Have you fallen into the hidden capital trap? Traditionally, success in the business world has been measured by how many floors your office skyscraper had, but savvy CEOs are realizing that modern business is about much more than your square footage.
In this article we’ll look at the benefits of selling a commercial property, we’ll examine a hypothetical case study, and we’ve got some practical tips for CEOs wanting to make the most of the change.
Bridging the innovation investment gap
Technology and AI in particular are moving at an incredibly fast pace. Businesses that don’t have the capital to invest in developing high-tech ways of working and talent acquisition are going to get left behind.
Rather than borrowing to fund this, which can be expensive, leaders should be looking at where they could unlock existing liquidity. This means being honest and objective about the purpose your commercial property serves and not just maintaining an office for the sake of ego.
A theoretical case study: selling an office to scale internationally
A UK boutique management consultancy has had a high-street office for years, wanting to have a physical presence as a symbol of professionalism and trust. Now they are keen to enter the European market with a flexible, multilingual, and remote-first team.
While the office space used to house the entire workforce, the majority of the team are now remote or hybrid working and the property has become a financial drain. Their international expansion plan is on hold due to limited liquidity.
Rather than seeking investment or taking on new debt, the leadership team decided to sell the commercial property fast using a dedicated cash-buying service. This allowed them to access capital in weeks rather than months, without the uncertainty of a traditional sale.
With the money they raised from the sale, the company was able to:
- Hiring bilingual consultants in pivotal European countries
- Design and create a new online client portal
- Run marketing campaigns in the new areas
- Host pop-up leadership events in key cities to showcase their experience and expertise
- Hosting pop-up leadership events in target cities, instead of maintaining a permanent UK office
Thanks to unlocking the capital in their old office space, they were able to put their international expansion plan into action and significantly grow their business throughout Europe.
Tips for CEOs
If you’re thinking about selling a commercial property to fund development plans, there are a few things to keep in mind:
Don’t wait for the perfect market. There is never the ‘right’ time, it’s about what’s right for you. Consider cash-buying services for speed when timing is critical.
Run a scenario plan before you take the plunge. Model exactly what your business will look like with the extra cash in hand and make sure you plan for the best return on investment.
Use the sale as a PR opportunity. This isn’t about retreating from bricks and mortar or having to make cutbacks, this is you as a leader making bold decisions to drive innovation.
Talk to colleagues and even clients you trust for feedback and don’t be afraid to think outside the box – your expansion dreams could be ready to become a reality.
