Q3 suggests further growth for start up businesses
In August 2009, officebroker.com produced a report based on single workstation requests for serviced office space in the first 7 months of the year. Statistics show that within this time frame, enquiries for single desks were up 42% in 2009 when compared with the same period last year.
This increase signalled a surge in start-up businesses and the self-employed, which was expected to be related to the recession and a steady rise in redundancies and unemployment.
As a continuation of this earlier report, further research into this trend has been carried out by officebroker.com over the last two months, which completes the first 3 quarters of 2009.
Overall, results suggest sustained growth in entrepreneurial activity, as single workstation enquiries have continued to stay significantly ahead over the last two months and over the first three quarters as a whole, when compared to the same period in 2008. See the below graph for clarification.
The below graph shows the pattern of enquiries for single desks over the first three quarters of 2009 when compared to the same period in 2008:
However, despite a continued pattern of growth over recent months, by the close of Q3 2009 figures have shown a slight month-on-month drop.
In the above graph, the pattern representing single workstation requests for 2009 has shown a steady and consistent increase throughout the majority of the year. August produced the highest number of single desk enquiries of the year so far, a 14% increase over the previous month and a significant 43% rise over the same month last year.
Enquiry figures for single workstations then dropped by 9% month-on-month from August to September 2009 – the first major decline since March in Q1.
Possible reasons behind this drop in enquiries for single workstations could be as a result of a slight improvement in the economy, reflected by a slow-down in unemployment figures (ONS) and benefit claimants. Redundant workers that may otherwise have turned towards entrepreneurial activity may now be facing more optimistic job opportunities.
Other possible reasons behind the month-on-month decrease in single workstations could be as a result of the performance of the serviced office space market. During the economic decline office landlords and providers have fought to keep their buildings full and stay profitable, resulting in increased use of incentives such as rent-free periods, reduced rates and free deposits in order to encourage more business.
While this has enabled more start-ups and small businesses to take up office space for an affordable rate, recent news reports suggest that this ‘tenants market’ has begun to turn a corner, and as signs of a stronger economy begin to emerge, landlords may be starting to retract some incentives. As a result, more entrepreneurs may find themselves unable to afford office space, and may instead choose to delay choosing an office until their enterprise has become more profitable.
Further to this, in his article published on the Telegraph.co.uk, Entrepreneur and member of the BBC’s ‘Dragon’s Den’ Duncan Bannatyne says:
“My advice to any entrepreneur would be to save money on premises and employees in the tough first few months of trading; start slowly and build up business steadily, rather than splashing out on all trappings of success without actually making a profit.”
However despite a drop in enquiries for single desks at the close of Q3, overall the first three quarters of 2009 are almost 41% up over the same period in 2008. While many businesses are struggling in a difficult financial situation and unemployment figures are at a 14-year high, this is a positive sign for the small business community.
Commenting on the single workstation figures, Jim Venables, Managing Director of officebroker.com, believes that the drop in single desk enquiries from August to September is not necessarily a significant one.
“August is a big exception,” says Jim, “but overall we’ve seen huge year-on-year growth in single workstation enquiries from April through to September.
“I’m not surprised that enquiries for single workstations are up. There are a lot of people being made redundant, and this rise in single workstations and smaller offices seems to be linked to that.”
He adds: “From advertisy comes opportunity. People learn skills in enterprise, and they acquire the skillset which they can share with other businesses. There are a lot of good quality people out there that have been made redundant, and many of these skilled individuals are taking advantage of niche opportunities to set up their own business.”
Business Link advisor Ganesh Selvarajah also says that the downturn has given many individuals “food for thought” in the sense that they are looking at self employment as a “definite alternative” to employment, while research from Deloitte states that nearly two thirds of companies (62%) say the UK offers them the best opportunity for growth over the next three years.
If you’re an entrepreneur or you own a small business, serviced office space can provide the ideal environment to grow and strengthen your venture.
Serviced offices are typically flexible, and allow businesses to sign up for short-term periods from a matter of weeks up to a number of years. Contracts are simple, and typically exist on a rolling monthly basis, offering easy-in easy-out terms.
For help and guidance on finding office space to suit your start-up business, you can get free assistance from one of our office experts. We’ll help you find the right location, style and size of office to match your business needs, and weΓÇÖll be there every step of the way. From search to signature, our consultants will guide you through the process and even help you negotiate a suitable deal.
Start by searching online at officebroker.com, or contact one of our advisors direct and let us do the searching for you.