Expanding internationally is an important growth and additional revenue stream for businesses of all sizes, but it can be very costly.
However, flexible workspaces can allow businesses 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 on 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 firms looking to test the waters ahead of making a physical move abroad.
But, often a virtual office just isn’t enough. Many organisations need to employ teams in different countries whether that is to be close to customers, suppliers or partners. This can be fraught with 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. 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 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 long-term commitment to multi-year leases and contracts. Flexible workspace solutionss 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, start-ups and SMEs can have the greatest fear about expanding internationally. After all, only about half of small businesses will pass the 5-year mark, with over a quarter struggling to fund the capital needed to operate , let alone expand overseas. However, 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 (38% of US businesses reason that they adopt flexible workspace models to allow them to be more agile as they seek to grow ).
Flexible workspace solutions offers 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 a 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.
IWG’s Global Workspace Survey showed that a rising number of firms are 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 solutionss could be a key weapon in a business’ armoury when expansion plans are on the cards.
Interested in learning more about how the use of flexible workspaces can help with a global expansion?
We can help.