Ask the expert: Instant offices

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The key to Rob Hamilton’s business is his people, according to David Glassman, visiting fellow at Cranfield University’s school of management.

It is inevitable that Mr Hamilton will need to appoint a small top team, containing people with different skills to his own, he adds.

“He started by himself but he will not be able to grow the business alone past a certain size and level of complexity.”

Local recruitment in the US is a smart move because it shows that Instant Offices is in the market place for the long term and cements local links with customers, Mr Glassman says. It also obviates the need for local visas and work permits.

Mr Glassman also suggests appointing a non-executive chairman with experience of overseas expansion to provide guidance and support.

Such actions create higher overheads, he admits, and he suggests that Mr Hamilton consider raising both loan and equity finance.

Mr Hamilton is facing a new level of complexity in his business as his workforce rises above the 50-person mark, according to Howard Hackney, a partner at Grant Thornton, the accountancy firm.

“One individual can stamp his personality and ethos on a business of up to 50 people in size,” Mr Hackney says. “After 50 it is a step change.”

The appointment of a US chief executive creates the additional risk that this person will set up a rival business in the North American market, Mr Hackney notes. Offering executive share options is one way to encourage loyalty.

Mr Hamilton can either seek private equity to expand his business, expand organically or start franchising operations, according to Mr Hackney.

“The business is too small for a market listing. A venture capitalist or private investor can provide the financial firepower to open up other operations, but it is a bigger risk because you are spending more.”

If Mr Hamilton prefers to stick with organic growth, Mr Hackney suggests that he spend his money on public relations support aimed at getting his name in trade publications, where he can act as an expert on the serviced-office market.

Franchising might be Mr Hamilton’s best option because he does not take the financial risk, Mr Hackney says. “He gets a franchise fee and shares in the success but still has a lot of financial control.”

The downside is that Mr Hamilton will make less profit on the franchised markets and he will only be as good as the franchisee he appoints.

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