My company deals with providing supplies for construction companies. Up until 2007, business in the US was great. We had at least 30 active contracts. However, the housing slump reversed our fortunes. Business virtually dried up. Since supplying construction supplies was my main business, I wasn’t willing to start all over and try out a new field. I was determined to keep my company afloat even if it meant moving operations overseas.
Interestingly, most of the construction companies were also looking for overseas contracts. I decided to do some research on the overseas markets and the possibility of moving operations to one or two countries where there was a housing boom. My research indicated that construction demands in emerging economies in Asia and Africa were quite high. Since most of the business in Africa was already taken up, I decided to try out Asia. Competition was quite low as most construction companies wanted to avoid high operation costs.
I had to make sure that my company survived a low competition market for a few years. Therefore, I had to select a market where starting a business was easy but, high operating costs kept competition low. After this, I was to ensure that I come up with ways to keep operating costs low to ensure profitability. My choice markets were Kuala Lumpur and Hong Kong.
The main reason why most competing businesses avoided these two cities is the high rent rates charged for office space. To go around this problem, I decided to rent a virtual office in each city. This would allow my company to have a presence in each city without having to incur high rent rates.
To ensure that I got the best service at affordable rates, I used the following criteria. The company renting out the virtual office address in Hong Kong and the virtual office in Kuala Lumpur had to be an international company. This would make it easier to get virtual space in other countries if need be. It would also allow me to leverage my business to get affordable rates. The company should also have professional staff who are their respective cities locals. This would put my company in a better position to penetrate into the local markets.
My strategy worked perfectly. The virtual space rented enabled my company to run operations in these two cities quite easily. I have been able to sign huge construction supplies contracts in the boardrooms provided as part of the package. I can actually say that my business’ success in these cities has been largely driven by virtual offices.