Serviced Offices vs Traditional Office Space

Are you a business owner looking for your perfect office space? Perhaps you want to stick to tradition and lease a conventional office space, or try something a bit more modern by opting for a serviced office?

Not sure which one would be best for you? We have the answers you need!

In this article we're going to be explaining what serviced office facilities and traditional offices are. By the end of this article you should be able to decide what you need: a serviced office vs traditional office space. 

Note: if you’re particularly interested in the financial side of the serviced vs traditional office debate, check out our explainer about how serviced offices can save you money. 

What is a Serviced Office?

With a serviced office you get an all-in-one, ready-to-go office solution. A fixed monthly fee for the duration of your lease provides you with a full office area located in the location of your choice – usually alongside other serviced offices in a business centre or coworking building. All you need to bring are your staff and your computers – everything else is provided. Office furniture, printers and copiers, and a receptionist's entrance area are all included. Your monthly fee also includes high-speed Wi-Fi, toilet facilities, and even your kitchen's cups and kettle.

The company providing your serviced office manages everything for you, the tenant. This includes your utility bills, insurance, business rates, cleaning and a security service. Even a front-of-house team is built into the monthly fee. All you have to do is make a single payment each month and it’s all yours!

The contract you'll sign is negotiable, depending on the services. You'll likely have options to remove or add extras, like the use of extra meeting rooms or mail and call handling. Contract terms are also variable, so you'll be able to enter into a shorter contract term if that's what suits you. This is ideal for hybrid-working businesses or rapidly growing companies where it’s hard to predict how many desks you’ll need in six months or a year’s time. 

What is a Traditional Office?

Now we’ve looked at the amazing benefits of a serviced office, let’s go back to basics: traditional offices. You'll enter a traditional office lease directly with a landlord, and you'll likely be charged on an annual per-square-foot basis. Traditional office spaces are ideal for long-term leases and established businesses. If you're looking for a settled space for your employees and accommodating a larger number of visitors, this is the way to go.

Although renting traditional offices enables you to design, decorate, occupy and manage your offices as you choose, tenants are liable for capital expenditure expenses. These can amount to charges depending on the work you'll do to bring your workplace to an operational and functional standard. The size of your offices also contributes to CAPEX costs.

Now that we’ve explained the basics of serviced and traditional offices, let’s compare the two to help you figure out what’s best for your business. 

The Lease

A traditional office lease is typically long-term, potentially stretching over several years. A serviced office lease could only amount to a few months.

Companies with existing long-term investments and more established and predictable growth won't need serviced offices. A settled and experienced business will be more suited to a stable and long-standing base of operations. With all its own furniture and equipment, a traditional office with a longer lease will suit it.

Due to the structure of monthly fees including all expenses, a serviced office is often a wiser workplace option for smaller or fledgling businesses. It's a great option if you're unsure of your returns on investment and current growth rates. It may be a more affordable short-term solution due to the consolidated form of monthly expenses.

For example, a new business may look to grow and turn more profit before spending money on items like office furniture and equipment, meaning that serviced offices are the cheaper option at the beginning. Even easier access to areas like conference rooms can remove headaches for smaller or newer companies, allowing you to focus on building up your business.

Maintenance

Maintenance is easier to manage in a serviced office environment. The tenant doesn't have to worry about cleaning the premises or maintaining the property. Even fixing an errant Wi-Fi or a broken light fitting is done for you.

With 24-hour security, seven days a week, the tenant's concerns would be minimal. Management will deal with everything as part of the monthly rate and agreement.

In a traditional office scenario, a renting business will source its own cleaners, maintenance staff and security personnel. It could always outsource too. But a member of the business would need to organise these office solutions and make payments to each individual contractor.

While this process does give the traditional office tenant greater control over maintenance and the workplace's upkeep, the trade-off is the time and resources it requires.

Scalability

In a traditional office, scalability can be limited because of the fixed nature of the lease that a tenant is tied to. If there's a need for expansion of the business, it would mean breaking the lease. Then you could move premises to a larger office space, which in itself can be time-consuming, disruptive and costly.

Downsizing the business would bring similar challenges. The business would need to undergo a costly breaking of a long-term lease or wait out the lease duration in an office it doesn't require. This would mean paying a rental it may not be in a position to afford.

A serviced office environment offers an easier scalability option. The period of the agreement is likely much shorter and more flexible, so it’s easier for a business to leave an office that no longer suits its needs. In fact, many serviced office providers have a range of different sized spaces, so it may be easy to move to a different available office in the same building – no need to hire those removal trucks this time! 

Location

Serviced offices are not in short supply in the UK. Available throughout the country, serviced offices are a cost-effective way to locate your business in otherwise expensive hubs such as central London and Edinburgh, where the cost of a traditional office lease is high. 

Because of this, serviced offices are also ideal for businesses expanding into new areas. This way, if it doesn’t work out, you don’t need to be saddled with a long-term traditional office lease. 

Facilities

Having a serviced office with top-class facilities is good for impressing potential clients. Facilities like swanky front-of-house services, private offices, and excellent meeting rooms can truly add the finishing touches to a new business.

Of course, a traditional office can also have all the facilities you require to make a success of your company. Still, you will be responsible for sourcing and installing any facilities you need. With a traditional office, it’s up to you to find the cash upfront to turn your dream office into a reality, whereas in a serviced office the cost of the decor and facilities is spread across your tenancy. 

Which Office Space is Right for Me?

In the past, traditional office spaces were the norm for many businesses, but everything has changed since the Covid-19 pandemic. While serviced offices used to be the domain of only startups and SMEs, today they’re also increasingly popular among bigger businesses. The rise of hybrid working and current economic difficulties make serviced offices a more flexible and adaptable option for all types of organisations. While there are still obvious benefits to traditional office spaces, it’s no surprise that many business owners are opting for more flexible serviced offices instead.

Conclusion

Our team of experts at Future Squared understands that it's not always easy to find the right workspace. We'll work closely with you to understand your requirements and help to identify which office space solution suits you best. We'll guide you through the process, from discussing your needs to viewing offices and negotiating your lease to ensure you get the best deal.

We aim to make your office search as convenient and flexible as possible. Future Squared is dedicated to finding you the perfect workplace solution. For more information on how we can help your business to locate the perfect office, contact us, and we'll get right back to you. Or, head to our office search page to start looking for your perfect new place.