Prestigious Small Office Spaces
Confidently, John Lee, 23, made arrangements to have the interview at his new Kuala Lumpur office along Jalan Ampang.
Which suite? “Just come up to 36th floor. “For a few seconds, it was difficult to fathom that a guy not yet out of varsity was occupying the entire floor just providing translation services. It turned out he had moved into his new office on the day of the interview itself at a cost of about RM600 a month. The first month, he had a 50% discount. Lee used that venue from June to September last year.
But why did the founder of Epsilon Translation services splurge on such a high-end address, considering he was just starting out?
“I wanted the image, the address, the location, the strategy, in that order,” he says.
His address is one that businessman and entrepreneurs would die for. And the folks who set up these serviced offices know that.
There are about 10 business centers in the Klang Valley today, excluding the smaller ones. The small players resemble the 1970s business centers which offer a desk and chair, and basic telephone services. The biggies offer a proliferation of services, from arranging tea pastries to shopping trips, visa extension to executive search and maid recruitment.
Says Mee Kim, the founder and president of CEO SUITE: “Anybody can open up a business centre. I am selling a service. It’ll be boring to just lease out office space, which is why I throw the usual annual parties. It is good for the spirit, good for networking and it makes my clients happy.”
Half of her clients have been with her since day one when she set up her first business centre in Jakarta about eight years ago.
Today, she has six offices in the region in Singapore, Jakarta, Kuala Lumpur and Shanghai. She is currently working on her Beijing office and expects to open another in South Korea. Funded by venture capitalists, each business centre involves an initial investment of between US$1.5 mil to US$2 mil.
“The margin is low, but I try to achieve volume. I hope to break-even by this year or next,” she says.
“I don’t need to open offices in China. But my staff was keen to go there. Our competitors were already there way ahead of us. In terms of cost, it is more viable to have another branch in Kuala Lumpur but since everybody was so keen to go to China, I decided to make it a win-win situation.”
She set up her Shanghai office, where rental is exorbitant, in December 2003. Four months later, she was 100% full. Two of her competitors who have been there 5 to 10 years before her are yet to be fully occupied.
Most business centers cater to expatriates who are posted in the region to set up or run representative offices, small and medium sized entrepreneurs, some of them expatriates. The multinational companies generally rent suites while the locals opt for virtual offices.
For most of these business centers, the owners realize that without IT, they would not be able to move as fast. It remains obvious that their clients would want time saved when opting for serviced offices. Naturally, they would want to concentrate on what they do best, and not carry along extra baggage to fill up EA forms and/or manage staff.
When Australian Embassy in Jakarta was bombed in September 9 last year, nearby office blocks, were rendered unusable.
Within hours, the executives from an oil and gas company were calling Mee Kim. Rooms were prepared, lines put in. “The next day, they moved in,” says Mee Kim.
And for many entrepreneurs, this concept is very well-received because the return on investment is much faster. One fact is for certain, they don’t have to spend thousands in renovations!