[UPDATED] An Essential Guide to Virtual Offices in 2024
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From virtual reality to virtual machines and virtual assistants, it’s likely you will have heard the word ‘Virtual’ being used more and more in recent times. But what does it mean and what is behind the trend of things ‘going virtual’?
Well, in this article we will explore what virtual is and how you can make your business go virtual with a virtual office not forgetting its features and how it works.
What is the meaning of virtual?
In software and computing, being ‘virtual’ commonly refers to something that can be seen or done using a computer or a type of software program. In other words, it is something that can be done via a machine without the need to physically exist, be present, act, talk, or interact with anyone.
For example, think of the world of ‘virtual reality’. A film like The Matrix is a good example of what it means to ‘be virtual’. When Neo enters the Matrix, he enters a virtual world, one that doesn’t physically exist but is made to appear real all thanks to a software or computer program.
Aside from film, recent improvements in computer game and game console technology have now led to the ever-increasingly popular virtual reality gaming which allows gamers to enter and play in a non-existing world, but one that may look and even feel real.
You could, for example, be in the cockpit of an aircraft or shooting down enemies in a warzone without physically being there.
But it’s not only gaming and films however where we can see examples of things going virtual. The same can be true in the world of academia and education. Traditionally, spending several years at university was the only way to gain a degree.
However, virtual learning now allows students to study and gain a university degree without ever stepping foot on campus. Over 30% of students now participate in some form of virtual learning and experts agree this figure is set to increase twofold in years to come.
In business, there is also an increasing trend of things going ‘virtual’. For example, you may have likely heard the terms ‘virtual assistants’ or ‘virtual teams’ being used from time to time. Nowadays, it is becoming increasingly common for businesses to operate with teams of individuals physically located outside the office or place of work which is possible with a virtual office.
What then are virtual offices and how do they play a part in businesses being or going virtual?
What is a virtual office?
In layman’s terms, a virtual office is an address that can be used to register a business. A virtual office can offer a wider range of functions than simply business registration.
For example, it can act as the registered address to which mail is sent and sorted and offer specific marketing advantages.
In short, whether a start-up, small, or large company, a virtual office address can offer the flexibility to work and conduct operations from anywhere in the world while at the same time maintaining a professional public presence in a different location.
What are the features of a virtual office?
One of the main functions of a virtual office is its use of its address. Virtual offices use real physical addresses as their place of business registration. This means that they can be found and are searchable when using Google, Bing, or other similar search engines.
Having a physical address in a certain location could be very beneficial for businesses wishing to promote a professional image to their clients or potential customers. For example, imagine a potential customer searching for a business via Google only to find they are registered and operating from a small house in the countryside.
Contrast this to a well-located address in the city such as Central London.
What are the features of Virtual Offices?
The growth and increasing popularity of a virtual office in recent years have also led to a significant development in the types of services and features being offered by virtual office providers.
While no service provider is the same, most typical features of virtual office service packages are likely to include some of the following:
Professional Address – Use of an individual physical address for company registration. This may be a unique address for a specific business or a ‘shared address’ which is used for the registration of multiple companies.
Mail Forwarding – In-house mail forwarding services to ensure business-related mail is signed for, received, and forwarded to a designated address.
Mail and Document Scan Service – Same-day scanning and emailing of incoming mail and documents to a designated email address or cloud storage service.
VoIP Business Line – Supply of a hosted Voice over Internet Protocol (VoIP) business line for local numbers. Some providers may offer multiple business lines local to different office locations.
Virtual Receptionist – A professionally trained person dedicated to handling your business affairs from incoming customer calls and customer service inquiries. Virtual Receptionist software systems are also available to handle incoming calls using automation.
Virtual Assistants – A professionally trained person to act as an assistant for the business covering general, administrative, and operational tasks. Depending on the extent of administrative support required, this individual may be hired exclusively for the business.
Accountancy Services – Advice and support from a team of trained accountants to deal with issues of company taxation such as HMRC, tax filing, and correspondence with Companies House.
Business Bank Account Introduction – Support and advice regarding opening and managing business and corporate bank accounts. This may be of particular use to Start-up businesses.
Trade Marking Services – Advice and legal support regarding trademark registration and trademark protection.
Director’s Mail Forwarding Services – Mail forwarding services specific to Directors and Executives.
Furthermore, depending on the extent of a business’s requirements, many virtual office service providers now also offer a wide range of service packages to suit different business’s needs.
For example, businesses with minimum requirements or those that are budget conscious may prefer to opt for a minimal service package which includes simply the registration and use of the virtual office address.
