Office Space Advice
Regus Pushes Cost-Cutting Message to Small Businesses
Published March 17th, 2010 by Jennifer LeClaire
Regus is on its marketing soap box again. This time, the serviced office giant is targeting small potatoes customers: entrepreneurs, small businesses, start-ups and freelancers. Regus figures this group has a common need to remain financially nimble so they can adapt to the changing marketplace.
All this leads Regus into a discussion of fixed costs, specifically personnel, facilities and goods and services. Regus is pulling out the heavy hitters on its latest small marketing blitz, drawing from the wisdom of USA Today small business columnist Steve Strauss to help the company make its case.
“Cutting back on overhead expenses is a great way for companies to save money and remain financially prudent. Small businesses often get locked into large, fixed expenses unnecessarily,” Strauss says. “It’s essential to stay fluid as work demands ebb and flow. Business owners often see these expenses as unavoidable or costs that can only be reduced in the long term. There are immediate ways to adjust these expenses to keep businesses afloat and profitable in times of crisis, and as a long term strategy.”
Cutting Personnel Costs
Regus is quick to remind small business owners that hiring full-time employees comes with additional expenses, such as healthcare, 401(k) plans, and other benefits. Even when business is not going well, those expenses remain fixed. Regus suggests hiring freelancers instead, pointing to the fact that independent contractors make up 30 percent of the nation’s workforce. A Regus study from September 2009 reveals nearly 60 percent of U.S. companies expect to use freelance workers more often in the next two years. Why shouldn’t you?
Cutting Goods & Services Costs
On the goods and services front, Regus reminds small businesses that they don’t have to enter into exclusive, long-term contracts with vendors anymore and recommends negotiating flexible agreements that can be revisited quarterly to ensure competitive rates. Regus also points to just-in-time production and creative storage practices to cut down on inventory overhead.
Cutting Facilities Costs
No Regus public relations effort would be complete without a focus on cutting facilities costs and the tie in to serviced office space. Regus called getting locked into a long-term, traditional lease “corporate suicide” for small businesses. The company suggests turnkey options that let small businesses pay only for what they use without sacrificing a professional image. Regus also points to virtual offices as a viable solution for entrepreneurs, freelancers and small businesses that don’t need physical office space.
“Paying for unused, unnecessary office space is like throwing bags of money into a bonfire,” says Guillermo Rotman, CEO of Regus Americas. “Small businesses fall into the long-term lease trap all too often. Staying nimble by scaling expenses with projected or actual revenues is essential for any size business, but is absolutely crucial for smaller companies operating on much tighter budgets.”
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Elizabeth Sanchez March 18th, 2010 at 6:04 am
I think the most interesting tip from Regus in this story is using freelancers. Companies can build out a network of freelancers who use virtual office space and Internet technologies to stay in touch with clients. I know vendors that serve major companies that have their own network of freelancers on a virtual team. Virtual offices make this more than possible.
Bill Brookshire March 18th, 2010 at 6:51 am
I love this quote from Regus: “Paying for unused, unnecessary office space is like throwing bags of money into a bonfire.” How dramatic. It’s true, though. It doesn’t make any sense at all to pay for office space that you aren’t using. With so much downsizing going on in the corporate world in the past year and so many laid off executives launching start-ups, serviced office space and virtual office space is a much better value for many who need a professional edge without the high costs.