Dayoffice Card, the brainchild of former Regus sales director Matthew Stubbs, enables start-ups, SMEs, sole-traders and companies with a mobile workforce to occupy office space at more than 150 business centres across the country on a pay-as-you-go basis – keeping overheads low and productivity high.

The business enables people to buy individual days as and when they’re required, or for customers to opt for a pre-paid membership plan for a fixed number of days per month, be it two or 22.

Stubbs, managing director of Dayoffice Card, said that the business had launched at an optimum time, as financial forecasters suggest that the economy is entering credit crunch for the second time in five years.

“The past five years has seen an enormous number of start-ups launch and businesses of all sizes are examining expenditure as they undertake cost-cutting measures in order to survive the next wave. Underutilised office space represents a gulf when it comes to wasted expenditure.

“The last economic crisis led to an increase in mobile and home-based workforces as spending-savvy companies became more dependent on smartphone technology and other mobile devices

“We recognised a niche in the marketplace and Dayoffice Card was established with the aim of connecting professionals who won’t or can’t justify a full time office. Dayoffice Card is very much a cost effective solution for start-ups and SMEs that are home-based or operate a mobile workforce.  It’s especially useful for those needing a more professional environment for client meetings or to complete a project free from distraction,” he said.

Dayoffice Card already operates in London and 100 other major cities and towns including Edinburgh, Birmingham, Manchester, Leeds, Cardiff, Liverpool and Sheffield, offering prestigious addresses in the heart of each city as well as office solutions in surrounding towns and business parks.

Nearly two thirds (61 per cent) of businesses said that staff would be unable to attend work and nearly half (48 per cent) said they would experience reduced profits.

Frances Coulson, R3 President, comments:

“These are worrying findings. Last year the weather caught us all off guard and the detrimental economic impact was widely reported. It seems as though a few days of icy weather this year could easily snowball into a financial disaster, especially for struggling businesses. They should be planning for the worst to avoid taking a real hit if trading suffers.”

The survey found that six per cent of business thought that adverse weather conditions could tip them into insolvency. In the retail and distribution sector, the findings were considerably higher than the national average, with 11 per cent of businesses worrying that severe winter weather could tip them into insolvency.

Frances Coulson continued: “It comes as no surprise that the retail sector is most concerned. Earlier in the year, R3′s Business Distress Index showed that retail businesses are more likely than any other to be concerned about their debt levels (41 per cent). The research also found that 58 per cent of retailers were experiencing a decrease in profit which was 24 per cent higher than the cross sector average.

“Although the last retail figures showed sales were up, people are likely to curb their spending again after Christmas. Retailers also have quarter day to contend with at the end of December, which will mean many will be paying landlords a hefty lump sum. If a business is already struggling and does not think it will withstand the pressures of severe winter weather, it should seek the advice of a professional to ensure it has the best chance of survival.”

The energy provider to businesses says it expects to see a 70 per cent increase in the number of call outs to businesses needing emergency repair work during the winter months, often due to boiler and heating breakdowns.

Despite this, many businesses overlook the regular, preventative checks on gas and electrical equipment that can maintain effi­ciency and ensure businesses safeguard their operations against these mishaps.

The following tips can help business keep the lights on even in the most severe weather:

1. Give your boiler a healthcheck: Check to make sure your boiler is working properly before winter sets in. The older your boiler the more inefficient it will be – new energy efficient boilers can help you cut your heating bill by up to 20 per cent per year. Your heating appliances should be serviced once a year by a Gas Safe registered engineer.
2. Check your central heating: Run your central heating on full to check that your radiators heat up properly. If you can feel any cold spots, especially at the top, they may need bleeding. Bleeding your radiators is a simple task that will make your business warmer and your central heating system more efficient.
3. Prepare your business for the cold: Make sure your heating and drainage systems are in tip-top condition. Start by checking that your pipes are not too exposed to the cold. You should also lag water tanks and pipes to conserve heat and prevent freezing. Spending time to prepare your business now could prevent a crisis when temperatures plummet.
4. Make your business energy efficient: Lighting accounts for 25 per cent of a company’s total electricity bill, and energy efficient lighting can help to cut these costs by up to a third. Use standby power savers that automatically turn appliances off, such as computer equipment, when it’s not being used. Each of these will save around £30 a year on your energy bills. Also speak to your provider about getting a smart meter. This will allow you to pay accurate bills based on accurate readings and give you valuable insight into your energy use allowing you to take measures to reduce it.
5. Have a back-up plan: Make sure your business is covered by a Service & Maintenance contract. Use a trusted brand and seek assurances that engineer will be on site quickly if something does go wrong with your gas appliances or electrical installation. Putting this plan in place now can prevent a breakdown turning into a debilitating business crisis later on.