In contrast, larger businesses may benefit from a more comprehensive service package covering full administrative support with dedicated personnel. Service features, service packages as well as their corresponding pricing can generally be found on each virtual office service provider’s website.
They are often categorised and named as ‘bronze’, ‘silver’, ‘gold’ or similarly ‘basic’, ‘corporate’, ‘elite’ etc.
Why choose a virtual office for your business?
Low costs and the ability to offer a global presence however are not the only advantages businesses can gain by using a virtual office and virtual address. Here are just a few ways in which businesses can benefit from going virtual.
Privacy
Firstly, for many small businesses and start-ups, virtual offices and virtual addresses offer a level of privacy not available when operating from a home address.
Virtual addresses can allow business owners to avoid unwanted junk mail and unsolicited visits by clients or B2B salespeople which they otherwise would have experienced if having their home address listed and searchable via the internet.
This can also be supported by setting up and communicating from a separate and professional business-related email address.
Professionalism
Secondly, choosing the right address for a virtual office can provide businesses with a professional image and leave a strong impression when prospective clients search or enquire about a business.
This can be important as most virtual addresses are registered at physical addresses and are therefore searchable via Google and other similar search engines. With this in mind, choosing a virtual address for a building that best represents the nature of the business is key.
For example, can you imagine a small graphic design agency serving small local businesses renting office space in one of London’s financial district’s prestigious skyscrapers? Being so may cause doubt and have the opposite effect intended.
It is important therefore to select an address and building which is best suited to the image the business wishes to portray.
Flexibility
One of the key advantages of using a virtual office and virtual address is the flexibility it can offer small and large businesses alike. Firstly, unlike renting a physical office, virtual offices can be set up in just a few minutes.
There is no need to wait for the space to become available nor the need to enter into and negotiate rental agreements and contracts. Secondly, unlike standard rental agreements, virtual office contracts are extremely flexible.
For businesses that undergo significant growth, this means that businesses can exit their contract at any time when they feel the need to move to an actual physical office or hire staff.
On the other hand, businesses can also just as easily exit their contract should their business struggle to take off.
Cost Effectiveness
With regards to cost, virtual offices offer a substantially cheaper alternative to renting a physical office. Where further cost benefits can be made however is in the additional services and support that many virtual offices service providers offer.
For example, many virtual office service providers may include the cost of virtual assistants and receptionists within their price offering which usually results in being cheaper than hiring an assistant and/or receptionist separately.
In addition, many virtual office service providers also provide different levels of accountancy and legal services which can reduce the need to spend on such services elsewhere.
Local Presence
When targeting customers in a certain area or of a certain demographic, having a locally registered address can be a considerable advantage over the competition.
Not only does a local presence present both a professional and accessible image to local clients and businesses but it can be done simply and quickly without the need to open a physical office.
Furthermore, having a local presence in several countries can also help portray the breadth of a business’s activities, promote its international portfolio, and portray to potential clients that they are a leading global business.
Staff Convenience
For businesses that operate via virtual offices, several studies have shown that employees demonstrate higher levels of job satisfaction and are more productive in their work. Employees also have been recorded to have taken fewer sick days and holidays when working virtually or remotely.
Operating via a virtual office also eliminates the need for employees to commute, reducing the number of cars on the road and having a positive effect on the environment.
What are the disadvantages of using a Virtual Office for your business?
The numerous advantages of businesses using Virtual Offices may make it seem the perfect business model for all business owners. However, there are a few downsides that you should be aware of before choosing a virtual office service provider.
Most notably, though some virtual office address providers will specifically provide a unique address per registered business, it is not uncommon for some providers to register multiple businesses against the same address.
While this may make sense practically from the provider’s point of view, it can however lead to multiple issues for the registered businesses in question. By sharing an address, a common issue faced by many businesses can be the effect one company’s reputation can have on another.
This problem is most visible in Google’s search results as well as Google’s ‘My Business’ profiles. When a potential customer searches your company’s address, they unfortunately could be faced with the negative reviews of another.
However, it’s not only bad reviews you should be worried about. Should a company sharing the same address commit any illegal activities, this could lead to the company being blacklisted.
The knock-on effect on your business could be serious with supplier credit applications, business bank loans and credit card applications potentially being rejected. Choosing an address that is unique to your business is therefore a key.
Another downside of using a virtual office could be the potential loss of face and trust with your business’ customers and suppliers. For example, should a customer turn up unannounced at your virtual address, they certainly would be rather disgruntled at being refused entry by the virtual office service provider.
Furthermore, if customers and suppliers realise that you are using a virtual address, they may lose a significant amount of trust in your business as they may feel that without a physical office base, you may be more inclined to disappear and not be traced.
