Cost-cutting Small Firms Head Home
An estimated 400,000 small businesses have quit their offices to set up at home since the onset of the credit crunch last November, according to research by telecoms firm O2.
The O2 survey of 500 small firms revealed that 13% have not renewed their office lease over the last eight months (equating to 50,000 UK small businesses per month), instead choosing to move their business back home. Of these, 62% cited the need to reduce their costs as their main reason for moving.
According to O2 head of SME marketing Simon Devonshire, credit crunch fears and the threat of possible recession were also among the factors that stopped businesses committing to new rental contracts.
“Getting rid of the office relieves many small businesses of a major overhead very quickly and shows a rapid response to current economic pressures,” said Devonshire. “Developments in technology and mobile communications are also enabling businesses to be flexible and respond very quickly to changes in the market place.”
Ben Reid, a partner in creative design agency Cascade, said his firm’s move from their London office to partners’ respective homes saved them £2,000 a month in overheads.
“To our clients, nothing changed â?? we still had the same email addresses and our landline phone number remained the same,” said Reid. “But by giving up the office, we were able to cut our overheads by more than £2,000 a month, which enabled us to get some money in the bank and carry on trading – it’s definitely what kept us afloat.”
According to Work Wise UK chairman David Lennan, the shift to flexible working practices has developed over a longer period, but the credit crunch is driving more small businesses to consider alternative ways of working.
“The development of video conferencing, mobile telephony and other terrific new technologies has resulted in a shift in the way that businesses operate and adapt to smarter working, which includes remote working,” said Lennan. “The credit crunch is not the only reason for this shift, but it has driven people to look at how they can cut their costs and how it will affect their clients if they use these technologies.”
For information on working from home, visit the Enterprise Nation website