With the Hong Kong economy facing various challenges, many companies want to change their operation and management to a more flexible way. Instead of traditional offices, many business owners are now choosing to use serviced offices because of their cost efficiency, flexibility and practicality.
Why should you choose serviced offices? What are the benefits?
What is Serviced Office?
Serviced office is increasingly perceived as a mainstream occupancy option that can be considered by companies of all sizes and natures. It provides the space you need from an office with the hassle of getting it set up or having to find utilities.
Serviced office also known as a managed flexible office space which is a furnished office space in a professional business environment and ready for immediate occupation.
Serviced office providers take on the responsibility of maintaining the office premise and providing a wide range of business services, including reception and telephone answering services, secretarial support, conference and meeting facilities, high speed internet access and so on.
5 Key Benefits of Serviced Offices
Flexible, Short-term LeasesServiced office rental terms are flexible, and many spaces offer contracts between one month and one year and usually have renewable agreements. Such short term lease agreement is beneficial in particular to start-ups usually with unstable cash flow, or even large-scale companies looking to expand and “test the waters” in new markets.
Cost Savingi) Set-up costs It is very time consuming and costly for business owners to set up a new office. The owner is required to pay for the decoration fees and rental fees before and after using the office. If you choose serviced offices, you do not have to worry about the above costs because everything is set-up for you. Moreover, facilities such as break-out areas, meeting rooms and video conferencing system are also available without additional investment, resulting in substantial savings and reduced upfront costs. ii) Operation costs On the other hand, serviced offices can help you to save the costs of human resources. You do not have to recruit receptionist which costs salaries, medical insurance and MPF fees. Allowing you place more emphasis on your business and less on hiring people to conduct mundane tasks such as cleaning and answering phone calls.
Increasing Circulating CapitalTraditional office usually requires business owners to pay 3 to 4 months rental deposit. As a result, the amount of your circulating capital is limited because part of the money is holding by the landlord. Comparing to traditional office, serviced office requires a lower rental deposit, usually 1 to 2 months rental deposit. The differences of rental deposit between traditional office and serviced office can be more than one hundred thousand. This amount of circulating capital is critical for small and medium enterprises to improve their cash flow and focusing on business expansion. Cost Comparison between Traditional Office and Serviced Office in HK: Basic Requirements
Traditional Office Serviced Office Area for 2 people 500 sq. ft (Including workspace, pantry, meeting rooms, etc) 100 sq. ft (Accommodating for 2 workstations and storage) Shortest lease term 1 year 3 months, or less Renovation time at least 1 month no need, immediate available Traditional Office Serviced Office Rent HKD12,500 (Ref: HKD25 per sq. ft) HKD7,000 (Ref: Office for 2 workspace) Shortest lease term 1 year 3 months, or less Renovation time at least 1 month no need, immediate available Lease deposit HKD37,500 (3-month) HKD7,000 (1-month) Agent fee or taxes HKD6,625 NO NEED Renovation cost HKD30,000 NO NEED Electric devices HKD30,000 HKD15,000 (For computers or notebooks only, other devices are provided in common area) Total Expenses HKD116,625 HKD29,000 Traditional Office Serviced Office Rent HKD12,500 HKD7,000 Utility HKD3,000 no need (provided) Internet HKD1,000 no need (provided) Total Expenses HKD16,500 HKD7,000
Cost Efficiency for setting up office in Premium Location
Projecting the right image is a crucial element of business success. Choosing a grade A office in a premium location such as Tsim Sha Tsui and Wan Chai can help you to establish a good business image but it requires a lot of money at the same time.
Serviced offices are often located in premium areas where allows you to get setup in a place that represents your particular industry. For example, if you run a financial firm and have a serviced office in Wan Chai, you will automatically be ahead of your competition. Being in a location that represents your industry also provides greater networking opportunities if you want to expand your business with others.You can establish your business image in a premium location by paying one-third less in rental fee.
Professional Business Support ServicesIt is quite complicated for small and medium-sized enterprises to set up a new office at the beginning. It takes a long period of time from looking for a right place to start using the office. At serviced office centre, office facilities often come with a myriad of professional business services that could be arranged upon request by businesses. Services might include company formation, accounting and tax advisory, secretarial support, HR consulting and more. Companies can benefit from fully-supported office environment.
Tips for Finding Your Dream Office
As serviced office is becoming more and more popular in Hong Kong, what should you be considering while choosing it? We have listed some tips and details which can help you to choose a right office.
- 24/7 access to your office Generally speaking, there is no time framed for using serviced office. You have unlimited access for high-speed internet, telephone and working space. However, some details you should pay attention to, for example, reception desk and the operation time of air conditioning. Although the reception service and air conditioning are provided, the operation time is usually between 9 a.m. to 6 p.m. You will have to pay extra money for the air conditioning service during non-office hour.
- Additional Service Charges (Conference Room, Printing Fee) Different sizes of conference room are provided by serviced office centre. The service charge is based on how many people and how long you use it, usually there is a discount if you are using serviced office. If you do not have a printer, you can use the printing service provided by the centre. The print fee is around HK$0.5 to HK$3. If you have a lot of printing documents, it is better for you to have your own printer.
- Coffee and Tea Some serviced office provides free drinks (coffee or tea) at pantry, some of them do not.
- Privacy Since there are many other companies using serviced offices in one centre, you should pay attention to your company and personal privacy. For example, you should avoid leaving over private documents in public area, like printer and meeting rooms.
- Transportation Besides the working environment and facilities, having a good transportation network is very important. Is the location easy for you and your client to reach with short traveling time? For example, many serviced office centres choose to locate near MTR station because it is easier to be found.
- Company Background It is important for you to choose a stable serviced office centre. We suggest that choosing a company with good reputation and history background can reduce the chance of changing office location frequently.
- Other Business Support Services (Tax Advisory,Secretarial Support) Some serviced offices provide tax advisory and secretarial support. These services are very helpful for owners who just start-up their own business as they are not familiar with the government laws and rules.