It is for this reason that virtual offices are often appealing to fraudsters as the anonymity they provide and the ease at which they can disappear may allow for illicit activities.
From an administrative standpoint, there can also be a few negatives that businesses may experience on occasion. Firstly, the nature in which mail is processed and forwarded means that the speed of the mail and letter delivery cycle is on average extended by a few days.
While this may be acceptable for most correspondence, it is not ideal if waiting for something urgent. In addition, collecting posts in person could mean a long and inconvenient journey to the virtual office provider’s address.
For example, while a London-based address may sound attractive, regular trips from the Lake District or Newcastle to collect posts are only going to cause additional cost and inconvenience.
How to choose the right Virtual Office Address provider
With the above risks and downsides in mind, both security for your business as well as a fast and effective service should be some of the top considerations when choosing a Virtual Office Address Provider.
But what other factors should be included in your decision? Here are five top tips for helping you choose the right virtual office address provider.
Unique Address Registration
First and foremost, it is important to ensure that the address offered for your company registration is not associated with any other company or business activity.
When choosing a virtual office service provider, it is therefore important that the address that they offer for registration is a unique address available to your business only.
By holding a unique registered address, you can ensure no risk of having your business’ reputation tarnished or worse being blacklisted thanks to other companies.
Reviews and Testimonials
While looking out for your reputation, you should also be sure to check out the reputation, reviews, and testimonials of the virtual office service provider themselves. What do their other clients say about them? Do they offer a good balance of service quality and pricing?
What verification do they require to set up a virtual office? To minimise risk and ensure the best success for your business, you should ensure that your virtual office service provider is not just a reputable company but can live up to their standards and customer service levels.
Service Features and Packages
Depending on the scope and activities of your business, the service features or service packages that providers offer could make all the difference. Do you need a simple mail forwarding service, or do you require a more comprehensive service package with the aid of virtual staff?
Do you have tax-related or legal queries that could benefit from additional support and advice? Before contacting various virtual office service providers, be sure to define your business requirements and goals. In addition, many providers may be able to create a service package bespoke to your business needs so make sure you ask.
Location and Company Image
Remember, one of the key advantages of virtual offices is their ability to portray both a legitimate and professional image of your company. The location of your virtual office should also be high on the list of your considerations alongside service features.
Does the address location correspond to the nature of your business? Does the building of the registered address look professional and presentable? Do you have far to travel if you need to collect mail in person? These questions should all be considered carefully before making your choice of a virtual office location.
Pricing
Finally, how does the pricing of the service features or package you need differ amongst different virtual office address providers? What are the payment terms and how do they compare alongside other alternatives such as coworking spaces, mailbox services, or renting a physical office space?
You should set your budget requirements before discussing service features and service package pricing options to ensure you are getting the best deal, without spending overboard.
Which businesses can use Virtual Offices?
In addition to the growing trend of businesses using virtual offices, there is also an increase in the range of different types of businesses using virtual offices.
However, while a wide range of businesses are making use of virtual offices, their reasons for doing so are likely to differ depending on their business needs. Below are just a few examples of how different business types can use virtual offices to their advantage.
Start-ups
For many Start-up companies, business survival is heavily reliant on cutting costs down. With high demands on capital to source products, manage logistics as well as invest in marketing and sales activities, the prospect of high office rent can be unnerving.
Virtual offices therefore offer a very cost-effective solution for many Start-up companies in their early stages of growth. Not only are they able to reduce their overhead costs by eliminating the need to enter high office rental contracts, but they can do so whilst maintaining a professional appearance for their business.
Small Businesses & Sole Traders
An increasing number of small businesses as well as Sole Traders have also embraced the world of virtual offices for many of the same reasons. The increasingly competitive business landscape means that to compete with the best, minimising costs is also a matter of survival.
With the improvement in collaborative and communication technologies, small businesses with small teams are now increasingly able to move away from traditional brick-and-mortar company setups to work via virtual offices.
For Sole Traders, whilst keeping costs down is also key, the ability to segregate personal and business activities can be especially useful not only for managing business and personal mail and correspondence but also for accurately calculating and managing tax due on self-earned income.
Multinationals
For multinational companies, the ability to attract clients and promote products and services in new markets can be significantly increased by having a local market presence.
As a result, many multinationals are also using virtual offices today to expand their global presence and avoid the need to spend on physical offices and local staff hiring. For example, a London-based law firm that offers legal services to global investors can provide a more localised presence to their international clients by operating several virtual offices in their target markets.
