A Smart Alternative to Setting Up A Traditional Office

For most companies, having a proper physical office isn't just a nice thing to have; it is vital for one's business. And it's not just having an actual physical office that is important, the location and accessibility to others is just as important.

Unfortunately, in today's modern business landscape, the cost of setting up a traditional office can be quite astronomical and especially intimidating and unattainable to new start up companies. Let's take a quick look at what you are most likely looking to spend when setting up a traditional office.

First you have to find a strategic location. You want to be right in the middle of where the action is, and when we're talking about Metro Manila, your best bet is Makati City. In Makati, overall average rents have already reached over P1,000 for every sqm per month. This means that, assuming you rented an office of around 100 sqm, it would cost you P100,000 a month or well over one million pesos a year. This does not yet take into account the three months deposit you would have to pay to secure the lease or an additional P300,000. And nowadays, most offices require at least a two-year lease. Locking you in and leaving you little options should your business situation change drastically within that period.

Secondly, another thing to consider is that a traditional office would more often than not have a conference/meeting room that most likely won't be used all the time, but will still be factored into your monthly rent as if they were.

Thirdly, you need to cost in setting up a landline phone and or high speed Internet in the office. According to PLDT, a good bundled package would cost you at least 1.5 to 3K a month plus set up fees. And once again, you would be locked in once again for at least 2 years. 

And finally you need to factor utilities such as electricity and water as part of your monthly expenses. And we haven't even talked about the personnel that you will most likely be needing such as an assistant/receptionist or IT support to keep you business running smoothly. Basically, this means that for the first two years of operations, I would have start up costs of at least three million pesos or more just for rental and furnishing your new traditional office.

Now lets look at the alternative, a serviced office.

The first crucial differentiator between a serviced office and a traditional office is flexibility. Unlike a traditional office that usually locks you in for at least a year to the same office space, a serviced office is more like a hotel, which you can book for a day, a week, or even just a couple months. This lease flexibility allows your office to grow with you.

Let's say you are starting out and have only yourself and your personal assistant, instead of renting out a full 100sqm space from the get go, you can start with a modest and affordable 10-15sqm space at 40-50k/month. In a couple months, maybe your business does so well you need to take in more employees. You can easily upgrade your lease to a larger space and so on. Your serviced office is able to grow along with your business.

Next, remember the conference/meeting room that you don't always use day to day in a traditional office but pay for as if you do? Serviced offices solve this by offering these business facilities on a "pay as you use" basis. If you don't need a conference room then you don't need to pay for it. Period.

The second main differentiator for a serviced office is that it is already set up. You don't have to bother looking for a contractor or even wait a couple months for them to finish setting up your office. A serviced office comes ready to use. Sign a contract and start your business right away, there is no time wasted. And when we say set up, we mean set up. You have your high speed Internet hooked up and private phone lines as added services as well. The cost of all this, including your utilities such as electricity and water come all neatly bundled in just ONE monthly bill.

Finally, when it comes to personnel, many serviced offices already have their on site staff of receptionists and IT support all ready to assist you with your business needs. Since the staff is there for all tenants of the serviced office, their employment cost is shared as well and once again neatly included in your monthly bill. 
At face value, the serviced office monthly cost may seem high as compared with a traditional office. But what many fail to consider is that the monthly rent of a serviced office is just a consolidated amount of all the various expenses you would also be paying for in with a traditional office. And if you consider the flexibility, the plug and play features and convenience that a serviced office provides that a traditional office cannot, it almost seems like a forgone conclusion that a serviced office would be the better choice.