In this article we will be looking at the benefits of having an office space for your trading business. This will help you to select the most efficient time to open your office and avoid unnecessary costs.
We will be looking at the following points:
- Trading without an office
- Scaling your business without an office
- Advantages of an office
In 2016, timeout magazine reported on the average monthly cost of an office in the city of London. The cost they revealed amounted to £750 per desk.
In 2017, the office provider WeWork provided details of costs for offices on Wall Street. These were priced at $810 per month, per desk.
These costs can be significant if you are a new business getting off the ground. The premium addresses may be appealing but are they really worth it?
The structure of your business is important. There are specific things that investors will definitely want to see. The best example of this is some form of financial regulation.
Trading from an office will definitely increase the credibility of your business. But when should you get one and how do you measure its true value?
I started my very first managed account programme back in 2009 online. I didn’t have a physical office to trade from.
In 2014, I was working from an office in the City of London. This was a place I could trade from, network and find new investors.
I will share my own experience and offer some guidance on how you can decide which approach is best for you.
Trading Without An Office
It is possible to build a money management business from scratch while working from home.
You will need things like financial regulation and marketing strategies. These all come before an office.
Modern technology allows you to build a business and operate remotely for a long time. There are all sorts of apps and platforms that the life of a money manager easier than it used to be.
For example, you don’t need to meet investors face to face to show them your strategy. There are many online portals that allow potential clients to see your track record.
Technology also allows you to meet clients in an online environment. This includes things like meeting platforms and online calling apps.
You can see the clients face and listen to them talk from anywhere in the world. You can also share your screen to show the client your trading strategy in detail.
My biggest piece of advice would be to build out everything you can before you need an office. Take advantage of as many online channels as possible.
Online technology is usually free or low cost. It can also be presented in a way that looks highly professional.
A professional trading office is often the shop window to your business. Many traders fail to realise is that having an online shop window is just as effective in the beginning.
Your online shop window should include a professional website and social media channels. You also need a strategy for distributing your track record.
Register on all the investment databases and upload your trading performance regularly.
This will help you find early investors. Trading for these clients will help you to start generate revenues with which to expand.
Scaling Your Business Without An Office
You can boost your online traffic through targeted advertising. You can also network with related websites that welcome content from industry experts.
Another tip is to connect with financial advisors that work with professional clients. They will have a whole network of people you could work with.
They may not be able to introduce clients directly. Their value will be in knowing of introducers that may be a good fit.
Getting to know your own broker is also extremely valuable. This means making the effort to go and meet them in person.
Make sure you clearly explain that you’re trying to expand your trading business. They will also have a wealth of connections that can help you.
As your business starts to grow you will need to scale up your operations in order to cope. This will entail hiring an assistant to help you.
They should help with general administration and the upkeep of your online presence.
All of this will lighten your load and allow you to focus most of your time on trading. You should also dedicate some time to networking and attracting new clients.
My very first pitch was conducted via email and led into a video call online. I would show the investor my account and walk through some recent trades.
I would explain my strategy and answer any questions they had. This was a great way to build trust without the need for an expensive office.
If clients wanted to meet then my strategy was to utilise the offices of my broker. The broker was willing to assist me because it was ultimately new business for them too.
This gave a professional environment to host the client without having to bear any of the cost.
Advantages Of An Office
A strategic partnership can be a perfect stepping stone for getting your own office.
Your regulatory hosting provide can be another avenue to explore. They are usually very open to giving you any assistance you need to grow your business.
Get creative and think of as many different opportunities as you can.
Eventually, your business will be generating a comfortable amount of revenue. Having a professional office in a desirable location will improve your credibility.
This will make it easier to attract larger clients and more professional investors.
It’s important to find a location that you can grow into. This allows you to expand or contract as necessary during your early years.
The main purpose of an office is to use as a hub for attracting new clients. There are other ways to utilise it too.
For example, you can rent out desk space to other traders. They might have left a trading firm or bank to manage their own money.
They may be starting their new business just like you. They may even just someone that has retired and wants to trade within a community each week.
The fees that each trader pays will cover a large portion of the base costs. Again, get creative and look for as many different ways as possible to cover the cost of your office space.
Knowing when to move into an office is vital to the success of your business. It is positive to trade from an office but only when the costs are not a burden.
If you have any further questions about this article then please leave them below.
I read each one and try to reply to as many as I can.