With forecasts of the South Africa GDP Growth rate at 2.1% by 2020 we review how serviced offices support business growth. Trading Economics reported that even though growth slowed in Q3 to 0.2% the growth in finance, real estate and business services went up 1.2 % and contributed 0.2 % to the total growth year-on-year (YoY).
As most companies have plans to grow their business and increase their profits we look to clever strategies, incorporating serviced office space to take advantage of the expected growth within the industry.
Whether you are looking at market penetration or expansion having flexibility for your business ensures that you are diversified and solutions orientated.
Differentiate your business
The Entrepreneur stated that creating a growth strategy for your business is paramount as “only half of start-ups survive more than 5 years and only 1/3 make it to 10”. The question for business owners is how do you tailor your strategy to remain sustainable?
The Banking Association South Africa identified SMEs as productive drivers of large-scale economic growth both internationally as well as in South Africa. Business fosters expansion within the economy and as reported SMEs make up 91% of formalised businesses in South Africa which provides employment to about 60% of the labour force and total economic output accounts for roughly 34% of GDP.
Stats SA reviewed business performance over a 15 year period and found that even though higher income is being generated annually by the South African formal business, costs have escalated at a slightly faster rate. So businesses need to take into consideration cost reducing factors to remain profitable.
Tailor your strategy to remain sustainable
Being profitable in South Africa means overcoming the challenges faced by businesses, such as access to markets, obtaining credit to support your infrastructure as well as access to suitable technology.
We recently reported on the real cost of business when looking to access international markets, where we asked the tough questions. Working out the “real cost of a sale” while remaining relevant, innovative and profitable in the long run.
Taking Cape Town as a business hub spot, while doing business in New York and Johannesburg, the investment of your own infrastructure would be crippling within your business’ early days.
Office space in Johannesburg would be expensive to buy and would lend itself to the escalating cost of business which in turn impacts your profitability, hence the option of serviced offices lends itself to your success.
Profitability in volatility
SMEs are the backbone of employment in South Africa. We looked at the make or break of an entrepreneurship to combat unemployment. Envisioning long-term success needs to have a tangible plan for growth that supports both flexibility and agility within the South African market.
Your organisational growth strategy, should you be head-quartered in Cape Town should look to include renting professional office space to allow for your business / market expansion. That way your business can concentrate on both your internal as well as external growth strategies.
Office space to rent in Johannesburg, as an example, removes the need for large investment in terms of owning your own infrastructure which allows for you to concentrate on;
- Developing new products and services
- Creating better marketing strategies for your growth
- Hiring local talent for your market expansion
Greater market share while being agile in serviced offices should be your main goal to ensure your long-term profitability.