What is a virtual office?

by Liam Martin
what is virtual office

Wondering what a virtual office is?

If you don’t want to invest in a brick-and-mortar space for your business but still need an address, you have two options: a P.O. Box or a virtual office.

While a P.O. Box is the least expensive option, it doesn’t offer other benefits that a virtual office provides — like a meeting room, receptionist, etc.

With more people shifting from conventional offices to more flexible workplaces, virtual office companies have given rise to a new work culture. You can now work from the luxury of your home or even convert your study room into a luxurious day office! 

So what is a virtual office, and why should you consider having your company based out of one?

In this article, we’ll cover everything you need to know about a virtual office, including its pros and cons. We will also give you a detailed guide for setting up an amazing digital office.

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Let’s dive in.

What is a virtual office?

A virtual office provides different office-related services and technologies to people working from remote locations. 

It allows organizations to create and establish their presence at their preferred location without paying a huge rent for that physical office space.

Some virtual office providers also offer other office services, such as a private mailbox, virtual receptionist, etc.

The concept of virtual office has its roots in the ‘Executive Suite’ era. An executive suite refers to a set of individual smaller offices that have been sublet from a larger suite of offices.

As these suites started becoming impractical for certain businesses, it paved the way for the virtual office solution. 

How does a virtual office work?

A virtual office essentially works as a single unit for all your business needs but is not restricted to one specific location. 

With a virtual office, your remote team can work from anywhere but still have access to physical office facilities, such as:

  • Corporate mailing address.
  • Conference room.
  • Professional video conferencing tools, and more.

Additionally, thanks to the IT boom, there is now no shortage of web-based productivity and monitoring software – enabling virtual offices to gain popularity with large and small businesses, as well as with freelancers.

Which facilities are available in a virtual office?

Some facilities provided in the virtual office package may include:

  • A professional business address: having a physical address will make your remote business seem more impressive and save you from giving out your personal home address. 
  • A meeting room: allows you to conduct meetings at an exclusive meeting space without costing you a fortune.
  • A dedicated receptionist: a receptionist will help you add a human element to the meetings held at your virtual office address.
  • Mail opening and scanning service: helps you with mail forwarding so that you’ll be up to date with the mail you receive at your virtual office.
  • Voicemail and telephone answering service: helps you manage your incoming calls without giving out your personal number.

These are just some services that may be available, and it’s best to check with each virtual office provider beforehand. Some basic providers may not include all these facilities, while others may offer advanced services.

What are the pros and cons of a virtual office?

Starting a virtual office isn’t always that easy! 

While it does have it’s advantages, you’ll have to deal with a few trade-offs as well.

A. Pros

Here’s how a virtual office can give your business a much-needed boost:

1. Reduced costs

Want to know how a virtual office can save up on costs? 

Let’s take a look:

  • The monthly cost is significantly lower as compared to a physical office.
  • You can choose which service you require and pay the charges accordingly.
  • You can hire independent contractors and reduce employee costs like insurance and taxes.
  • A virtual office doesn’t have a high maintenance cost or need any administrative staff.

2. Increased productivity

Here’s how a virtual office space can enhance productivity: 

  • Hassles of commuting are reduced, which gives employees more time to work in a day. 
  • Remote workers can work when they feel they are most productive.
  • The work environment is relaxed and stress-free compared to a traditional office space, which can boost productivity. 
Productive when working from home

3. Global presence

Here’s how a virtual office service can help you expand your business:

  • Virtual offices offer month-to-month leasing, which allows you to change your location without waiting for the contract to end.
  • You can employ people from anywhere in the world since there are no restrictions on location.

B. Cons

Here a few downsides of working from a virtual office:

  • Time allocated for using the services may be limited as they may not be available at night or on weekends.
  • Working from home might be difficult due to distractions.
  • It might be challenging to bond with your team members.
  • There’s a scope for miscommunication due to remote work.

Of course, you can always find solutions to these drawbacks if you’re really intent on having a virtual office.

For example, to connect with your team, you can schedule fun Zoom happy hour sessions with them.  

And if you want to boost productivity, you can set up a remote work policy or use a productivity management software like Time Doctor.

After weighing the pros and cons of a virtual office, the next step will be to understand how to set it up. 

Step-by-step guide for setting up a virtual office 

As we’ve mentioned earlier, a virtual office helps you cut down your overheads while still expanding your business.

But to function efficiently, you need to set up an efficient virtual office plan

Here’s a step-by-step guide for setting up a virtual office:

Step 1: Form a business plan

Even if you don’t plan to have a traditional office, you should certainly spend time creating a good business plan

Formulating your strategy will help you underline your goals and expectations and analyze all the resources needed for your business.

Typically, your business plan should cover:

  • Executive summary: brief explanation of all elements like company details, market analysis, etc.
  • Market analysis of the industry: consumer demographics, barriers to entry, etc.
  • Analysis of the competition: define who your competition is, their strengths and weaknesses, etc.
  • Organization and management details: knowledge, skills, and abilities of your remote team.
  • Marketing and sales methods: details about business opportunities, customer purchase power, etc.
  • Operations strategy: details about daily work activities, break-even point, source of supplies, etc. 
  • Financial requirement and projections: how much money you need, how you will use the funds, expert opinions on growth assumptions, etc.
  • Attachments: valuable documents such as resumes, the intent of purchase, etc.

