Spare room is hub of global network
Financial Times - 4th March, 2006
Jonathan Moules visits a translation company with clients and employees in many continents and its head office in a two-bedroom flat.
Like many successful entrepreneurs, Christian Arno started his business in a spare room. His translation company Lingo 24 now turns over £1.5m, making £120,000 profit last year, and employs 40 staff in China, New Zealand and Romania. But unlike other ambitious businessmen, Mr Arno has no intention of moving his headquarters from the upstairs of his two-bedroom house in Deptford.
"It is quite nice here, particularly by Deptford standards," Mr Arno says, as he tries to convince me that the small room in the home he shares with his girlfriend is preferable to the kind of plush premises his competitors rent in central London. "There is a quality of life argument to this way of working," he adds. "I can roll out of bed, have my breakfast and start up."
The absence of an office has proved no barrier to growth for Lingo, whose clients include BP, Honda, Ikea, Orange and Traveler and can be found as far afield as Israel, Japan and Switzerland. Although Mr Arno is based in London, he registered the company near his parents' home in Aberdeenshire, which led to a number of introductions to large companies involved in the local oil industry, such as the Wood Group and Varco.
The advantages of not being tied to an office go much further than the two-minute commute, Mr Arno adds. Spending money on office space gives a bad return on investment, particularly for a small business where money is tight, he notes. Removing such overheads helps Lingo offer prices up to 30 per cent cheaper than its larger competitors.
Given that all the day-today information about the company can be stored on a laptop, Mr Arno can literally take his office with him. Rather than travelling to a physical space, employees log on to the company's central database, where all the information about translation projects is stored. "It is the central repository for everything," Mr Arno says. "It is a bit more extensive than most company databases. It includes a lot of information to help people because they don't have John at the desk next door to ask when they have a problem."
Home working is also attractive to the kind of skilled professionals Lingo needs to maintain high levels of quality demanded by clients. Some of the company's best recruits were found in the most remote locations, such as small Romanian villages, Mr Arno notes.
The first translators Lingo employed in the UK were all middle-aged mothers, living in various parts of Scotland, who liked the security of a salaried post but the flexibility to fit their work around collecting the kids from school. "If I had wanted these colleagues to come into an office I might have lost them," Mr Arno says.
Being rootless also liberated Mr Arno to look all over the world for his staff. At the end of 2003 he flew out to New Zealand and spent five months recruiting a manager and two linguists specialising in French and German. He then spent three weeks in Beijing and Shanghai, recruiting another two translators. This enabled the company to offer a round-the-clock service with clients in London able to drop off documents at the end of their working day and receive the finished items first thing the next morning. Mr Arno is particularly proud of the team he hired in Romania last year. He notes that eCode, an offshoring consultancy, ranks the country as the most multilingual nation in Europe after the Netherlands.
Home working was not always an easy concept to sell to staff in countries that have yet to reach a critical mass of high-speed internet connections, Mr Arno admits. "When we first went to Romania, it was a bit unusual to have people working from home." New recruits were forced to travel to colleagues' houses to get access to a fast connection, although Mr Arno stresses that the Romanian infrastructure has improved dramatically in just a few months.
The biggest potential drawback of not having an office space is the lack of interaction between employees. Skype, email and the company's intranet are used for day-to-day communication and enable Lingo to maintain editorial oversight as each piece is translated to ensure the quality of the work. However, regular face-to-face meetings are also vital, Mr Arno notes. Every month, for instance, the UK workforce has a get-together in Oxfordshire. Although these are meant to be a "a meal, a drink and a laugh", according to Mr Arno, they are also needed for effective management. "There is no substitute for sitting down with someone," he says. "Things will come up that you will not have mentioned on an email or Skype. Personally I know I am much better with people when I am face to face with them. With email and Skype, you can be a bit short or miscommunicate your intentions."
As good as Deptford gets, Mr Arno is likely to be spending increasing amounts of time outside his spare room to expand his business further.
Ask The Experts Working At Home
One of the unfulfilled prophecies of the dotcom bubble years was the claim that large numbers of employees would be working exclusively from their homes before the turn of the century. The consensus is that the technology is now available, with high-speed internet connections, to make home working a realistic proposition for most businesses. But cultural and behavioural barriers prevent widespread adoption.
The Chartered Institute of Personnel and Development found that 55 per cent of companies allow at least some staff to work from home on a regular basis. But only 7 per cent offered this arrangement to all staff. Imogen Haslam, a CIPD adviser, says: "Most companies opt for more flexible working so their employees can work at home in the run up to a big deadline, for instance. But they do not work from home permanently."
There are strong psychological urges that make people reluctant to give up their desk for the independence of operating from their spare room, Ms Haslam adds. "Keeping a barrier between your work and home can be a problem. People often miss the social aspect of work." Telewest Business last year ran an experiment where it provided a number of managers with broadband connections and the technology to work from home for two days. It found work was completed in a shorter time, largely because the managers were not distracted by the business of office life. There was also a personal benefit in that those gained the hours they would have spent commuting to spend with family.
What might be good for a few employees within a large company is more difficult to replicate for an entire business, especially if it has a number of staff. About 60 per cent of new businesses start in the home, according to Emma Jones, managing director of consultancy Redbrick Enterprises, which advises clients on home working. Although most of these are sole traders, providing services such as consultancy and web design. However, there are some small-scale manufacturers, producing items such as cosmetics, which are operating entirely from people's homes, according to Ms Jones. "It takes a certain kind of person who feels comfortable with working from home," Ms Jones admits. "However, lots of women are using it to get a better work-life blend."
Working from home is popular in the translation industry, where thousands of translators operate as freelancers. It has also made it a highly competitive market, according to Geoffrey Bowden, general secretary of the Association of Translation Companies. "It is not an easy market because people can set up as translators in their homes. When you have a large supply like this prices often get depressed."