Property savings missed by SMEs: Research shows only 5% of small business consider property an area for savings
November 27th, 2009 | by Amy Edwards
This article was submitted by Andy Birks from Regus.
Research among 1,000 SMEs, reveals that while further cut backs are intended for the next financial year, small businesses are failing to see the opportunity for significant cost savings on their property portfolio and are instead focussed on head-count.
The research commissioned by Regus, the world’s largest provider of innovative workspace, shows that for 28% of businesses with 11-50 employees, staff costs are the main focus of overhead reduction. While only 5% are planning to make their biggest savings in real estate. 61% of SMEs are planning to cut overheads in the next financial year by up to 10%. More drastic cuts of between 11 and 20% are planned by 24%. For the majority of businesses property is the second biggest fixed overhead so it is surprising to see that 95% of businesses do not consider it an area where major saving can be made.
Andrew Birks, 
UK Sales Director at Regus says; “The economic climate remains challenging but cutting headcount is not the only solution for reducing overheads. Only so many positions can be reduced before your company’s ability to deliver, will become seriously affected. I’m astonished that only 5% of SMEs are focusing on their property set-up. Either the remaining 95% are already working in a flexible way with minimal fixed overheads or they do not understand that there are alternatives to costly, fixed-term real-estate and even ways to move away from seemingly long-term property arrangements.”
The research also explored the cost-cutting intentions of micro-businesses (ten people or fewer). For this sector, the main focus of overhead reduction is business travel with 20% of businesses planning to make the biggest percentage cut here. These respondents were also more likely to focus on real estate than their bigger brothers, with 12% citing it as the area where whey plan to make the biggest saving.
Research among 1,000 SMEs, reveals that while further cut backs are intended for the next financial year, small businesses are failing to see the opportunity for significant cost savings on their property portfolio and are instead focussed on head-count.
The research commissioned by Regus, the world’s largest provider of innovative workspace, shows that for 28% of businesses with 11-50 employees, staff costs are the main focus of overhead reduction. While only 5% are planning to make their biggest savings in real estate.
61% of SMEs are planning to cut overheads in the next financial year by up to 10%. More drastic cuts of between 11 and 20% are planned by 24%. For the majority of businesses property is the second biggest fixed overhead so it is surprising to see that 95% of businesses do not consider it an area where major saving can be made.
Andrew Birks, UK Sales Director at Regus says: “The economic climate remains challenging but cutting headcount is not the only solution for reducing overheads. Only so many positions can be reduced before your company’s ability to deliver, will become seriously affected.
“I’m astonished that only 5% of SMEs are focusing on their property set-up. Either the remaining 95% are already working in a flexible way with minimal fixed overheads or they do not understand that there are alternatives to costly, fixed-term real-estate and even ways to move away from seemingly long-term property arrangements.”
The research also explored the cost-cutting intentions of micro-businesses (ten people or fewer). For this sector, the main focus of overhead reduction is business travel with 20% of businesses planning to make the biggest percentage cut here. These respondents were also more likely to focus on real estate than their bigger brothers, with 12% citing it as the area where whey plan to make the biggest saving.
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