Main Street Is Changing
Do you work from home, or do you have a brick-and-mortar business? While COVID taught us about the convenience of working from home (who can give up a one-minute commute?), it’s been the inflated economy and increase in costs that have driven many small businesses to embrace a location-independent business. That could mean a big change for communities over the next five years.
If you’ve been thinking about ditching the monthly cost of office rent, you're not alone. A recent study by Clarify Capital shows a shift in how small businesses are viewing office space.
Work from Home Is Great, Right?
It can be. Here's what it could mean for you and your business:
Cost Savings. The study found that cost is the biggest concern for small business owners when it comes to office space. Rising rent has forced many long-time businesses to relocate off “Main Street” but to where? Rent is high everywhere. Last November, in a survey released by Alignable (a small business networking group), 40% of US small businesses admitted they couldn’t pay their rent in full or on time. The hardest hit were beauty service providers with 57% of them not able to pay their lease, with 45% of gyms, and 44% of retail and restaurants impacted.
While going remote might be difficult for the industries mentioned above, those who are able to could free up a significant chunk of their budget and invest those savings in other areas of the business.
Increased Flexibility. Remote work arrangements offer greater flexibility for you and your employees. This can lead to a happier and more productive workforce. Work location flexibility also won’t be a reason for them to leave your employment.
Reaching Top Talent. The talent pool expands dramatically when you're not limited to a specific location. You can find and hire the best person for the job, regardless of where they live. This is extremely beneficial in a competitive job market or under-skilled area.
The Difficulties of Remote Work
But remote work isn’t right for everyone and every business. Here are some things to consider:
Nature of Your Business. It’s impossible for some industries to allow work from home because of the nature of the business, like owning a gas station. After all, it’s very difficult to sell gas from your living room (but maybe onsite AI robots can help in the near future). Additionally, certain businesses require in-person collaboration or access to specialized equipment. Evaluate if a fully remote model works for your specific needs.
Employee Management. Managing a remote team requires different strategies than an in-office setup. In 2023, ZipRecruiter’s chief economist Julia Pollak told CNBC that, “It’s an incredibly challenging, frustrating and disorienting time for employers when the tool they relied on most, observing employees in-person, is gone.”
Ensure you have the tools and processes in place for clear communication and maintaining a positive team culture. This may require new metrics, key performance indicators, and/or training for managers.
The Future of Work. While most larger companies haven't fully embraced remote work yet, the trend is undeniable. As employees seek flexibility (and costs continue to rise), larger companies may soon follow suit. But that will also require a change in culture, moving away from the large-scale company campus “towns” that became so popular in the tech and science sectors.
The office space landscape is changing. By understanding the remote work trend and how it impacts your business, you can make informed decisions. Consider if a remote or hybrid model could benefit your business and unlock new possibilities for growth and success by cutting back what is probably one of your largest expenses.