How flexible workspaces can help drive your global expansion - IWG
Article by IWG New Zealand country manager Pierre Ferrandon
Love them or hate them, companies like Allbirds, Icebreaker and Timely are prime examples of Kiwi businesses growing rapidly and taking the global market by storm.
Yet, while expanding internationally is an important growth and additional revenue stream for many, it can be a very costly exercise.
So how can promising business ventures without the financial backing of high-profile investors make their global debut?
Flexible workspaces Regus and Spaces could just be a risk-free and low-cost route into new markets.
At the smallest end of the business market, we see online sellers, such as those operating on eBay and Etsy, use these virtual platforms to grow their global customer base.
However, with the trend towards people wanting to buy local, sometimes a local address can be a critical component of that growth journey.
Virtual offices can allow businesses to build or maintain a ‘local’ presence with an office address and telephone answering service in their chosen foreign market to help ease logistics with local clients.
This is a great benefit for those looking to test the waters ahead of making a physical move abroad.
Often a virtual office just isn’t enough though.
Many organisations need to employ teams in different countries whether that is to be close to customers, suppliers or partners.
This, of course, can bring its own challenges as businesses unfamiliar with that country may not be aware of local cultures, ways of working, or even where best to locate their new overseas office.
What’s more, international business expansion doesn’t come cheap.
It costs an average of $10k for a single desk in a corporate office.
If we just look at the cost of setting up an office, there’s construction, design, fit-out, equipment, facilities management, IT and amenities.
The list goes on, and that’s before you even start the local recruitment drive.
Companies don’t need the headache of thinking about the right size of the building, the length of contract and the location of offices in a country they are unfamiliar with.
Nor do they need to make such an expensive, and often a long-term commitment to multi-year leases and contracts.
Flexible workspace solutions allow businesses to scale up and down in terms of size, offers a choice of location and different contract lengths that adapt as the business’ needs change.
When a company moves into a new country, it will inevitably make some mistakes, so setting up in a flexible workspace allows for trial and error at a minimal cost and lower risk.
SMEs face the biggest risks and potential costs
While they realise it’s an important step in their growth, startups and SMEs can have the greatest fear about expanding internationally.
After all, only about half of small businesses will pass the five-year mark, with over a quarter struggling to fund the capital needed to operate, let alone expand overseas.
Flexible workspaces provide faster, lower risk options for SMEs looking to go global by reducing associated real estate costs, whilst also providing agile and adaptable ways of working, helping to manage uncertainty.
IWG’s Global Workspace Survey (2019) revealed that 64% of respondents had chosen to adopt flexible working practices to increase the speed of set up in new countries.
Flexible workspace solutions offer multinational companies a hassle-free international expansion option
While the risk for a multinational expanding overseas has potentially less damaging consequences when they don’t work out – a decision for an SME to expand into the wrong market could kill their business, whereas it may just be costly for a multinational – it is still an expensive decision that requires serious consideration.
Increasingly, multinationals are recognising the benefits that flexible workspace arrangements and a more versatile workforce can bring when operating internationally, such as providing the perfect solution for long-or short-term projects by allowing firms to scale up and down as necessary.
By the end of 2019, 40% of global demand for flexible workspace is expected to come from large and corporate companies, with the average tenant taking seven or more desks in flexible space.
Additionally, these businesses are realising the need to attract the best international talent and one key way of doing this is by offering the option to work flexibly closer to home.
As flexibility quickly becomes a requirement rather than a nice-to-have for employees, IWG’s Global Workspace Survey showed that a rising number of firms are responding by offering flexibility as part of the benefits package to attract the right talent.
With 75% of FTSE 100 companies incorporating some element of flexible workspace into their property portfolio and 4 in 5 people saying they would turn down a job offer that didn’t include flexible working, flexible workspace solutions could be a key weapon in a business’ armoury when expansion plans are on the cards.
Whether you’re already embracing the future of work or are just starting to look at the different options to make your business space more agile, flexible workspaces can support businesses of all sizes in their growth strategies.
IWG believes that business success is underpinned by the effectiveness and happiness of its people. So, they made it their mission to help millions of people have a great day at work – every day.
IWG has drawn upon its 30-year heritage in flexible workspaces to create a world leading commercial real estate platform.
Its portfolio of operating brands, including Regus, BizDojo, Spaces, Signature by Regus, HQ and No18, offers an unrivalled level of choice for businesses of all sizes and budgets.
With over one million workspaces and a presence in hundreds of countries, cities, towns, and transport hubs worldwide, IWG has the world’s largest network of flexible workspaces and a full suite of business support services to enable people to focus on their core business and enjoy a great day at work.