December 2013 | Servcorp - Published in SME Advisor Magazine

Some of the key elements in an SME's expansion plans will involve opening new branch offices, accessing different markets and facilitating access to fresh commercial hubs. One of the key challenges, though, is that this expansion will so often necessitate taking on board an expensive raft of fixed costs – not to mention facing a daily round of infrastructure and set-up challenges. SME Advisor spoke to Servcorp, the world leader in serviced office provision, about expansion strategies that can supercharge business growth and provide a crystal clear template for forward planning and cost control…

One look at the current Dubai SME 100 reveals an interesting characteristic about the region's top-performing small and medium businesses. It's this: about 55 per cent of them have growth and expansion plans which will necessitate finding fresh office accommodation, and indeed, will require a clear strategy for acquiring more than one premises in the foreseeable future. What's more, in about 20 per cent of cases these new premises will be in a foreign country.

It has to be said, though, that taking on these new commitments isn't always an easy task. For example, an up-and-coming business will often require an equally up-and-coming address, and for a prestige office in a city-centre location, the minimum leasing term may well be five years – it certainly won't be less than three. Then, there are the set-up and support costs, and in the case of overseas expansion, factors such as recruiting support staff with fluency in the right local languages. All of which means that the ‘first step' towards expansion can be a costly and risky business, especially given the fact that the new markets can be far from proven in the early stages.

Test the Waters

One solution is to leverage the company's expansion via a serviced office – or serviced office network. In the case of Servcorp, for example, there is a specialised package designed to facilitate entry into new markets without automatically invoking the full range of costs. This is the ‘Test the Waters' package – and it means that if you are an existing Servcorp customer, you can have a free business package for two months, providing an ideal base for your team to explore the new market and find the first raft of potential customers. (Note that in the UAE, this style of working arrangement is called a ‘Business Package').

With the Test the Waters package, you can call the office through the Servcorp network, and can even start with more than one office – in fact, setting up as many as you feel your expansion plans will merit. (Although a smaller style of company probably won't have the staff resources on hand to look at more than one option).

As a solution, this has the advantage of not only being extremely simple, but also tremendously well-suited to providing the full range of professional services you may need – in fact, Servcorp describe the Business Package as giving you ‘everything but the office'! You have a dedicated telephone number, fax number and a dedicated receptionist who can transfer calls to wherever you are. With all the advantages that come from dealing with a real person, not a call centre! So you can easily and quickly give instructions on how you want your calls answered, and update these instructions in less than a minute by accessing the Servcorp app.

SMEs also have an address to receive mail – and you can even put this address on your business cards (although there is of course the caveat that in the countries of the Middle East and GCC, you can't actually register your business via a virtual address). Then, when your mail is received, it's sorted and delivered directly to you.

It's also worth bearing in mind that every location has a multilingual support team, giving your business perfect credibility in its new market. For example, the support teams in Lebanon are all fluent in Arabic, English and French, and you can designate exactly which language you want the ‘lingua franca' of your day-to-day business support to be.

Interacting with your clients

Many of the markets in the GCC place a high premium on personal contact as a way if building the ongoing, warm dialogue which is a necessary precursor to a commercial relationship. Here again, the Test the Waters package is ideal, because you will have the availability of fully-equipped meeting rooms, as well as access to an office for three days per month in any country that's not your home base.

If your ‘testing the waters' idea works well, you can then upgrade to a real office at only 24 hours' notice. This new office will then come with all the usual benefits, and you'll have expert IT solutions, highly skilled support staff and the most professional office environment from Day One of your presence in the new market. You may decide, for example, to make the Test the Waters package a core element of your expansion strategy: so you could set a target of market penetration within three months of arrival (using the Business Package during that time) and use this as the water-shed period by which you either commit to the new market – and then upgrade to a full office solution – or scale back to the existing premises. You can follow this principle either in the home market, or overseas, wherever Servcorp have a presence.

It's a question of timing

Remember that the fixed office solution gives you a single monthly bill, so in terms of your office arrangements you know exactly where you stand financially and can maximize cash flow and budget planning. This is especially helpful if you are in sectors with an extended working capital cycle, or your receivables are typically locked into a 90-day payment term.

You also have the benefit of not needing to tie up valuable staff time in leasing negotiations and IT set-up, which can potentially equate to several weeks of lost prospecting time. This means that you can time market entry more precisely, or align your move clearly with a new product launch or a new piece of market legislation. For an SME, timing and opportunity is everything, and the service office solution provides the means to play to your strengths, rather than join a game that risks becoming a costly and time-consuming ‘red flag'.