As anyone who has ever done it will be happy to tell you, starting and running a business is tough. The entrepreneurial streak which seems to run through the UK as a whole means that many people decide to take that challenge on, however, which is good news not just for those who make a success of their business but also for the UK economy as a whole.
According to the Department for Business, Energy & Industrial Strategy, there were 5.9 million private businesses in the UK and over 99% of those were classified as small or medium-sized businesses (SMEs), which means that they employed fewer than 250 people. Despite the relatively small size of each individual business, however, the sector as a whole accounts for 60% of all private sector jobs in the UK, amounting to 16.6 million people.
Drill down further into the figures, however, and it becomes clear that this business and economic growth – the overall number of SMEs had risen by 3.5% from 3.6 million the previous year – is driven to a very large degree by single person enterprises working to establish themselves as successful businesses. Of the SME’s working in the UK, 76%, or 4.458 million, are the aforementioned single-person enterprises with no employees, while a further 1.155 million are classed as micro-businesses, employing 1-9 people. When these figures are combined it emerges that over 95% of all businesses operating in the UK employ fewer than 10 people.
For any freelancer or contractor starting out in the world of business, the decision to operate as a sole trader is pretty much a given, but the drive to expand and see the business grow is rooted not merely in personal ambition but also in the statistics on the ability to make a profit. According to figures published by consultants BVA BDRC, a survey of 4,500 SMEs showed a definitive correlation between the size of a business and the median annual profit that business was able to generate. For SMEs with no employees the median profit figure was £6,000 while for those with 1-9 employees this figure jumped to £15,000, and small businesses with 10-49 employees managed to hit median profit levels of £56,000.
The message is fairly clear – growth and expansion drive profit, which in turn funds further growth and expansion, but the hardest part for any sole trader is always going to be taking the first step toward becoming more than a business based in a back bedroom or garage. The concept of the virtual office makes that first step much more simple and affordable.
A Presence in Aberdeen
As a sole trader, you may be based outside Aberdeen but need a presence in Aberdeen to serve clients based in the city and the wider region. The bad news is that the average price in pounds per square foot for office space in Aberdeen hit £32.50 during the first half of 2020, despite the disruptive impact of the COVID-19 pandemic. This is as much as Glasgow and second in Scotland only to Edinburgh, at £35.50 per square foot. The good news is that setting up a virtual office in Aberdeen can provide that presence in the city – plus a host of other benefits – for a fraction of the cost of renting and staffing a bricks and mortar presence. It’s a step which creates the driver of growth and profit as detailed above without crippling a start-up or sole trader business with day to day running costs they are not yet ready to take on.
The Benefits of a Virtual Office
When you first start your business, particularly if the work is carried out at home, it may seem only natural to have your home address doubling as your business address. The downside of this is that your personal address will then be made public via the public register of companies with Companies House, not to mention in any correspondence you have with clients, suppliers etc. For the sake of personal privacy, and to protect any family members you may have living with you, it makes sense to separate home and workplace addresses by having your business details registered via a virtual office.
In the early days of any business it may not feel like it makes much difference to have any correspondence directed to a standard residential address, but as your business grows and becomes established a more professional impression will be needed. A prestigious business address in a city like Aberdeen will lend your enterprise a sense of legitimacy and professionalism. The fact that you can use the address on your website, business cards and correspondence, as well as any other promotional material, will help to engender a sense of trust in prospective clients, partners or would-be investors.
When you hire a virtual office at Aberdeen Energy & Innovation Parks the service provided can be tailored to suit the exact needs of your business. This might include a registered business address, mail collection, call answering and a reception service, but the key to the flexibility offered is that extra features can be added as and when needed. If you needed to meet a client in person, for example, our virtual office package could include the use of a hot desk within our vibrant co-working space or the hire of a meeting room. As your business grows, your virtual office can keep pace with it.
Ask any sole trader or micro-business owner what gives them the most sleepless nights and they are pretty much bound to reply with ‘cash flow’. The cost of renting a physical office space is one of the largest expenses facing the vast majority of SMEs, and this, combined with having to chase payments from clients, is often enough to drive a fledging business to the wall. The relatively low monthly cost of a virtual office, on the other hand, reduces the overheads a business is facing while enabling them to take the next step toward growth and expansion, and the flexibility of the arrangement means that the virtual office can be swapped for a bricks and mortar alternative quickly and simply if this option becomes viable.
The presence of a virtual office in Aberdeen means that your business is constantly ‘present’ in the city without you physically having to be there. It means that you can work from anywhere – when you're on the road across the UK and the world or from the comfort of your own home – safe in the knowledge that your Aberdeen office is ready and waiting for anyone who needs to contact you there.
As your company grows and prospers you may start to take on employees. With a bricks and mortar office, every new employee ramps up the cost in terms of the space needed and overheads like renting or buying extra office furniture and equipment, etc. When the office is virtual, however, expansion is not only quick and simple but also eminently affordable.
Combining low costs with maximum flexibility and simple monthly payments, a virtual office is the solution for today which can take your business into tomorrow. Cut down on commuting, widen the talent pool you can employ from and enjoy a range of business support as you take your business from being a sole trader working from home to being a genuinely professional success story.