This depends very much on your business and your clients. Dial-a-Nerd for example is in the process of centralising its offices, and closing far flung satellite offices. However, as an IT provider, much of what they do can be done remotely, they offer excellent service, and clients are comfortable knowing their IT needs are taken care of, even if it’s not onsite.
A very different example is offered by Chris Heaton, CEO of Brand Inc, a Joburg-based agency that opened a Cape Town office when it realised it was losing a major client.
By 2009 Brand Inc had grown its account with the South African Rugby Union (SARU) to R1,3 million, which, while not a huge account, was very important to the company’s growth. “The problem was that they are based in Cape Town and we were in Joburg, and even though they liked us, there was a geographical concern,” says Heaton.
By 2010 Brand Inc’s billings had dropped to R350 000. “We suspected they were using a local agency. We were right. There was an agency 15 minutes away who were at SARU’s beck and call. The only we could compete was to open an office in Cape Town. It was a strategic decision, but they were a key client. Marketing genius Goodwill Moyo agreed to join our team and head up a new office in Cape Town. He won SARU back, became one of their strategic partners and turned them into a client that now bills R9 million a year. You can’t always work remotely.”
Brand Inc’s story is a perfect example of clients who feel more comfortable doing business with companies that are close, and who they can have face to face meetings with.
Evaluate how you do business now. Do your clients expect face time with you? Who are your competitors outside of Joburg, and how do they interface with your potential clients? How important is geographical location in your industry?
Be careful – opening a second or third office if the revenue in those cities does not justify the added expense could actually hinder growth more than help it. Evaluate all your options, do the numbers, and then make a decision.