Leveraging Resources Creatively
Improving your cash flow in a tight economy
Chia-Li Chien | Aug 16, 2010
Many of my fellow business owner colleagues faced the challenges of the post-financial crisis in the fall of 2008. For some industries, it meant an immediate sharp drop in revenue. For others, it was delayed a bit. Nevertheless, many businesses are still facing tight cash flows or the shock of the downturn, and continue to monitor their cash flow closely.
Truthfully, many businesses have actually benefited from this newfound vigilance, and through it, have found ways to boost their bottom line, especially by cutting out areas of waste.
My business is one of those that did not experience an impact from the economic downturn until mid-2009. One thing I did during that time was to give up my office lease in a prime, high-rent location. When I thought about it, I could no longer justify having physical space for a virtual team. It sounded a lot like waste to me. And with that realization, I decided to spend some time looking for ways to be “creative” with my business space resources.
In August 2009, the Charlotte area office vacancy rate was 18.4%. Today, August 2010, the office vacancy rate is 18.8%.
(Data is according to the FEDERAL RESERVE BANK OF RICHMOND, A MONTHLY UPDATE OF THE FIFTH DISTRICT ECONOMY SNAPSHOT; Aug. 2010 of North Carolina.)
With that knowledge in hand, I spent many months researching and seeking how to best leverage my office space resources. The first thing I did was to ask myself, “What do I need the office space for?” This might be an easy question for many business owners, but it is not for me. I had to consider every activity that actually took place in the office. It turned out the only real need I had was for a conference room to meet with clients or prospects. As a result, I shifted my focus to space that met that criteria.
With all the vacant office space available, I found myself with many options:
1. A one-year or multi-year lease of a dedicated office space/suite. Some of the buildings had a common conference room but in general, occupants were limited to four to eight hours per month usage of the shared space.
2. A month-to-month lease of a dedicated office space/suite, typically much more expensive than a one-year lease term. There was a shared conference room, but usage was still limited to a certain number of hours per month.
3. A one-year or multi-year lease of a virtual office space/suite in which you paid for fourteen to twenty-four hours a week or month for use of the office space. There was no dedicated office suite especially for you, and was subject to availability.
All of the above were nice, but each came with amenities I didn’t need or want, such as a receptionist for answering calls, free coffee, mail pickup service, fitness center in the building, etc. Once again, if I just looked at my “need,” it was still simply sharing a conference room. And after looking at some two dozen buildings, I still had not seen exactly what I was looking for.
One day, I went to see a prospect (who later became my client), named Cathy. Cathy shared with me that she had a co-habitat office space agreement with her landlord. She is there fifty percent of the time, and her landlord (Louis) occupies the same office fifty percent of the time. They share desks, living room, kitchen and conference room.
After touring the space many times, I went to her landlord and inquired for myself about the space. Today, I am the third co-habitat tenant in the same space with Louis and Cathy. I am hardly ever in the office, because I just need the space for meetings. We signed a one-year lease (with the first month free) in early August 2010.
The co-habitat concept has been around for a while in many entrepreneur-friendly cities and was designed with start-ups in mind. Many incubator programs use the same concept. But for Cathy, Louis and me, with well-established businesses in operation for many years, our needs were different than most new businesses.
Ultimately, each of us saved our resources by sharing office space and by getting creative in how we put the space and our rent resources to use. You can do that as well. Think about what you need, take your time, and get creative. Don’t settle for what you don’t need or spend money on what you don’t want.
And many thanks to Cathy, who laid the groundwork for this idea, proving once again, you don’t get anything if you don’t ask.
Chia-Li Chien, CFP®, CRPC, PMP; helps women entrepreneurs to convert their business into meaningful personal wealth. She is the author of Show Me The Money and columnist for WomenEntrepreneur.com & Fox Business online. She is available for consulting, speaking engagements and workshops. She can be reached at www.chialichien.com or email@example.com.
This article is published at: The Business Woman – Official Blog (UK)