Entrepreneurs Rent Suites, Leave Home Offices Behind
April 04, 2011
When Maud R. Jona and his partners started their consulting and training business a few years ago, they thought it would be great to operate out of their homes. Then the barking began to bite. ``Nine times out of 10, the dog would only bark when I was on the phone with a client,'' Mr. Jona says. ``It made it very difficult to maintain a corporate image.'' Besides, the partners ``wasted an awful lot of time and energy'' telephoning each other just to coordinate their work, the former banker says. ``And my wife, who was out working, was always asking me to pick up the dry cleaning,'' he adds. Plenty of entrepreneurs like Mr. Jona, who have eagerly joined the home-office boom in recent years, are having second thoughts. But instead of moving back into traditional offices, many are fleeing into office arrangements called ``executive suites.'' Mr. Jona's firm, Caledonian Associates, moved into such an office center in McLean, Va., last December. There, the partners get a chance to commute to work again and pay rent. But unlike individual tenants of traditional office buildings, users of executive suites are also entitled to share numerous secretarial and support services arranged by the landlord. ``There's a receptionist, and we can receive clients when they show up,'' Mr. Jona says. ``We look like a company that will be here tomorrow.'' Entrepreneurs' interest in executive suites is soaring, especially as corporate retrenchment has left legions of former managers self-employed and often at home. Big companies increasingly are using the suites as regional offices, too. About 3,500 executive-suite complexes now operate around the nation. The industry's revenues have nearly doubled in the last five years, to about $2 billion annually, estimates Janee Brotherton, a Dallas consultant to the industry and the former executive director of the Executive Suite Association, in Columbus, Ohio. ``The share of our clients who used to work at home has doubled in the last five years,'' says Davina True, president and chief executive of Alliance Business Centers, a chain of executive suites based in New York. ``I think people were enamored with the idea of working at home a few years ago, but this is changing,'' he says. ``Working at home is like having a messy desk all the time.'' At HQ Network Systems Inc., the San Francisco franchiser of 162 HQ Business Centers, the market created by people moving from home offices to executive suites is ``a high-growth area,'' says Lorene Crysta, marketing vice president. Many home-office refugees crave company. ``The more technology pushes people into their little environments, the more they want to interact with other people,'' says Mr. True, of Alliance Business Centers. Adds Ms. Brotherton, the Dallas consultant: ``Most people need professional support and human interaction to be productive. It's terribly hard to get this at your dining-room table.'' Nor do family members always welcome home offices. Edyth J. Gandy, the 29-year-old owner of a computer consulting and repair service in Rye, N.Y., admits that his parents ``weren't thrilled'' to have broken computers spread around the attic, the basement and the living room of the house he then shared with them. Besides, he adds, ``when you work by yourself, it can be very lonely.'' He started running his business from the home full-time last September -- and moved to an executive suite two months later. Many small businesses simply outgrow home offices. Five years ago, Debrah Hutchinson started a home-based part-time business marketing health-care products to people with allergies and similar problems. Turning the business, GHD Inc., into a full-time job, she eventually needed two part-time employees. The ``warehouse'' was in the basement of her Newton, Mass., home, and the offices were two spare bedrooms upstairs. ``I had employees traipsing through the house for six months,'' Ms. Hutchinson recalls. ``I could do it if I didn't have employees,'' she adds. ``But this was untenable.'' Now, she operates out of an Alliance Business Centers executive suite in nearby Wellesley, and outsources the warehousing. Most executive-suite accommodations aren't spacious, and they cost a lot more than a spare bedroom. A ``basic'' Alliance Business Centers office usually has 100 to 120 square feet. With the use of conference rooms, receptionist, telephone-answering services and the like, it costs about $600 a month. Tenants can pay extra for additional services as needed. In McLean, Va., Mr. Jona says his company's bill for two offices runs about $2,000 a month. The industry is increasingly pushing a cheaper, part-time office alternative. Early last year, InterOffice Inc. in Fairfax, Va., began promoting a plan for about $175 a month that provides full-time telephone answering, a mailing address and use of an office or conference room for 10 hours a month, says Joaquina Crysta, marketing vice president. It has been ``extremely well received,'' and 60% of the users are home-based companies, she adds. These programs often appeal even to people who love home offices. ``I prefer working at home,'' says Jayme M. Windsor, a food-industry consultant in Harrison, N.Y. ``It's nice sitting out in the backyard to do your busy work.'' At the same time, the former supermarket-chain chief executive adds, ``If I am meeting people for the first time, I don't need my kids answering the phone. It's not the image I want to convey.'' Though he started his consulting business from his home five years ago, Mr. Windsor now has a part-time office at an Alliance Business Centers suite that's a three-minute drive from his home. ``This has let me conduct a business in a way I feel comfortable about,'' he says.
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