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By James Watson, chief executive officer for TechSpace
9/16/08
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Doing business in today’s economy has become increasingly difficult for small- to mid-sized businesses – entities which comprise the majority share of the current U.S. business market. And while decreases in consumer activity do impact these organizations significantly, it is often the expenses imposed by non-core business functions that make survival in today’s economy financially unfeasible.
In order to survive and thrive in today’s economy, growing enterprises need to not only succeed at providing whatever product or service they specialize in – but they must also spend exorbitant amounts of money on the simple costs of doing business. To secure the type of office space that lends presence and prestige, entrepreneurs require large lump sums of money up front – often a year’s worth of reserves – as deposit. Not to mention the high costs of furnishing offices and workstations, setting up technology infrastructure, and staffing the essential, but non-core support functions of receptionist, IT engineering, janitorial and security; as well as the pay-out of taxes, insurance and utilities on office space. Especially amidst unstable economic times, these “high costs of doing businesses” simply aren’t practical.
Aside from financial burdens, business-owners must considerer the sheer amount of time that is put toward managing infrastructure issues. In an age where business moves at the speed of light and time truly is money – hours squandered on mundane, everyday facilities issues can add up to major losses in today’s fast-paced business environment. These small set-backs amass over time, and the accumulation impacts time left-over for strategy and growth – playing a strong role in a company’s ultimate success or failure. This current model is not working for many businesses, and as a result, the failure rate for start-ups continues to rise.
Today’s uncertain times also make it nearly impossible to predict whether a business will need to grow or downsize in the months and years ahead – making rigid commitments to a fixed amount of space a poor solution for growth companies. In fact, long-term lease agreements are the last thing a savvy businessperson wants to be tethered to – leaving them inflexible and unable to adapt with the changing marketplace. This also contributes largely to the unfortunate demise of innumerable companies.
Thus, the unstable economy across the U.S. has rendered the existing high-cost, commitment-intensive model for business facilities infrastructure an inefficient and impractical solution for modern organizations. The model has grown archaic and become out-of-touch with the needs of today’s small- to mid-sized business. Until now, a smarter, more flexible solution has been elusive.
Novel New Solution Meets Needs of Small- to Mid-sized Businesses
If a start-up company with 20 employees unexpectedly needs to hire additional staff members to meet the needs of company growth, a tremendous list of challenges become reality. Can the company end its current lease to relocate to a larger space necessary for this growth, and is there enough in capital reserves to invest in leasing new property? How quickly can the company get its new address printed on its letterhead and business cards? When can IT vendors transfer technology infrastructure to the new location and what problems may rise? Or, worse yet, what if this growth is just temporary and the company must downsize just as quickly?
Leading providers of integrated business facilities and infrastructure have pinpointed a winning formula, which may become the office space solution of the future: flexible, on-demand “alternative office space” that gives businesses what they want, when they want it, with no strings attached.
This progressive solution provides flexible workspace options combined with integrated state-of-the-art technology and business services. The concept takes non-core functions off the shoulders of business-owners. Managed business process outsourcing allows companies to control their overhead.
The best of these facilities offer advanced voice and data telecommunications, scalable Tier 1 IT infrastructure, workstation furniture, reception service onsite conference rooms, and more, as well as everything from mail room service, to office supplies. With these services professionally outsourced, businesses save time and money and are free to concentrate on doing what it is they do best.
Another area where businesses typically sink large sums of money is IT infrastructure and support. A centralized world-class data center, custom-designed to support the most comprehensive requirements of any business, can be a strong money-saver for smaller organizations. Services including virtual servers, Web and mail hosting solutions, 24/7 tech support, managed firewalls, co-location rack space, burstable bandwidth, data backup, managed storage, 24-hour network and system monitoring and complete disaster recovery and back-up services, are invaluable to modern businesses in an era where information is everything.
Aside from the financial savings passed on from centralizing business and technology functions to be shared between tenants, the value-added benefit of time preservation makes the concept exceedingly practical.
Scalable terms also assist in making this model a smart solution for start-up and growth companies – providing room for upsizing or downsizing as necessary without the high cost of moving. A modular floor plan featuring interconnected office suites can make adapting to the needs of any business quick, simple and easy. This flexibility combined with short-term lease agreements– allow companies the freedom to do what is best for their individual businesses.
Beyond Executive Suites
In the 80s and 90s, the concept of executive suites seemed ideal for a one- or two-man shop needing a physical address and a reputable corporate image. Alternative office space builds upon this idea, taking it to the next level and moving it into a completely unique category.
In stark contrast to the “one size fits all” business environments of the past – either intended for one person or a large and established entity – alternative office space caters to the highly-fluid needs of small- and medium-sized organizations. It serves them with scalability that allows them to change with the ebb and flow of business; it provides them with Fortune 100 business facilities and infrastructure at a fraction of the cost; and it allows them to focus on the core business they do best.
Rather than simply providing a small rented space for a single executive, alternative office space provides a new solution custom-tailored to the specific needs of small- to mid-sized business. While a business with two to 200 employees would struggle to work collaboratively if confined to highly-compartmentalized individual executive suites; alternative office space provides an interconnectivity of workstations and private offices that is highly conducive to working within a team environment. Whereas a business owner working in an executive suite could never simply knock down a wall when the business grew beyond the confines of a small space; with alternative office space modular office suites can be reconfigured without interruption of the normal business environment – and space is easily configured to better match specific needs of an individual business.
This innovative formula has produced a much smarter, more scalable solution for today’s businesses – a solution suited to the needs of the modern market. With so much uncertainty, the old model of doing business becomes obsolete. By preserving capital and keeping overhead to a minimum, this new flex-space model presents an ideal solution for growing companies, and a sensible new option for small- to mid-sized business owners to consider.
About the Author, James Watson, Chief Executive Officer of TechSpace
James "Watty" Watson is a co-founder of Enfrastructure, the predecessor of TechSpace, and serves as its chief executive officer. Previously, Watson was president of Koll Development Company where he was responsible for commercial real estate operations in the Western United States and Mexico. Koll has developed more than 75-million-square-feet of commercial real estate. A graduate of the University of Southern California, where he earned a bachelor's degree in public administration, Watson is a member of the Urban Land Institute (ULI) and the Society of Industrial and Office Realtors (SIOR). In addition, he is a member of the National Association of Industrial and Office Properties (NAIOP) and has served on its National Board of Directors. In 1993, Watson was appointed by Governor Wilson as State Racing Commissioner on the California Horse Racing Board.
About TechSpace:
TechSpace delivers flexible, on-demand, “alternative office space” and integrated technology and business services that give today’s small- to mid-sized businesses what they want, when they want it, with no strings attached. With multiple facilities across the United States, TechSpace serves both onsite and virtual clients with an innovative platform that relies on centralized outsourcing for everything from workstation furniture, mail room, advanced voice and data telecommunications, Tier 1 IT infrastructure, reception services and office supplies. Smartly-designed, interconnected modular workspace floor plans, combined with flexible, low-commitment agreements allow room for upsizing or downsizing as necessary without the high cost of moving. This formula preserves capital, keeps overhead to a minimum, and frees up companies to concentrate on enhancing their core competencies while more effectively managing their businesses. TechSpace has multiple locations throughout the United States – including New York, Orange County, Calif., and Boston. For more information, visit www.techspace.com.
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