Phil Manock, British Gas Commercial Services, said: “During the winter months, thousands of businesses are hit by crises caused by the cold weather that can cost them thousands of pounds and seriously impact their daily operations. However, this is often caused by their failure to prepare for the cold through regular maintenance. Taking simple steps now to make sure your heating system is in top working condition and that you have a back-up plan if something does go wrong can save vital time and money in the long term.”

The influential UK Commercial Property Lending Market mid-year report by De Montfort University, published today, found that the value of outstanding, on-balance-sheet debt fell from £208.4 billion to £201.3 billion in the six months to June 2011, a reduction of 3.4 per cent.

However, it also delivered a stark warning of the scale of the challenge facing property lenders, revealing that around a half of this debt, in a range of £85 billion-£114 billion, could not be refinanced on current market terms and that one quarter was secured on a loan-to-value ratio of more than 100 per cent.

The study, the largest of its kind to look at UK commercial property debt, estimated total UK debt of between £280 billion and £292 billion at mid-year 2011 (down from £288 billion to £298 billion at the end of 2010) including £46bn outstanding in the CMBS market and an estimated £19.9bn held by NAMA – Ireland’s “bad bank”.

This continued the measured reduction in debt seen during 2010 that has so far avoided a fire sale of property assets and a collapse in capital values. Report joint author Bill Maxted said the “process of deleveraging continued at a modest pace during the first half of 2011″.

However, the report found that the uncertainty triggered by the deepening Eurozone crisis and the lack of growth in the UK economy had exacerbated the ongoing lack of liquidity and increasing costs of capital in the property lending market.

Investigating the loan-to-value ratios of lenders’ loan books for the first time, the report found that 41 per cent – 56 per cent, or £84 to £114 billion, of loans “may not be refinancable on lending terms available in the market at mid-year 2011″.

Falling investment values meant that one quarter of this debt (24 per cent) had a LTV ratio of above 100 per cent, while just one fifth (21 per cent) had an LTV ratio of less than 60 per cent.

Lenders have been willing to extend maturing debt on non-market terms, with £48.4 billion of these loan extensions recorded by the research since 2009.  Consistent with that, a recent FSA survey found around 33 per cent of commercial property loans, representing £66 billion, to be in some form of forbearance.

The lending market also continued to contract. Two-thirds of lenders (66 per cent) said commercial property was an asset class against which they were willing to lend, but the proportion intending to increase the size of their loan books fell from around half (46 per cent) to one third (35 per cent) at mid-year 2011.

Almost all of those willing to lend (64 per cent of respondents) would do so against a prime office property, compared with just 29 per cent for a loan secured by a secondary office.

And further regional disparities were also highlighted by respondents. London and the South East were seen as being in “recovery mode” while “recovery in the provincial markets could take six years or perhaps longer to achieve with much pain during this period” – a gap described as “enormous” and “unbelievable” by respondents.

Development finance remained challenging. Those willing to lend against a fully pre-let development fell from 52 per cent to 31 per cent, and those willing to lend against speculative development fell from 17 per cent to 15 per cent.

Bill Maxted said: “Lending organisations commented that the existing liquidity crisis had been made more acute by the problems of European sovereign debt and the unknown extent of contagion between banks.

