Operating small and medium enterprises can run up large overhead costs — but a growing industry is now providing options that could help SMEs could cut down on expenses.

”Serviced office solutions” refers to the rental of fully furnished offices in central business districts – a relatively cheaper venture for budding SMEs, said Victor Asuncion, executive director of CB Richard Ellis (CBRE) Philippines.

“‘Swing offices’ are an interim accommodation [for SMEs] until they can afford to get their own permanent office,” Asuncion told GMA News Online in a phone interview.

He added that contractual companies – those that operate in the country for a certain period of time – need not have a permanent office so they resort to “interim spaces,” Asuncion added.

Companies providing serviced office solutions are usually located in central business districts such as  in Makati, Alabang, Ortigas, and Fort Bonifacio, said Asuncion.

Location advantage at lower cost

One reason SMEs rent offices is for the advantages of being in prime locations.

“The prime locations are where people conduct business. [By renting offices in these areas,] it gives them a reputation in their business. It adds market confidence,” said Asuncion.

He cited companies providing  office solutions: CEO Suites and Servcorp Philippines in the Makati Business District; Regus Business Center in Makati, Ortigas and Fort Bonifacio; and Nomad Offices in Makati.

The CBRE director added that since offices in prime locations are paid “on a seat to seat basis,” these are a more expensive venture for SMEs.

Thus, serviced offices may be a practical alternative for these businesses.

“To a certain extent, mahal ang offices [in central business districts]," said Asuncion. But innovative office solutions, he said, could bring users the benefits of being located in CBDs at a lower cost.

According to Servcorp Philippines – with offices in Ayala Tower One, the same building as the Philippine Stock Exchange’s trading floor – renting office space is cheaper than investing in an actual office.

“[W]e actually ask people when they come and see me: ‘In your ideal world, what would your office be like?’ And we build their business up to be as close to the ideal as possible,” said Philippine manager Jennifer Simons-Castillo.

Servcorp currently serves around 200 clients, 95 percent of which are engaged in business-to-business transactions such as financial and IT consultancies, Castillo said.

Servecorp's virtual office

Having a virtual office is another option for SMEs that need to reach out to clients at different time zones, said Simons-Castillo.

She describes a virtual office as “an online dashboard... And through this [our clients can] manage everything. It’s an automated management system.”

SMEs that use virtual offices are attended by Servcorp’s receptionists who facilitate meetings or teleconferences, Simons-Castillo said.

However, this new technology may only be limited for SMEs that conduct business-to-business transactions, said CBRE’s Asuncion.

“It’s a form of cost-saving, but I don’t see that as a replacement for person-to-person transaction,” he said, citing businesses that require sit-down discussions with clients.

In the end, serviced offices may serve as an entry point for many SMEs which want to go big in the industry.

"[These companies] facilitate the entry of new SMEs in the Philippines,” Asuncion said.

Servcorp’s Simons-Castillo noted their services give SMEs a “transitional phase to an actual office.” — BM/VS, GMA News