A well thought out plan will make it easy for you to clearly understand your business needs and ensure a smooth workflow, even in a virtual office.

Step 2: Decide your office space

There are many options to choose from while deciding your workplace. 

Apart from setting up a home office, you can choose to get a coworking membership or work from a serviced office space. 

You need to pay a monthly fee for using this workspace. Once you get the membership, you can avail various facilities like a conference room, telephone answering service, and even a printing service in exchange.

You should decide where you want to establish your base, depending on the type of your business, the size of your remote team, and your budget. There are various virtual office companies in the United States that provide different options according to your needs.

Step 3: Get your business address

Having a physical office address for your business is necessary to register your business. 

Your virtual business address will be used to send mail to the location of your choice, even if you don’t actually work from there. You can even invest in a virtual mailbox, which will scan your mail and send its digital copy to you via email. 

Step 4: Complete all legal formalities

Legal formalities

Depending on your office location, you need to ensure that you comply with all the local rules and regulations. This is all the more important if you choose to set up a home office. 

You can contact your local authorities to find out if you need any permissions or licenses for setting up your office or if there are any restrictions for doing so.

Legal formalities also include deciding your business entity – LLC, C Corp, or S Corp. This is necessary for taxation and other liabilities. 

Step 5: Ensure the availability of all tools

To ensure a smooth workflow, you need to have an armory of various hardware and software tools as a part of your virtual office package. 

Some of these include:

  • Hardware: printer, scanner, removable media storage, modem, etc.
  • Virtual business communication tools: Zoom for video conferencing, Skype for instant messaging, a virtual mailbox for mail forwarding and scanning, etc.
  • Project management tools: Trello, Asana, etc.
  • Productivity management tools: Time Doctor, Zapier, etc.
  • Cloud storage tools: Dropbox, IDrive, etc.
  • Other equipment: surge protector, caller ID, furniture, etc.
  • Internet connection: high-speed broadband connection.

Here is our list of the best virtual office software for 2021.

Step 6: Hire a virtual assistant

A virtual assistant can do all the tasks that an assistant does in a traditional office (except getting your coffee!) and will be a great asset for planning and managing your daily activities.

Some VAs specialize in certain tasks such as editing content, while others will help you with only administrative tasks such as scheduling meetings, ordering supplies, phone answering, etc.

If you’re a small business owner or are just starting out, a VA can help you with these tasks so you can effectively focus on your area of expertise.

Read more about why you should hire a virtual assistant for your business.

Step 7: Establish virtual office policies

When you have a virtual office, it might become difficult to ensure that every employee has the same amount of dedication and work-capability. 

To set standards in your office space and have a compatible workflow in your office, you should consider establishing certain ‘virtual office policies.’ 

Some of these may include:

  • Home Office Equipment Policy: define the minimum configuration of work computers and other equipment needed in the virtual office.
  • Cell Phone Policy: set rules and limits for the use of cell phones and other mobile devices during office hours. 
  • Client Interaction Protocols: establish set protocols for interacting with clients, whether in person, through email, or other traditional communication methods.
  • Time and Attendance Monitoring Policies: track attendance in real-time by setting guidelines for clock-in and out, leaves and holidays, etc.

These are just a few examples. You can devise your own policies depending on your business needs. 

Additionally, make sure you have periodic meetings with your employees regarding these policies. This way, they can also provide inputs and suggestions for improving the work environment.

5 smart tips for working from a virtual office

While working from a virtual office, you’ll encounter numerous challenges every day, which may hamper your productivity or even make you seem unprofessional.

But don’t worry!

These five tips can help you work efficiently from your virtual office:

1. Set a fixed schedule

One drawback of working from a virtual office is that you may get tempted to complete that tiny pending task at night or over the weekend. 

But sometimes, it doesn’t stop there; there’s always one more email to be responded to, one urgent call to be made, and the list goes on!

A fixed schedule will allow you to keep your work and personal life distinct. 

This not only gives you more time for your family, but it also refreshes your mind – so you can focus better at work.

2. Be available during office hours

Since people don’t meet you in person every day, make sure that you’re virtually available during your office hours. Even if you have team members from different time zones, set some common hours during which everyone should be available. 

This will enable team members to approach you with their concerns and sort out problems like they would in a physical office. 

3. Always be punctual

When you’re not working from a physical location, you must remain punctual at all times. Be it a meeting, sending an email, submitting a project, etc. 

Being on time lets others know that you’re taking your work seriously and that they can always rely on you.

4. Use the office landline number

Avoid the temptation of giving your personal cell phone number to your clients and coworkers.

Having a local phone number will make you seem professional and provide you with other features like voicemail, call recording, etc. 

5. Create boundaries for family/friends

When you don’t ‘go’ to work, your family may forget that you need to focus completely on work.

They might feel tempted to share something they saw on the news, ask you a question, or ask you for some help. 

However, set clear boundaries and let them know that certain hours or a particular space in your home is strictly for work. 

Wrapping up

A virtual office may seem challenging to set up, but it certainly offers several advantages. 

If your company is a startup, or you want to analyze your options before you delve into a traditional private office, a virtual office is an excellent place to start.
And if your business allows remote work, then you can permanently settle down in a virtual office!

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