Office Business Centers (OBCs) are rapidly adapting to new realities in our working environment, but their image is rooted in the industry’s inception several decades ago. In order to help executives properly evaluate the OBC option, we have compiled a list of 10 commonly held myths about the industry.
1. OBCs Offer an Alternative to Renting Commercial Space
This fallacy represents one of the key misconceptions our industry struggles against every single day. Today’s OBC provides administrative services, electronic infrastructure and a working environment ready to go from day one. In doing so, it frees clients from the time and responsibilities required to install telecommunications systems and copiers, select and train administrative staff, and monitor maintenance items such as cleaning and painting.
2. Office Location is Unimportant in Today’s Global Marketplace
As industries become more competitive, differentiation among rival organizations often hinges on intangibles. An office in an impressive building with beautiful grounds, in a prestigious location, speaks volumes about a company’s success and ability to satisfy its clients. Prospects can be overwhelmed by plush interiors, an accommodating staff and a professional atmosphere. Proximity to other successful organizations affects the impression of your own.
3. OBCs are Too Expensive
Some executives are impressed by the services offered by OBCs and think it would be cheaper to start from scratch with empty commercial space. This viewpoint ignores the economies-of-scale employed by OBCs to provide services infeasible for singular use such as videoconferencing. OBCs also offer meeting spaces for large gatherings, avoiding the need to find and rent space for a yearly event. Considering all the costs necessary to transform traditional commercial space from an “empty box” into a working office environment, the OBC option can actually be less expensive.
4. OBCs are Primarily for Start-Up Companies
This myth views OBCs as a stepping stone to a commercial office. While some companies using OBCs benefit from administrative services, especially if they do not have enough work to hire a full-time employee, OBCs serve small, medium and large-sized firms in a wide variety of fields including law, finance and business-to-business. Larger, well established companies open satellite offices in new locations and utilize OBCs as their regional headquarters. Some clients are so happy in their OBCs, they stay in them for decades.
5. Office Business Centers are Only Staffed from 9 AM to 5 PM
In today’s 24/7 world, this limitation would sound a death knell to our industry. OBCs offer customized solutions for their clients including flexible hours for staff, telecommunications and other specialized needs. In fact, when a traditional employee in a commercial office is unavailable, OBCs offer full staff and administrative support to help a company meet deadlines in any time zone.
6. The Luxury and Amenities in High-End OBCs are an Anachronism Today
Clients, prospects and employees today, especially Gen X’ers, expect certain perks. Sometimes winning that big account may be achieved through a workout in an on-site weight room, or a basketball game in the company gym, instead of a PowerPoint presentation. People do business with their friends, and winning a person over involves becoming one. A walk outside on well-kept grounds with fountains and gardens in the background can be very persuasive.
7. All OBCs are Alike
Like every industry, there are high-end and low-end OBCs. Some were founded over 20 years ago and deliver a level of expertise suitable for high-paying clients. These OBCs generally stay on top of the latest technological innovations, with fiber-optic networks and electronic packages for their clients including website administration. Other OBCs focus on volume and deliver a less personalized approach.
8. The OBC Industry is Well Known in the United States
OBCs were considered a vital option for businesses in Europe well before the start of the OBC industry in the United States, where they are still relatively unknown. Terminology creates a fundamental misunderstanding of our industry. In Britain, we are recognized as a service industry, and instead of executive suites, our colleagues use the term “serviced office.” Instead of referring to “leases” and “tenants,” they talk about “clients” and “contracts.”
9. OBCs Provide More than My Company Needs
Yes, OBCs provide packages to save companies money including an electronic package, virtual office services, worldwide business access, concierge services, etc. But some OBCs also offer an “a la carte” menu with basic items such as word processing, document creation, graphics and more. OBCs provide customized, flexible service solutions for clients to fit their needs.
10. OBCs are Insulated from the Negative Effects of Economic Downturns
While many OBCs benefit from increased occupancy rates during economic downturns, their clients may be overly cost-conscious about services designed in the long run to save them time and allow them to focus on their core competencies. As a result, the revenue per office declines. However, on the upside, companies may use OBCs more when they renovate their own location instead of moving to a new commercial space. OBCs specializing in renovation interim-workspace service benefit from this additional source of revenue.
Executives must be aware of all these myths when considering the OBC option. They should talk to colleagues in their industry and analyze the costs and benefits of all alternatives. However, they should be aware of the many intangibles in the OBC industry and evaluate each OBC company based on both its history of service and current capabilities.