What are the Advantages and Disadvantages of Serviced Offices?

By Office Space TorontoIn standard13th January, 2014

We have been told that, while we promote the advantages for businesses to have an office space in a serviced office facility like our office business centre, we have not discussed the perceived disadvantages or the types of businesses that would not benefit from having a serviced office. First, we will re-state the advantages and then address the disadvantages that some critics have about them.

Serviced offices offer numerous advantages including:

Prestigious location and address
Generally, being able to boast about having a prime business location in the city centre and having that address on your business card and other printed materials, can allow your business to enhance its professional perception. It not only looks good to potential customers, but it can also make a good impression on vendors, prospective employees and financiers necessary for your businesses growth.

Back-office support
Most serviced offices have a pool of staff employed to provide you with office services to keep your back office running efficiently. These staffers provide services such such as a professional receptionist, secretarial services, IT support, office and building maintenance and cleaning staff, plus other services that you can utilize without having to hire your own staff. Not having to hire and train your own back-office support staff leaves you with more time to concentrate on growing your business.

Facilities and support ready to go
Serviced office space generally comes with the infrastructure that is ready to use, including things such things as a telephone system and Internet connection points, business equipment like fax machines, photocopiers and and network printers (most of the equipment found in business centres is of better quality than what most small business would normally be able to afford). Frequent upgrades and updates mean that tenants have access to the latest state-of-the-art technologies. In most cases, utilities such as electricity, water and heat are included in the rent. Most also have a kitchen area for office tenants and their staff to grab a beverage (often complimentary coffee and tea) and a microwave over to heat up a snack or your lunch. This type of ready-to-go office means you can move in and get to work within hours, instead of weeks.

Simple user-friendly office rental agreements
Leasing traditional or conventional office space often involves getting legal assistance to read and understand all the terms of the agreement. Typically, the rental agreements for serviced office space are written plain English because they do not need to be complicated with ‘legalese’ that the average business owner does not understand. Most business centre owners have designed leases to be ‘user friendly’ and avoid unnecessary terms and clauses typically found in commercial office leases. They understand the needs of small businesses to have simple agreements that do not require legal advice and can be signed in a short period of time, allowing for fast move-in.

Length of rental agreement and flexibility for growth
Not every business can know where it will be many years from now, so signing a long-term lease may not be beneficial. Most serviced office business centres allow for leases to be structured over weeks, months or even one-year or two-year terms for maximum savings. For many start-ups, small businesses who may be on the verge of rapid growth will often require the potential ability for overnight expansion without having to relocate to other office facilities or having to sign new leases or rental agreements.With Telsec Business Centres, tenants have been known to be in one office on Monday and be in larger or multiple offices on Tuesday to accommodate growth and increase staffing. The reverse can also be applied. If a small business needs less space, it can easily move to smaller office accommodations within the same office complex, without changing their business address or telephone number.

Networking opportunities
Serviced offices give you the unique opportunity to network and cross-sell with a variety of other businesses residing within the same facility. Often the networking is not so much structured networking – it is meeting that guy from the office down the hall from you when you are getting your morning coffee in the shared kitchen facilities, or when you are picking up a printing job from the printer room. But it is not just those chance encounters that facilitate networking. Many office business centres who offer serviced office facilities have formal networking events that are often organized by the tenants themselves in order to grow their contacts and their business.

Some people will tell you that using serviced offices can have some minor disadvantages. Here are some examples that we have heard and how we addressed them.

You may not be able to extend your personal brand and corporate style to your office space
While this may be true, not being able to feature your brand at the reception area is not usually seen as a major concern. Some serviced office spaces allow for some type of identifying signage on the interior of the individual office that a business occupies, but that usually requires consultation and approval.

There is less visibility for your business as it is unlikely to appear on the building’s main lobby directory
This is no longer true of serviced offices that are located in buildings with digital directories in the main lobby of the building. In fact, some business centres are able to have virtual office clients listed on the main directory.

Shared facilities may not be available when you need them
Yes, sometimes shared facilities such as a boardroom may not be available when you need it, but this is the exception and not the rule. By advance booking one of multiple boardrooms or meeting rooms that the facility has, you are assured that it will be available for your use at the time you need it.

Rental costs may be more expensive over the long-term for larger companies with more than 30 staff
This may be true, depending on the individual serviced office provider and the available space. However, if an office space provider has large team space and other offices available, the provider may indeed be able to accommodate a company with over 30 employees while keeping costs low. Considering what services are required – such as photocopying and network printing – the reduced capital cost savings could offset the cost of rent. In other words, with a serviced office, you only pay for the space you need and the services you use. Unlike some conventional leases (where you also must pay for your electricity, cleaning staff and hire a person to manage the facilities), all fixed costs of your serviced office are covered in monthly rent.

While there may be other perceived disadvantages, these are the ones our blogging team has encountered.