There could be a case for opening an office in space. Think of the benefits. From the lower atmosphere you could service the whole of the Earth’s design needs via satellite. Staff would live on board your orbiting craft without having to suffer the early morning traffic, and wouldn’t relaxing space walks be the ultimate creative inspiration?
Well, maybe one day. But with the triumph of digital communications, the reasons for choosing an office location continue to evolve. A growing group makes many demands on its building space. So just when and why should you set up a new office, where do you locate it, and is there a need to be nearer to clients?
Institute of Directors policy executive Richard Wilson advises making a thorough analysis on paper about possible expansion while things are still at an abstract stage. He advises that if a business is looking to expand, it needs to situate itself near to resources such as supplies of skilled labour, communication links, transport and, of course, work.
Wilson suggests there is a tendency for consultancies to set up near to one another and benefit from common factors. Central London is one of a number of geographical centres in which design groups can mutually flourish.
“A lot of companies employed in similar industries do like to congregate locally to one another. It’s the whole issue of industrial clusters,” says Wilson.
Technology makes many things possible, but proximity to your client can have huge value and Wilson warns not to forget the role played by human contact.
“It is a piece of cake to export compared to what it once was. Communications across continents have become so enhanced by technology. But although your communications can reach all over the place, a lot of business is improved by face-to-face contact. I don’t think we should underestimate it,” he says.
Glasgow consultancy 999 decided to set up an office in Manchester 18 months ago to service long-standing clients such as Reebok, CWS, Orange and a number of smaller accounts based in England. But things have turned out quite differently following the move. For some clients, distance seems irrelevant.
Manchester-based 999 business development manager Gareth Ford Williams says: “Things didn’t quite go to plan. Reebok and CWS are our two largest accounts which have been with us for over ten years. The new office was set up by one person who came down from Glasgow and recruited new staff.” The UK accounts were then transferred to the office in Manchester, but some of the clients were happier to continue working with people they already knew.
“Obviously, relationships build up over time and in the end CWS went back up to Glasgow, while Reebok stayed here. But even stranger was when Alan Bullock, formerly creative director at Protocol, joined and won us the accounts for a Scotch whisky and Highland Spring. You can see the distillery from our Glasgow office, but the client wanted to work with Alan [in Manchester]. The first reasons for opening the office have fallen flat, even though we have now got some healthy accounts,” says Ford Williams.
You should also consider the clients. Are they happier dealing with a particular branch of the consultancy? The Chase Creative Consultants set up its Leeds office knowing clients in the area were unwilling to deal with its Manchester base.
Chase head of new business Martin Monks speaks from experience: “Design travels north-south, but it doesn’t travel east-west in this country. Clients are willing to come north, but clients in Leeds would not deal with consultancies in Manchester.”
This is an interesting scenario. It would seem there is a pattern of regionality in the design industry which breaks the country into markets by their area.
Monks mentions the boom-slump cycle a new office experiences due to the more sporadic nature of its leads. This can be softened, he says, with help from the main office during periods that the start-up’s resources are fully committed. Then there is the client conflict issue to consider. You might manage neatly to work for rival companies if you can show that each can be handled by a separate consultancy operation in a different location.
“It does alleviate client conflict issues. One client in Yorkshire approached us even though we were working with a competitor in Manchester,” adds Monks.
Being accessible in your local region is critical. This is not just about having a cool postcode, but keeping clients and staff at ease and close to home. It is difficult for clients to get to remote offices, or attend talks and presentations, and location impacts on your company image.
For some, a new office entails starting over completely. New clients, new bank accounts, new staff all provide particular pressures which the established consultancy or head office has long since forgotten about. As Navy Blue director Geoff Nicol says, it’s when the printer packs up or you don’t know precisely which toner cartridge to buy that you begin to realise that you cannot stay as focused on the work as you would like to.
Having grown the five-year-old Edinburgh consultancy to 20 people, Navy Blue decided to restructure, incorporating a start-up operation in London which was initially supported financially from Scotland.
“We had been planning on spreading the risk and creating a new centre to capitalise on the Navy Blue brand. We wanted to expand into a different geographical area and London is probably the biggest centre of design in the world. The design market in Edinburgh and the central belt of Scotland is different – you are not competing against the number and calibre of specialist groups that you have here,” says Nicol, who moved to London to head up the new team.
“We decided to test the water and started up in an office space last February. We have centralised finance and IT, and had buying power from the accounts in Scotland to show suppliers to arrange credit. We didn’t make it a limited company in order to get trading right away. We had a lot of advantages in that we already had a portfolio and were already trading, so we could concentrate on the core function of design.”
He adds that on the downside there is a lot more specialised competition and as a result it is harder to get through the door of the client. Portfolio and reputation are key. Navy Blue relies on the quality of its creative work to the point where Nicol says it is worth taking highly creative opportunities that can be used as signature pieces for PR – even if they are lower paid.
On the move
Weigh up the alternatives of working long distance against the need for face-to-face communication when deciding whether to set up nearer clients.
You shouldn’t take anything for granted. People set up offices for logistical reasons, but circumstances can change quickly.
Clients are seen to have bias towards certain geographical areas.
Start-ups require bags of energy, even when they’re effectively an expansion, unlike existing operations which keep turning over relatively easily.
It’s important to get local knowledge and make contingencies for opening bank accounts, finance, IT support and the like.
You also need to be realistic about your lead times and break-even predictions when starting from scratch.