Serviced versus Traditional office space cost comparison

Serviced versus Traditional office space cost comparison

Surprisingly, many businesses would save a lot of time and money if they were to use Fully furnished and equipped offices. While costs may look high initially, the rent that you pay includes almost all of the costs that you would normally expect to pay on top of rent in a traditional office. Yes, within Services Office model there are no additional costs for service charge heating, power, water rates, common part and office cleaning, use of kitchens, security, building & equipment maintenance, insurance etc. The only additional costs, on top of rent, is telephone usage which is normally charged at standard BT rates.

Typically, a company with up to 15 people moving into Fully furnished and equipped offices can save as much as 50% when taking into account the cost of occupying and equipping traditional office space. Other hard to quantify cost factors are:

1. Flexibility msee more about flexibility
2. Time saved by not having to negotiate a classic contract, talking with real estate agent, having extensive fit-out period and hiring overheads.
3. Cash flow advantage - no upfront capital investments, no personal expenditures, no maintenance and ownership costs of cabling systems, fixtures and fittings etc.

Occupation of Fully furnished and equipped offices by companies with over 15-20 people can also be cost effective. The main reason for this is that you only pay rent for the desk area that you occupy and not for corridors, meeting rooms, receptions, server rooms, kitchens and so on. On the other hand a company leasing traditional office space for 10 years can’t accurately predict 10 years future headcount numbers (and subsequently the amount of required space) and very often they have a lack or surplus of space, which they still have to pay for. In the case of lack of office space, companies have to move to new premises in order to accommodate all their employees, and accept double the overhead until the old space is disposed of - as well as having to put off hiring until new premises are found and a contract is negotiated. That can take up to six months...

To understand more about the comparative costs of serviced versus traditional office space, we are preparing an officeadvisor interactive cost comparison. It will come very soon...

When to consider Conventional Office Space?

Conventional Office Space might be the best solution if your office needs to accommodate 20 or more employees and you’re certain of your business's future over the next few years. Other advantages for conventional office space will be

• More competitive operating costs for larger organizations
• Bigger opportunity to customize your office space to match your business's corporate image

Finding the right building and arranging conventional leased office space can be a prolonged task. To help find the right building, it's often wise to appoint an agent to assist in your search and negotiate the main terms of your lease. Unlike a Fully furnished and equipped office, where all the set-up and ongoing costs are rolled into one monthly charge, other running costs must be considered such as business rates, service charges, and buildings insurance.