Start-ups Need To Weigh Office Options
05 Apr 2017
More and more young Thai entrepreneurs prefer to start-up new businesses as opposed to working from home. Young Thai entrepreneurs are especially influenced by the success stories of global companies such as Microsoft, Google, Amazon, and Apple, all of which had humble beginnings and started in garages. As Thai houses generally don’t have enclosed garages, this option does not provide a viable solution for Thailand’s budding entrepreneurs.
In a new report, CBRE explores options on feasible locations where Thai start-ups can set up their business.
At the moment, options for start-ups include working from home, renting serviced offices, renting traditional offices, or the latest trend, working at co-working space.
Working from home can be rather lonely and impractical if you need to hire staff. Moreover, some condominiums do not allow commercial activity to take place and may not allow companies to be registered in the building.
Some may opt to rent a shophouse. Some shophouse landlords agree to short-term leases of one year and the rent per square metre is generally lower than that of an office building.
Another option is serviced offices such as those operated by Regus and Servcorp which also provide flexibility with no capital costs and commitments of as short as one month, however, landlords require a deposit which sometimes higher than the monthly rent itself if tenant opts for a short term contract.
Some start-up entrepreneurs have the confidence to rent traditional office space which is a significant commitment. The usual length of a lease is three years and a deposit of three month’s rent is required. It may be unwise for a new start-up to commit to a three-year lease with a legal obligation to pay rent for the full lease term and have the capital costs of fitting, furnishing, and equipping an office as well as paying three month’s deposit.
Co-working space offers a start-up total flexibility with no up-front capital costs; and in many cases offer daily rates.
There are now over 100 locations in Bangkok which provide co-working space facilities. HUBBA, the biggest operator, offers services in three locations in the city.
One of the key attractions being marketed by co-working space operators is the potential for collaborating with like-minded young entrepreneurs. However, a major concern is privacy. Start-up entrepreneur may not want other people to see or overhear what their master plans of success include.
Aspiring entrepreneurs would need to consider a number of key factors when deciding on where to set up their new business ventures.
Obviously, budget is a key consideration both in terms of monthly outgoing expenses and capital costs of fitting, furnishing, and equipping an office.
The second key factor is flexibility in terms of length of commitment. It is important to remember that decisions need to be made which prioritize the need for privacy versus collaboration. The start-up founder needs to weigh the advantages of a possible collaboration brought about by using co-working space against the need for privacy and confidentiality.
An article written by Nithipat Tongpun, Executive Director, Head of Office Services, and Thatchanan Siddhijai, Senior Analyst, CBRE Research & Consulting, CBRE Thailand for Bangkok Post dated 5 April 2017.