That’s Pacific Business Centers performance with their Virtual Office Business, which the company’s principals revealed at the last Global Workspace Association (GWA) conference in Atlanta.
In previous posts we discussed how Pacific has made virtual office a priority, to reach 200 virtual office clients per center in some cases or more than one quarter of the company’s overall revenue. But how much center resource does it take to support that business? Well, a big portion of this answer is that it only requires less than 5.9% of the centers footprint to support the 27.4% share of total revenue, which the virtual office business represents at Pacific.
“This is even an overestimation,” said Scott Chambers, COO of Pacific Business Centers and GWA Board Member. The 5.9% is the sum of the square footage used by the conference rooms, touchdown lounges, and other space required specifically to support the virtual office business, divided by the total square footage of the centers. However, 17% of the meeting room hours are still used by full time clients. Scott added: “Roughly half of that meeting room square footage would still be needed to support our dedicated office clients. Most of our centers have 5 dedicated meeting rooms. Our full time clients could not function with just 17% of 5 meeting rooms!”
Another benefit of a strong virtual office business is to provide additional amenities to the full time clients simply by adding more meeting room capacity whose utilization can be better optimized. With more meeting room capacity, it is more likely for a room to be available at any one time, while at the same time managing the infrastructure to higher levels of utilization per room in average.
Considering that rent is the number one expense item of a business center, representing close to 45% of revenue on average per the GWA 2013 Industry Survey, it is clear that the virtual office business and its associated meeting room revenue is by far Pacific’s most profitable line of business since it uses less than 5.9% of its real estate footprint. But, how about the incremental level of staff required to support a large number of virtual office clients? Pacific Business Centers has conducted a detailed analysis in that respect, capturing the time spent by the front desk people to support each and every request from its VO clients in 5 seconds increment. The results were compelling.
In the end, supporting the virtual office business did not require Pacific to add to its front desk staff. This is in part because the company decided to outsource all of its phone answering business to CloudVO three years ago. This freed up the front desk staff to deal with the incremental mail handling and on-site receptionist services, and in the end helped provide a higher quality service. No receptionist needs to ask an on-site client to wait while she handles a phone call anymore!
Scott Chambers added: “The cost of the outsourced phone answering is roughly 1/3 of what we charge to the end-user for that service alone, so it’s all profit. Our analysis showed that the actual time spent by staff per VO client to support their requests adds up to pennies on the dollar. In the end, factoring the outsourced phone answering variable costs, the front desk staff cost needed to support the incremental traffic from the VO business, and the real estate cost of the meeting rooms, our analysis showed that our Virtual Office business is 5 to 6X more profitable than our dedicated full time office business.”
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CloudVO ™ Analysis Team