder of
    one of several companies providing flexible work space is Mark Dixon,
    CEO of Regus Group, http://www.regus.com, a global firm with its U.S. base in
    Dallas. He recently told Smart Answers columnist Karen E. Klein how his
    entrepreneurial clients are able to cast a big shadow on a small
    budget. Edited excerpts of their conversation follow.
    What’s an “outsourced office,” and how does it work?
    Increasing
    numbers of small companies are realizing that they don’t need full-time
    offices. Broadband Internet connections are very cost-effective, and
    with voice-over IP or just a regular telephone at home, why do you need
    to have people working out of an office? Occasionally, though, you need
    a place to entertain clients, meet with your staff, or just get away
    from the spouse and kids to work uninterrupted. That’s what we provide.
    What are the terms, and how does an entrepreneur arrange for an outsourced office space?
    Say
    you or your team only needs a physical office location two or three
    days a week, or two or three days a month. Starting at $200 a month,
    you get access to the office space twice a month with a telephone
    number and a full-time receptionist to answer it all the time, use of a
    prestigious business address in one of 350 cities around the world,
    office equipment like copiers, printers and coffee machines, and
    Internet access.The only thing we don’t supply is computers; most of
    our clients bring in their own laptops. If they want filing cabinets,
    cupboards, and lockers to keep their things in when they’re not there,
    we can arrange that for an additional fee.
    That sounds awfully inexpensive. What’s the top end of the price range?
    The
    average price in the U.S. is about $600 a month, which includes access
    to one full-time office. That means you can put your family pictures up
    and leave all your materials there. If you’re looking for a location on
    Park Avenue or Wall Street, or in Palo Alto, or Trafalgar Square in
    London, we have space in those prestigious addresses, but they’re
    obviously going to be more expensive.Tokyo is probably our most
    expensive location, and that’s going to cost about $1,000 a month.
    Still, if you’re a one-person company or a company that employs 10 or
    fewer people, our price is about 40% cheaper than you’d pay on your
    own. As companies get larger than 10 people, obviously, it becomes less
    cost-effective.
    How much time and effort go into setting up an outsourced office?
    It’s
    actually just a one-page agreement like you’d sign when you’re renting
    a car, and you can do it all online, including paying by credit card.
    You can walk into the office tomorrow, or next month, for a day or a
    year. You don’t have to set up a long-term contract, and there won’t be
    a landlord asking you for money when you leave.
    How many entrepreneurs are taking you up on this deal?We
    have about 100,000 companies and 200,000 individuals a day using our
    furnished offices, meeting rooms, conference facilities,
    videoconferencing suites, and business lounges internationally. Some
    facilities, like the videoconferencing suites and conference rooms, can
    be booked by the hour. Business lounges are furnished rooms near
    airports and hotels, where road warriors can go to do some work between
    client calls.In the last couple of years we’ve seen unprecedented
    growth. This year, we’re projecting 30% year-on-year growth over
    2005.Aside from the flexibility for home-based business owners, what
    are the major benefits for entrepreneurs?Negotiating a long-term
    commercial lease is a time-consuming and even risky undertaking,
    because if your company hits a downturn, you’ll be on the hook until
    the lease runs out. It also costs a lot to furnish and equip an office,
    and most people don’t even realize that. They’re calculating the price
    of the lease per square foot and forgetting about choosing the
    furniture, upgrading the wiring, maintaining the facility, and taking
    out the insurance. All that small stuff can add up to a large headache,
    and it’s not productive time for the company.
    How does your business model work?
    The
    majority of our customers are taking the full-time packages, with the
    part-time packages in the minority. So we have a solid, long-term book
    of business from our full-time clients that covers our expenses. The
    part-time and virtual users maximize our profitability, so we can be
    very flexible with smaller companies and startups. We like to operate
    that way, because we see those clients as our future full-timers.
    What are the virtual users getting?
    They
    are getting a local address and telephone number, with a receptionist
    to answer the telephone, take messages, and sort and forward the mail.
    This is really a popular concept for small companies that want to
    venture into an overseas market, but are put off by the idea of braving
    their way into a different country and culture and trying to establish
    a physical presence there.
    How do entrepreneurs set up international outsourced offices?
    They
    can contract for part-time or full-time use of the office, which may be
    in London, India, China, or any one of 63 countries. I think our
    services overseas are even more valuable than they are in the U.S.,
    because you’ve got the same ease of setup, but you’ve got staff who
    speak the language, understand the culture, and help you get started in
    business quickly and effectively.Renting an office can be a minefield
    in a place like India. It can take months to accomplish. If you arrange
    for a place online, before you even get on the plane, you’ve got a
    local phone number, an e-mail account, and an address to go to. You’re
    in business from Day One.
    How does the pricing work overseas?
    It
    can be quite different from place to place. An office in India is
    relatively cheap in dollars, for instance, while Japan is relatively
    expensive. The main thing is that you have an office where things feel
    and look the same as they do at home. Knowing where things are and
    feeling comfortable is really important when you’re operating in
    another country.Isn’t that kind of homogenous “rent-an-office” feel
    sometimes criticized for giving off a cheap, unprofessional vibe?Yes,
    but that’s not what we’re doing. We’re providing high-quality offices
    with staff who are physically on-site. When a client walks in, it looks
    like any other quality office. This is not a call-center-driven
    operation. If you’re a full-time client, we can do accent painting for
    you and have your logo printed up and hung over the door.
    Where do you see your business going in the future?
    Well,
    over the last 17 years, we’ve seen almost constant growth of mobile
    workers and home offices. In the last three years, it’s really picked
    up. Our plans are to open many more centers in both urban and suburban
    areas, because a lot of home-based business people want a part-time
    office close to home.We’re even negotiating with a new home developer
    to put one of our centers in the midst of a new housing development.
    Everything would be connected up throughout the development with WiFi,
    and our center would be a hub available to all the people in the
    neighborhood who are working from home. We haven’t signed anything yet,
    but the idea is promising.