A Service Office is also called a business center, managed office and executive suites. They are situated in prime central business districts of key cities across the globe. A serviced office is usually located in a building that is managed and equipped by a facility management company or serviced office provider that leases out whole floors or individual offices to businesses or companies. A serviced office is operational and ready for immediate occupancy any time. There are serviced offices good for a single occupancy and even for 100 persons as adjoining offices and floors can be taken as one for expandability.
A Traditional Office is a space that is rented from a lessor or property owner. The business owner or lessee pays for the office set up which includes office layout and interior design, furniture, equipment, manpower, utilities and other amenities required to run a business office. The business owner takes care of all expenses incurred by the business office and this is on top of the monthly rentals. In most cases, a lease contract is a minimum of one year and defaulting on the lease contract will incur penalties.
Business owners are looking for ways to save money on their monthly rentals without sacrificing the location, area, facilities and equipment called for to run a successful business. Startups, SMEs and even MNCs find it taxing and income-draining to put-up and maintain a traditional office. Aside from prepping the space, added cost of setting up a traditional office includes procurement of furniture and equipment, and subscription to utilities such as electricity, telephone, internet and more.
Serviced offices seem to have higher monthly rentals as business owners overlook the comprehensive business office packages afforded by serviced office providers. Smart business owners are choosing serviced offices as they offer a more professional and cost-effective business profile.
Serviced Office Versus Traditional Office
The number one disadvantage of opting for a traditional office is the amount of money and effort invested by the business owner to set up a brick and mortar office. He has to furnish, equip, set-up auxiliaries and amenities for an efficient office setup. Hiring of office staff such as secretaries, receptionists and maintenance crew is the business owner’s responsibility too.
A serviced office, on the other hand, is packaged as fully furnished, equipped, staffed and connected. It is feasible to move in right after the lease contract signing. The office space is so designed so as to accommodate the requirement of the lessee. The furnishings and equipment are already set up and ready to use. Majority of serviced office packages come with a professional staff to handle routine office work such as handling calls, emails, maintenance and cleaning. Located in central business districts, serviced offices are mostly housed in first class buildings with prestigious addresses. The lease contract is very flexible as there is no long-term contract to lease.
With monthly rental inclusive of basic stuff, utilities and other amenities, a serviced office is economical. Hidden costs such as salary of basic staff, utility bills, internet connection, telephone service, cleaning and maintenance, and even insurance are included in the monthly rental. The use of furniture and equipment and facilities such as AV or conference room are also included in the rent. This way, a business owner is spared the hassle of dealing with numerous bills each month.
In the event that two or more serviced offices are located on one floor or space, common spaces such as reception area, corridors, pantry, meeting rooms, restrooms and such are excluded from the monthly rent. In a traditional office setup, these areas are included in the computation of rentable space.
Who Opts for Serviced Office?
A serviced office is the best choice for startup companies and small to medium companies which are not keen on investing a substantial amount of money for a longer term lease.
Established companies based abroad or in other regions of the country are choosing serviced offices to start a business presence in a new location.
Large companies based in traditional offices tend to source for serviced office space to accommodate its overflow of employees. The lease is usually short term.
A company that is in the process of moving from one office space to a new one might opt for a serviced office until the completion of the new office space.
There are clients who need an office space to complete a project or satisfy a job contract. Examples of project-based service office rentals include architectural and construction teams and film production teams.
Which will you rent a serviced office or a traditional office? Aside from considering convenience, the answer depends on your business’ requirements and the amount of money, time and effort you are willing to spend.
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