Big Opportunity in Small Offices

Small businesses are the heart of the economy, providing jobs and rendering essential services to customers across the country. While the Cape Town office market continues its expansion, an increasing number of SMBs are emerging as top tenants.

As the engines of future growth and innovation, small businesses have specific requirements that distinguish them from their larger peers.

In this article, we take a look at the SMB landscape in South Africa and Cape Town in particular, find out what specific office space features a smaller enterprise needs in order to succeed, and look at how office space can be tailored to the needs of this market segment.

Small businesses bring big gains

There’s a common misconception in the market that the economy is fuelled by the activity of a few big corporations. In reality, small businesses are a crucial part of the economic landscape and currently contribute more to GDP in many countries than traditional large corporations.

In the US, small businesses account for 48 percent of jobs and 43,5 percent of GDP annually. Without small local enterprises, just under half of the world’s biggest economy would vanish.
Many large household name brands started out as small businesses. Apple, Microsoft and even large manufacturers like Coca-Cola all began in the garages, kitchens, and living rooms of dynamic entrepreneurs.
In South Africa, over 700 000 small businesses are currently in operation, with 15% of employed young people and 21% of people over 35 owning their own enterprises.

Unlike large corporations, small businesses can focus their full attention on a specific product or segments of the market and disrupt the existing competitive landscape.

The future is small – and that’s great news for commercial property

The challenges of slow growth and high unemployment need to be overcome by all SA businesses and expecting corporates to save the day is wishful thinking.

Instead, the SMB sector is perfectly positioned to create jobs and generate unique new brands for the country’s growing middle class.

It is estimated that small businesses directly generate a third of value added in South Africa.
In 2020, small formal firms owned roughly a quarter of total business assets.
Overall, South African SMBs are both more labour intensive and more profitable than large corporations.

With small businesses playing such a large role in the economy, office spaces – which traditionally focused on large corporations – will need to pivot and meet the needs of smaller tenants.

SMBs have the potential to bring reliable rental income and a dynamic modern image to any commercial property in Cape Town. Here’s what they need to thrive in a commercial building.

Understanding what small businesses need and exceeding their expectations

SMBs are famous for achieving more with less – and that includes less space.

To maximise their productive areas while keeping rental overheads down, smaller business tenants need an office space with zero space wasted. Here are some elements of the ideal small business premises.

A place to connect

Creating collaboration spaces a short walk from work areas will bring teams together and can be a great training area too.

Flexible seating

Assigned desks can create a rigid culture and reinforce hierarchies and power imbalances. Swappable seats create a sense of collective freedom and equality in the workplace and are ideal for SMBs with a smaller floor area.

Fully equipped meeting areas

These should be able to be closed off and have full teleconferencing facilities for Zoom meetings and client outreach.

Privacy when needed

Dedicated workspaces, preferably toward the back of the office space are a great incubator of ideas because they provide areas where the team can focus and get work done.

Building and small business owners should note that each of the spaces designed for SMB tenants may need to contain some or all of these very different spaces, making office design and layout essential.

For shared office spaces, a central core of bookable meeting rooms surrounded by workspaces – and a welcoming collaboration space near the entrance – may be an ideal layout.

A modest investment in office repurposing to meet the needs of SMBs could pay big dividends in the long run as the building becomes more marketable and vacancies drop and stay low over the years.