THE $200 OFFICE
THE $200 OFFICE
2006-06-13 at 11:55:00 am #15689
The $200 Office
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?
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?
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?
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
How much time and effort go into setting up an outsourced office?
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?
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?
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?
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?
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?
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.