Establishing a pied-à-terre
Wednesday, February 12, 2020
For any business, the decision to expand into a new region is one that needs a fair amount of research and questions answered before the wheels can be set in motion. What region? What’s the customer potential? What sort of presence is needed? Premises or no premises? New staff or relocate a team? What’s the budget? And so on…
Towards the end of 2018, West Yorkshire-based Propack found itself in just this situation as it worked steadily through a period of inward investment and holistic growth.
The 24-year-old business, which specialises in digital printing, direct mail and print management, does around 20% of its business with customers local to its 2,790sqm Huddersfield site, while the remaining 80% of its work is carried out nationwide for a broad cross-section of sectors and businesses, both trade and direct clients, from small to blue-chip including Sky Bet, Travis Perkins and GHD.
In recent years it has seen a significant increase in the amount of activity coming from the capital, but has until now had no physical presence there and the company felt this was becoming an issue.
“We’ve recruited a lot of clients in the London area in a short space of time,” explains account director Gary Walker. “We wanted to satisfy the new market share that we had taken on there to show that we have a presence – that we are accessible in the city and can offer the right service and support,” he adds.
“In reality geography is not an issue these days, but as we were focused on growing our London business, new prospects there aired concerns about our location being so far away in Yorkshire that we wanted to address the perceived problem,” explains Walker.
First concerns for Propack were around location; the management team felt it needed to be central to the majority of their London customers, and easily accessible for their new prospects.
Cost was also a key factor with rent at a premium in the capital city, which may be no problem for the big multinationals, but for an SME this kind of outlay is a major consideration.
After reviewing various options, Propack settled on a very savvy approach to get started: rent a managed office space for meeting new and prospective customers, sending staff from Huddersfield to keep the city wheels turning.
Over the past decade, with new start-ups opening apace in the UK and self-employment at an all-time high, the trend for hot-desking has taken hold and serviced office spaces have sprouted across all major towns and cities, giving the team at Propack a plethora of sites to choose from.
Walker, who is responsible for overseeing the expansion project, says that after viewing several offices over a couple of months a contract was signed at the start of 2019 for a small, managed space in Bloomsbury.
“It’s within a half-mile of about 20 or 30 of our clients as well as being in good proximity to Kings Cross,” he explains. “We wanted a managed office space that could provide the facilities we needed when we’re not there, such as call-forwarding, mail-handling, booking meeting room space and such like.
“There’s a sliding scale of costs and services that you can access, which is really useful, so we chose an allocated space that we have full access to and importantly, it means there’s a home for the staff where they can grab a desk, plug in their computers, take calls and host meetings,” adds Walker.
The office running cost, according to Walker, is loosely around £30,000 per year although the overall spend can vary quite a lot depending on the amount of staff travel and overnight accommodation needed in any one month.
“We set a budget at the start and exceeded it, as always tends to be the case. It’s not just the cost of the offices in isolation, there are a lot of extras to consider.”
He says that aside from financial considerations, the key concerns during the setup period were logistical.
“It’s absolutely vital to form a plan and determine what your requirements are because although it sounds nice and easy to get a lovely new office, the major headaches can be around things such as the new telephone numbers, setting up call-forwarding to head office and connecting them to our internal phone systems for example,” Walker explains.
Linking the satellite computer systems with HQ was also an area that he says needed quite a bit of work and led to the business employing external IT consultants. “All of these things you may think are going to be easy, but can be quite a palaver in reality so you need to get everything organised,” he stresses.
"What we’ve done is a really a good entry route into a new region for a company of our size"
Over the past three years Propack has boosted its workforce from 60 to 70, added a new mezzanine floor and a raft of new equipment expanding capabilities in Huddersfield, and grown turnover from £6m-£7m to just shy of £10m. The support and sales traction afforded by the new satellite office has been no small part of that growth over the last year, comments Walker.
“We have staff in London pretty much every week travelling down for meetings with clients. I would say there’s a 50/50 split between sales meetings with prospective and existing clients.”
He continues: “Sales activity in the company is as strong as ever – we’ve recruited 10 new commercial staff in the last year alone – and the London office is now really working as an aid to that.
“I would anticipate it will become busier and we will grow in terms of office space in London. We will perhaps look to get our own premises at a certain point because the number of clients we have that are London-based is growing so much.”
Walker says that while there are no plans to replicate the London satellite office in another region, if they were to consider a future opening, it would likely be Scotland.
“That’s the obvious region for us to look at, but we would first create the need, which is what we did with London,” he explains. “We created a lot of new customers before we took the plunge and got the satellite office.
“I think what we’ve done is a really a good entry route into a new region for a company of our size I would certainly recommend it to others.”
Locations Huddersfield, London
Inspection host Gary Walker, account director
Size Turnover: £10m; 70 staff
Products Data, digital print, direct mail
Kit Xerox Iridesse, two Ricoh C9110s, two Riso GD9630s, five Konica Minolta Bizhub 1051s, an Astrojet M1, an Astrojet 3800, creasing and bookletmaking equipment from Duplo, a D&K Jupiter 35 laminator as well as a range of other finishing, folding and enclosing equipment from Ideal, Heidelberg, Moll, Kalmar and Bell & Howell
Inspection focus Setting up a satellite office to establish a presence in a new region
● Walker says for any company considering a similar path, it’s imperative to first know what your requirements are and to make sure you have a clear plan for sorting out the logistics such as phone numbers, mail and computer systems. Employing external consultants to ease headaches is also a useful option
● “The are a lot of unseen costs that you need to factor in, so do your homework,” he stresses. “Also you may be unable to forecast how much you’re going to use the office, so you may start off with a hot desk and quickly realise you need a permanent desk, then before you know it you’ll need three and that’s where cost can very quickly escalate.”
● Speak to a number of different office space providers and look at all their different services and costs. “We looked around and landed on one that we were really happy with on all levels and that was key.”