“Respondents have suggested that only an increase in confidence in the UK economy, demonstrated by a number of quarters of sustained growth in UK GDP, would signal a recovery in the commercial property market in the UK.”

Liz Peace, chief executive of the British Property Federation, the leading body representing developers and investors, said: “These figures underline how critically important it is for government to use all of the tools at its disposal to help tackle this overhanging property debt.

“This means encouraging new debt buyers in to the market – something that we think reform of the real estate investment trust regime to allow the creation of mortgage reits would help to achieve.

“It also means finding ways to encourage new investment and spur economic growth. One easy way would be to stop charging full business rates on empty commercial properties, something that is a considerable disincentive for landlords who wish to invest in premises for small and medium firms.”

Under the current system, September’s RPI is used to calculate the annual increase in commercial property taxes introduced next April. Today’s RPI figure of 5.6 per cent, the highest monthly rate since 1991, means an additional £350 million siphoned from the high street into Government coffers, according to research published today by the British Retail Consortium.

In its response to Mary Portas’s Government commissioned review of the High Street the BPF pointed out the compounding effect of linking business rates to RPI meant they had doubled over the past two decades, and if government wanted to provide certainty for retailers a better system would be to have a fixed uplift, of say two per cent – the UK inflation target.

If that was too expensive in the current climate, the Government should at least be using the rate of 5.2 per cent, which was what it had budgeted its own sums on in the Budget.

Ian Fletcher, director of policy at the British Property Federation, said: “This is bad news for retailers, landlords and the economy and comes at a time when many High Streets are fighting for their survival. At the very least the Government should not be making a windfall from business rates. It budgeted its sums on the basis of 5.2 per cent this year and should be giving the difference back.

“When finances allow the Government should also be considering two further reforms. The first to reinstate empty property relief – empty rates are an unjust tax on people deriving no income and who will be paying even more out now as a result of today’s inflation figure. Secondly, linking business rates to RPI has meant they have doubled over the last 20 years and Government should provide greater certainty for businesses by fixing the business rate uplift each year, which we have suggested should be at the rate of the inflation target, currently 2 per cent.”

The Index – which has been a good predictor of the path GDP will take – fell by 9.6 points from +0.3 to -9.3 in the third quarter as more businesses lost confidence in the economy. This news comes just weeks after GDP was revised downwards to 0.1 per cent in the second quarter and ahead of third quarter figures due next week.

And, in more gloomy news, figures last week showed unemployment reached 2.57 million and youth unemployment almost reach the one million barrier. A balance of six per cent more businesses surveyed by the FSB think that they will lay people off in the coming three months, pointing to a further increase in unemployment by the end of the year.

The FSB has long called for the current NICs holiday to be extended to existing businesses across the UK that have fewer than four employees and that employ up to the three more staff.

One in 10 businesses (11 per cent) said that extending the NICs holiday would be an incentive to take on staff, according to recent FSB research. The current NICs holiday is only open to new start ups and has not had the take-up that the Government expected it to, with only 7,000 businesses using it. By extending it, the Government has the opportunity to put more people in a job which in turn would boost the tax base and money to the treasury.

Consumer demand is also a large barrier to economic growth and so the FSB has called for a targeted and time specific VAT cut to encourage people to spend in these areas. The FSB is urging the Government to follow the lead of other EU countries and cut VAT in the construction and tourism sectors to five per cent for a year to help give the economy a real boost.

In addition, a NICs holiday would also offset increasing cost pressures on firms. More than three quarters of the firms surveyed said that their costs had increased in the quarter, mainly due to rising commodity prices as more than half of respondents (57 per cent) cite rising energy costs, and 49 per cent increase in the cost of raw materials as the reason.

John Walker, national chairman, Federation of Small Businesses, said:

“As businesses come to terms with the double whammy of falling revenues and rising costs, it is no wonder that they’re losing confidence, and unfortunately, as their overheads increase one way to control it is to lay off staff.

“It is the first time since we started the Index that we have seen more people believe that they’re going to lay off staff than take them on. This has to show the Government that a more robust plan for growth is needed.

