Small business office trends for 2009 Q1 and Q2
Based on officebroker.com enquiry levels over the first two quarters of 2009, where businesses requested five desks or under, we look further into the trends of small businesses, including where they are looking to set up, and how second quarter 2009 figures match up to Q1.
Small firms are at the heart of the economy – as stated by John Wright, national chairman of the Federation of Small Businesses – and there are certainly plenty of figures to back this up. Starting with our very own officebroker.com enquiry levels for the first half of 2009, a massive 77% of enquiries were for businesses seeking office space of five desks or under.
Out of this number, requests for two desks were the most popular – with single desk enquiries in hot pursuit.
The below table shows enquiries that were made for five desks or under, and how the figures compare for the first and second quarters of 2009 (percentages have been created using total enquiries for five desks and under for Q1, and then for Q2):
Q1 proved to be a stronger quarter for small business enquiries overall, with the majority of requests producing more enquiries in the first quarter. Only enquiries for 1 desk rose in the second quarter. Despite this, there were generally small differences between the two – showing reasonable stability across the small business sector.
A report by the British Bankers Association shows that lending to small businesses rose by ┬ú391 million in June 2009, and 50,000 small businesses set up new banking relationships at the same time. This adds weight to the suggestion that small businesses are maintaining stability despite the turbulent economy.
“These figures provide more evidence of the high street banks’ support for small businesses,” says BBA statistics director, David Dooks. He adds, “numbers of new business relationships continued to hold up, perhaps reflecting improved business confidence in trading conditions.”
Enquiries for two desks produced 21.7% of all 2009 enquiries between January and June 2009 – which shows that almost one quarter of all officebroker.com enquiries over this period are from businesses with just two employees.
This becomes even more significant according to recent government figures, which state that UK SMEs (small and medium sized enterprises) employ 13.5 million people, which is 59% of the UK’s total private sector workforce. SMEs account for businesses with anything up to 250 employees, therefore if our study included businesses seeking office space of up to 250 desks, the overall figure would be considerably higher.
Of our two-desk enquiries, the majority requested office space in Central London regions. The two most popular postcode areas are E – with E1 and E6 the most sought-after – and EC, with EC1 achieving the highest response in that remit. The third most commonly requested UK area was Birmingham – which came in ahead of Manchester, and also well ahead of the W and SW postcode regions of Central London.
Businesses of any size will often gravitate towards London – and small businesses are no exception. However despite the traditionally high expense of taking office space in the City, small businesses are currently able to seize the opportunity of lower than average rates. Recent officebroker.com figures show that in the first two quarters of 2008, the average cost per month for a workstation or desk area in Central London was ┬ú601 – but in 2009 over the same period, this average dropped by 26% to just ┬ú447.
Small businesses looking to set up in Central London will benefit enormously from taking on a serviced office as opposed to a traditional long-term lease. While the latter will tie the individual down for a set number of years, the serviced office provides a more flexible agreement, with license length contracts starting from just a few months. This means the business has the opportunity to trial a specific area, and move on after a short space of time if the location proves to be insufficient.
In addition, serviced offices provide many facilities which are all rolled into one monthly fee. This typically includes the likes of broadband, IT support and heating bills, meaning the client won’t have to pay extra if something goes wrong.
With areas of Central London the most popular for enquiry levels, small businesses appear to be grasping opportunities and using the decline to their advantage.
A recent survey by Business Link in London suggests that London’s small businesses are bearing the brunt of the recession – but many are looking to grow, with a massive 84% planning to expand and achieve growth over the coming year. However, setting up in London doesn’t necessarily guarantee success, as the report highlights:
“Nearly two thirds of entrepreneurs surveyed said that the recession is still affecting their business, with 39% saying the recession has significantly impacted overall budgets and expenditure.”
The global economic crisis has taken effect on many business sectors, but encouragingly there are many reports that suggest the bottom of the cycle is within reach.
“These results are an encouraging sign in these turbulent times,” says Patrick Elliott, chief executive of Business Link in London. “We’re seeing a clear trend emerge of a sector that is refusing to get bogged down in the doom and gloom.”
Elliott also adds: “But what’s telling from this index is that this confidence is across the board – many entrepreneurs across regional, industry, and demographic groups are responding to the recession by aggressively seeking out new market opportunities.”
And with the potential to secure a cheaper-than-average desk in Central London, small businesses who take these opportunities are establishing an even stronger foundation come the end of the decline.
To find out more about how office space can benefit businesses in a recession, take a look at our related articles:
- officebroker.com’s guide to surviving a recession
- officebroker.com presents: Top 5 Tips to Keep Your Small Business Booming
- Most popular office space locations for small businesses
For more details on office space in London or other areas within the UK and internationally, you can start searching on our website at www.officebroker.com, or get in touch with one of our expert consultants for free, helpful advice.