16 June 2006
Office design and re-fit specialists are consistently impressed with the number of clients who put staff morale top of the agenda when undertaking an office move or refurbishment. Acoustics, lighting, air quality, colour schemes and office layout will all help to generate a productive and motivated workforce. But if you haven't chosen a property that will support your business as it develops over the coming years, then the benefits of a happy workforce will be significantly undermined by the money you're haemorrhaging on your office space. That's because for most companies, property is the second highest business cost after wages. Which in turn means the right premises can be key to the success of your business. Yet the situation remains that many companies are failing to address property as a fundamental business requirement.
Most business owners may agree that the basic agenda for business relocation is to reduce cost and increase profits. So why is it that research shows UK businesses are throwing away an incredible £18 billion a year through inefficiency in their use of property?
At the same time, the Royal Institute of Chartered Surveyors found that with the right property strategy, UK businesses could boost profits by up to 13 per cent a year. Is your current property going to be suitable for your business in the next five years? If not, you'll be contributing to the billions of pounds lost every year through poor property planning. Isn't it time you moved property higher up your corporate agenda?
To put it bluntly, being in the position to make an informed property decision can make the difference between the future success and failure of your business.
So how do you make sure your next property not only meets your long-term business goals, but will proactively and positively shape the future success of your company?
Making sure your next property is a key operational asset requires a professional approach and a detailed understanding of your wider business strategy. Far too many businesses try to handle a major cost like premises without the necessary tools or vision.
While the following are not easy issues to tackle, taking them into full consideration will give you the information you need to make an informed decision and will pay dividends in the long run.
How much will your company grow or downsize in the next five years?
Choosing a property that is perfect for your current business model may seem like the easy option, but if you want to avoid a costly move in the near future, then taking time to consider your long-term business goals and visualise the size of space that you'll need is worth the investment in time.
Does the building have space for expansion or an option for reducing or renting out redundant space?
Once you are armed with a vision of what size your organisation will be in five years' time, then you are in a position to view potential properties with a variety of options in mind. If you think you'll be downsizing in a couple of years, ask yourself, how feasible will it be to rent out the extra space?
How will the reception area work if there's more than one company in the building? What are the security implications? On the other hand, if you're planning on expanding you need to consider whether the property will accommodate all that a larger operation is likely to entail.
What equipment will you be investing in and needing to house?
Of course business expansion doesn't just mean an increase in head count. A bigger business will require more equipment, machinery, facilities and storage. Many companies fail to take into proper consideration everything they'll need to operate efficiently as they grow.
Will you require more parking or loading areas?
While parking is becoming an increasing luxury for many city-based organisations, if your current premises offers parking, you need to consider whether there will be sufficient space available if you increase your number of staff. For many businesses, expansion can also mean additional deliveries and distribution on a daily basis. Ask yourself; will the property be able to handle this increase in activity?
In the future will you want open plan, closed offices or hotdesking facilities?
A clear vision of how your business will operate in the next five years will really help when it comes to selecting the right premises and the most suitable office layout and design. While a space may appear too small for your proposed expansion, the increasing numbers of people working remotely or hotdesking may make this problem disappear.
What are the risks associated with the property?
Before you make any commitment to a property, you need to really probe on areas that will affect your final decision. Take time to find out what the crime rate is like in the area. Does the building have a history of subsidence or damp? How much will your insurance premiums be? What costs will you incur to bring the building up to your desired specifications? Are there any hidden costs for security, cleaning, rates or service charges?
If you find a property that generally matches your brief, but falls short on certain criteria, consider whether these are areas you can afford to compromise on. Remember, space costs money and every inch you waste will have an impact on your profitability.
Property is a key commercial asset. It's of vital significance to the future success of your business and as such it needs to be given proper consideration. If you can control this asset rather than let it control and restrict your business, then you're well on your way to a profitable future. Making sure your property is high on your corporate agenda and that your property plan closely matches your business strategy can be the best way to improve your long-term business prospects.
David Kirby is managing director of Concept UK