“Moreover, this is the first time that we have seen confidence in all regions of the UK in negative territory. We urge the Chancellor to look closely at our NICs holiday proposals and bring this forward in his Autumn Statement. We fear that without it, the recovery will falter once more.”

After rising over the previous six months, overall tenant demand retreated in Q3, moving into negative territory for the first time in a year. In addition, demand in London’s commercial property market, which had looked much stronger, failed to increase. Surveyors attribute this to the uncertain outlook for the wider economy which is impacting negatively on demand.

As tenant demand fell back, available space continued to rise, with 15 per cent more surveyors reporting available space rose rather than fell over the last three months. Available space picked up fastest in the retail sector, with a net balance of 30 per cent. The retail sector also saw the largest drop in demand for space.

Inducements rose over the last three months, as landlords looked to entice tenants into deals. At a net balance of 20 per cent, inducements are now increasing at their fastest pace since Q2 2010 and surveyors note that some landlords are incorporating more flexibility into their leases.

Falling demand and rising availability impacted on rental expectations, which weakened over the quarter, moving deeper into negative territory (-15 per cent). Respondents were least optimistic for office rents, which fell at the fastest pace for two years (-23 per cent); previously, this sector had displayed a greater level of resilience. The one area which continues to show a positive trend for future rents, albeit a flatter one than earlier in the year, is the central London office market.

Meanwhile, demand from investors was weaker across all sectors and regions of the UK except for London, where the balance managed to remain in positive territory, with 27 per cent more surveyors reporting a rise rather than fall in investment demand. One factor continuing to underpin this level of interest in real estate in the capital is the appetite of foreign investors.

Commenting, Simon Rubinsohn, RICS chief economist said: “While the London commercial market is still holding up relatively well, some of the positive momentum appears to have faded in the capital over the last few months – reflecting the wave of negative news flow surrounding both the prospects for the UK economy and the sovereign debt crisis in Europe. Confidence is clearly critical for the whole of the real estate sector and in the near term there is little reason to believe that it is likely to improve. Against this background, any recovery in rents is likely to prove elusive and capital values away from London look set to remain under pressure.”

With thousands of customers in the UK, the company attributes rising demand for virtual offices to home-based and small businesses looking for workspace support that is low cost, low risk, and can dramatically increase productivity.

Virtual office services include a business address to use on company stationery, dedicated local phone number and receptionist to answer calls, mail collection and handling, and access to private offices or meeting rooms.

Huw Williams, proprietor of Belfast-based Powerline Compensation Ltd sees clear benefits from having a virtual office: “Using a Regus virtual office gives me a prestigious, city centre business address, without the inconvenience of setting up an office there. I can work on the move, wherever I need to be, or take the day off, secure that someone will answer the phone and take mail deliveries.”

Celia Donne, regional director, Regus added: “With the economy still weak, small businesses are acutely aware of the need to control spending. Virtual offices offer home businesses, start-ups and companies entering the UK market the benefits of a staffed office – such as a professional business address, and a professional receptionist to answer the phone – without the expense, risk and management time of setting up a physical presence.”

With this in mind, Make It Cheaper has teamed up with the Cebr to map the cost burden on small firms, identifying the most and least expensive regions to do business and tracking business start up rates throughout the country.

The findings, based on the SME Business Cost Index, reveal that the UK’s entrepreneurial hotspots do not necessarily correspond with regions of lowest cost, and show the national business birth rate in decline over recent years.

Jonathan Elliott, managing director of Make It Cheaper, comments: “Small business owners have fought tooth and nail through recession – cutting costs where they can and even raiding personal finances – to try to stay afloat.

“It is a sign of the significant costs pressures SMEs are under that relocation is on the table for many.”

The study is based on independent research among owners and managing directors of 750 UK small businesses commissioned by business saving advisor Make It Cheaper, supported by macroeconomic modeling by Cebr.

