How small businesses can build financial resilience with a new flexible commercial space model.
The end of COVID stimulus and rent relief, which have supported many small businesses throughout the pandemic, have put Australian small businesses under increased financial pressure.
The end of the financial year is a good time to sit down and look at different ways financial resilience can be achieved for the year ahead, and how businesses can also operate in a more flexible and agile manner.
We’ve seen many business and political leaders make bold statements about building resilience and embracing flexibility in uncertain times. But what are immediate solutions small businesses can actually put in place to save money, adapt to a much more flexible and agile business model and workforce, and even create new revenue avenues?
A new flexible workspace and commercial space model
Rethinking the way we use commercial space – including workspaces – can help small businesses survive in today’s unpredictable, fast-moving environment while at the same time adapt to workers’ new expectations and needs.
For most small businesses, expensive long-term commercial space leases don’t make sense any more.
No business today wants – or can afford – to be locked in with commercial space that is underutilised. In addition, why pay for a fixed space footprint when in our current highly unpredictable economy there’s a risk that activity levels suddenly drop or increase.
Why rent a suite of desks and a meeting room in an office building if most of your employees now show up to the office only once or twice a week, where most client meetings happen on Zoom and when that meeting room is only used once a month for brainstorms?
“Rethinking the way we use commercial space can help small businesses survive in today’s unpredictable, fast-moving environment.”
On the other hand, a workforce in a fully home-office set-up isn’t sustainable. Workers want to get out of the house, and while they might not want to go all the way to a CBD office every day, they would still like to have the option to work from proper offices and connect with people.
Industries with strong physical footprints
As an example, we are seeing more and more retailers question the viability of having only one physical store location, locked in because of their lease, when they could regularly trial new locations and reach new audiences.
The same is true in hospitality, travel, and even creative industries where business owners have to pay rent for spaces they only use during certain hours or on certain days of the week.
This is no surprise that we are seeing pop-ups, ghost kitchens and on-demand creative spaces gain popularity.
Businesses today, no matter their industry, simply need a new way to use commercial and office space with less commitment, more convenience and with a pay-as-you-go model.
Small businesses can decide to go fully flexible with no locked-in leases, or opt for a hybrid model mixing permanent physical locations, remote operations and flexible space options.
Savings, de-risking business operations and fostering new ideas
For Elizabeth Walker, founder of Doyen PR, adopting a flexible workspace model space is a great way to reduce unnecessary costs and better serve clients.
“At Doyen we have a hybrid approach where we need to have a physical office in the CBD, but we still mostly work remotely,” Elizabeth says. “We’ve been able to set up a new framework where our physical footprint is minimal, and we use flexible, pay-as-you-go options for all our other space needs – whether one of our staff wants to work from a cool location one day, or we need meeting rooms or creative spaces for our clients’ events and creative needs.
“This has helped us save a lot of money, and build a highly adaptable business based on our employees’ new needs and our business activity levels. This new flexible model has also helped us think differently about ways to work with our clients, and find new opportunities for them, too.”
Workspaces: supporting and empowering employees, fostering creativity
The adoption of business strategies that work to protect and foster employees’ wellbeing is what will shape and sustain a greater work culture, and ultimately productivity. This can be achieved through a decentralised workspace by utilising flexible spaces and by offering people a choice in how and where they want to work.
Work isn’t a place we go to any more, it’s something we do and in the future we are evolving toward a physical office space that is purpose-driven. We go to a place of work to meet with colleagues, share ideas, brainstorm, build a sense of community and overall support each other.
Fiona MacDonald is the CEO of online publication ScienceAlert, which has been operating in a fully remote capacity for over 10 years. Her small team is spread out across Australia, the US and the UK, and they use a wide range of physical space options as a way to connect, provide mentoring and foster culture.
“While we all work remotely, it’s important that our team doesn’t feel stuck isolated at home and can get out to a nearby co-working space and network with other professionals,” Fiona explains. “We have set up a system where employees are able to use company funds to book different workspaces. We also meet up in small, local co-working spaces to have brainstorming sessions and bonding days.
“The flexibility lets us stay agile as a small business, while maintaining employee satisfaction, engagement and motivation. It means we’re not locked into lease costs, so when business is going well we can pass it straight onto our team.”
Creating new revenue avenues and testing new ideas
The move to a more agile, flexible commercial space model makes it easier for entrepreneurs to start a business and give new ideas a try while limiting risks and spend. At the same time, it supports struggling industries with lots of unused spaces – for example in travel, hospitality, retail – to get those spaces used and gain revenue from it while helping out other fellow businesses.
Sam Restifo is a senior executive in the technology sector who has a catering business on the side, The Hungry Mind.
“I’ve used the pandemic as an opportunity to transition to a more flexible business model, using third-party kitchens to reduce costs and risks associated with a lease and a fixed physical space,” Sam says. “The concept of ghost kitchens means I am now using kitchens from hotels, for example, that aren’t used to their full capacity right now because of the drop in tourism, to trial new things and also expand.”
There are many examples of existing business owners or new entrepreneurs using this new flexible, pay-as-you-go commercial space model to just trial out new things, new business ideas, and innovate while reducing risks and costs.
Building financial resilience and empowering businesses to thrive in tomorrow’s flexible and unpredictable world will require a complete shift of our mindsets: what is work? What’s the new normal for agile business operations? How can we better allocate resources to what really matters to the business?
Ultimately, we have the opportunity to build a win–win model where people who have unused or underutilised space – whether that be an office space, a meeting room, a retail store, a cafe or a commercial kitchen – can simply rent it to people who need it, when they need it. People who need space can pay for just what they need, not more.
This article first appeared in issue 33 of the Inside Small Business quarterly magazine