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36
BUDGETING

A Suite Deal
 

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Trouble finding office space? This business created its own

Greg Steckler has been building residential log cabins for 16 years. You might think his business, Log Rhythms, in Bend, Oreg., would be decidedly low-tech -- rustic, even. But Steckler must keep up with technology. Log Rhythms uses computer-aided drafting (CAD) systems to design its homes, and staying current with the technology is a big expense. "It's hard to do without bankrupting ourselves," he says.

Steckler was a great candidate for renting space at an executive suite or office business center -- furnished buildings in which tenants share a common administrative staff, the use of conference rooms, and high-tech accoutrements (videoconferencing and high-speed Internet access). But most suites are in big cities or their suburbs -- meaning that Steckler had to either move to Portland or get a lot more resourceful locally.

For help, Steckler turned to his industry group, the American Institute of Building Designers. As it happened, two of his peers, Bob Stalvey and Rick Wright, had similar needs. And "we all used the same software," says Steckler. After comparing notes, it dawned on them: why not share resources? "We didn't compete with one another, and it was easy to see it would help," he says.

Together they formed the Northwest Building Design Center (NBDC), an incorporated structure under which all three businesses could share space and equipment yet remain financially autonomous. It's essentially a cooperative subsisting on revenues of $75,000 -- enough to cover $3,000 in monthly rent and other mutual overhead expenses. Some NBDC revenues come from the margins Steckler and his partners make from charging rent to five other designers who have joined the cooperative.

By uniting, Steckler and company also garnered immediate cash. They were able to sell off spare equipment and share monthly Internet and hourly tech-support costs. They also pooled their intellectual capital and split the tedious task of tracking high-tech trends. Steckler keeps tabs on the latest in design software, for example, while another member monitors construction materials.

So why would you bother with an executive suite full of strangers when, for the cost of some initial rent, you and your peers could start your own confederacy of soloists? Marcia Nichols, president of the Executive Business Center, in Concord, Calif., thinks the classic argument for outsourcing, namely that it removes a number of worries from your personal priorities, applies to conventional sharing arrangements. "You have someone fully dedicated to handling any possible problems that come up," she says.

For Steckler, however, such help isn't necessary, since NBDC provides him and his colleagues with a mixture of control and collaboration well matched to their own goals. And the arrangement has the added benefit of allowing enough room for each collaborating business to maintain its independent identity. "We all have a specialty, and that's what we want to promote, rather than homogenize into one big company," says Steckler.

Last updated: Mar 1, 2000




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