Wales is the cheapest place to run a small business in mainland UK, while London is far and away the most expensive, according to the SME Business Cost Index:

Wales was found to have business costs 4 per cent lower than the national average, followed closely by the North East (3.8 per cent lower) and then Yorkshire & The Humber (3.5 per cent lower).

At the other end of the scale, it requires more investment to operate an SME in London than anywhere else in the country with business costs 16 per cent higher than the national average. This is, perhaps, not surprising with labour and commercial rents around 40 per cent higher in the Capital than the UK average.

In contrast, in the North East and Yorkshire & The Humber regions, labour and land costs are around 10 per cent and 15 per cent less than national average respectively.

UK entrepreneurial hotspots

So where in the UK are entrepreneurs heading to set up their new firms?

Despite having the highest business costs in the country, entrepreneurs are still flocking to London to start up while relatively low cost Wales has among the fewest new businesses opening:

The national average business birth rate is 10.2 per cent, which means that around ten new businesses are set-up every year for every hundred that already exist.

According to the research, this has been on a downward trend since 2005, falling from 13.0 per cent to 10.2 per cent between 2005 and 2009. Only the North East and Scotland saw business birth rates increase during the pre-recession period (2005 to 2007).

The Capital has the highest business birth rate at 12.6 per cent, followed by the North East and Yorkshire & The Humber at 10.4 per cent and 10.2 per cent respectively.

Meanwhile, Wales suffers from among the lowest entrepreneurial activity across the UK, with a business birth rate of just 9.1 per cent.

Jonathan Elliott commented: “SMEs considering relocation must take into account the significant disturbance to the business of such a major step, and decide whether it is really worth the trouble.

“Business owners must ensure they have exhausted every avenue of cost reduction, particularly large fixed costs such as energy and insurance, before even thinking about moving.”

All the southern regions see an average vacancy at or below 11 per cent while the Midlands and North range from just under 13 per cent in the East Midlands to 16 per cent in the North West.

The top ten worst-performing large centres are in the West Midlands and the North while seven out of the top 10 best large centres are in the South.

Amongst the medium sized centres the situation is the same with the top ten centres all in London and the South while eight out of the ten worst-performing centres are in the North. The only exceptions are Dartford with a vacancy rate of 26.3 per cent and Newport in South Wales with 26 per cent. The best performing medium-sized centres run from Sevenoaks with a vacancy rate below five per cent to Falmouth at 6.6 per cent

As far as the smaller centres covered are concerned, the best performers are again mainly in London and the South East. At first glance the top 10 worst performing small centres looks different with Margate (36 per cent vacancy) and Wandsworth (31 per cent) at the top of the table. However further down the list the picture becomes more familiar with the likes of Runcorn, Corby and Bootle all seeing poor vacancy rates.

There is increasing evidence that the retailer pain is not spread evenly between the high street and the shopping centre. The latest results from several of the big, retail-owning property companies show their revenues have been surviving any tenant difficulties with ease. Solid rental growth, footfall and occupancy levels demonstrate that prime properties are taking market share away from other locations.

Matthew Hopkinson, director at the Local Data Company commented:

“This report shows how fragile the British High Street is in parts of the country. The pressures it faces are increasing and therefore one needs to be realistic in one’s approach to each and everyone of these towns if they are all to have a future. The stark reality is that Great Britain has too many shops in the wrong locations and of the wrong size. The diversity of shop vacancy rates is clear evidence that a local approach is required that ties in with consumer needs and the realities of modern retailing. The market still has significant corrections ahead and the impact of these will vary significantly according to location.”

Liz Peace, chief executive of the British Property Federation, said:

“Many of high streets and town centres are in a critical, but stable condition. Their recovery is not just going to happen, but will need nursing. It will require investment from our sector, and the confidence that goes with a local authority that has leadership, a clear vision, and a willingness to plan and manage their retail environment. We must also accept that some secondary retail units are no longer viable and plan their transition to other uses. Simply hurting successful retailing to level the playing field is not the solution. We must find new ways to get people on to our high streets and in our local shops.”