Opening virtual offices and having locally registered addresses in Hong Kong, New York, or Sydney, for example, can help the business become more accessible to prospective clients in these markets.
In addition, virtual offices not only offer an attractive cost-effective option to multinationals, but they also allow businesses wishing to access global markets a legitimate international presence without the need to navigate unfamiliar and sometimes difficult local business practices.
As a result, businesses can focus on their core business practice without worrying about the cost and administrative burden associated with negotiating local rental agreements and navigating local labour laws.
Virtual office alternatives
With a long list of advantages and benefits for virtual offices, it may now be hard to think of what alternative options businesses may have at their disposal. Here, we look at some other alternatives from home address registration, and mailbox services to coworking and physical office rentals.
Home Address Registration
The most common alternative adopted by businesses, particularly Startups and individual entrepreneurs, is to register the business at a home address or the address of a family member.
Remember, while this is a perfectly legal and acceptable alternative, think of the inconvenience business owners or their family members may face by having their home address registered and available to the public.
Mailbox Services
Some companies may choose to use a mailbox service as an alternative solution to a virtual office and this alternative can provide businesses with a permanent street address for receiving inbound company mail.
Depending on the scope of a business’s activities, mailbox services may be a perfectly adequate alternative solution to virtual offices. However, the extent of their service offerings is very limited, and companies are likely to outgrow them quickly should their business needs become more complex.
Coworking
Coworking space can offer another consideration for businesses and the rise of companies such as WeWork, Spaces, and Industrious are all testimony to the popularity of the office and social space-sharing business model.
Coworking can offer businesses the opportunity to rent and make use of well-maintained office space while benefiting from networking efficiencies and a wide range of shared community activities.
The coworking business model has particularly proved useful to IT and technology companies where employees from different companies can socialise, network, share ideas and bring improvements to their wider businesses.
Many now-successful start-ups such as Uber, Ofo, and Spotify were all born in the coworking space.
Renting Office Space
The final alternative to virtual offices is to rent a physical office space. Though this traditional business model of renting or purchasing an office location has been disrupted in recent years, there are still many businesses that swear by this traditional model.
Firstly, depending on the type or activities of a business, using mailbox services or coworking spaces may simply not be suitable. Moreover, whilst all businesses will want to reduce their overheads where possible, renting or purchasing a physical office location could prove to be a lucrative investment in the long term.
For example, businesses that manufacture and distribute physical products are likely to require a physical space to not only store but showcase their products to potential customers.
A professional office space highlighting a company’s activities and achievements is therefore likely to leave a positive impression on visiting company stakeholders.
What is the difference between Virtual Offices and the alternatives?
With several options on the table, deciding the optimal solution for business owners can often be a difficult task and it is important therefore to consider the pros and cons of each business model.
Firstly, for those considering using their own or family member’s address, it will quickly become apparent to customers researching the business that they are an individual working from home and not a seriously competitive business.
In addition, the lack of privacy, unsolicited visitors, and spam mail to home addresses also bring additional frustration. In contrast, a virtual office provides a separate legitimate business address and enhances the business’ professional standing.
For business owners considering a simple mailbox service option, it is important to note how they differ from virtual offices in their location and service scope. Most commonly, mailbox services are often simply a postal box fixed to a wall, sometimes on undesirable properties and locations.
For example, some mailbox services may be located in the basement of a shop or residential building. In contrast, virtual office addresses are usually registered to a physical building which is viewable and searchable by the public.
Additionally, unlike the mail forwarding and mail and document scan services offered by many virtual office service providers, mailbox services in contrast are often very limited and generally rely on mail collection in person.
Coworking spaces have been the success stories of many Start-up companies in recent years, though a few key differences between coworking spaces and virtual offices offer an insight as to why it may not be the best option for all.
For example, while often praised for their modern and functional social spaces to network and collaborate, many coworking spaces lack some of the key functions and service features that businesses require.
Many coworking spaces do allow their tenants to use their address for company registration purposes which is significantly important if you want to promote a professional well-located office location.
Moreover, coworking spaces usually do not provide some of the basic administrative services available with virtual offices such as mail forwarding, and require post to be collected in person.
The rental contracts associated with coworking are also generally very expensive and rental contracts can leave businesses tied in for significant periods.
A similar comparison can be made between virtual offices and renting a traditional physical office space where costs of rent are high and limited flexibility to exit or terminate a rental agreement is likely to make businesses uncompetitive.
While coworking spaces and physical offices can offer some advantages for certain types of businesses, virtual offices in contrast offer a low-cost and flexible rental model which means businesses can leave, should they need to, as and when they please.
What is the future of virtual offices?
A steady growth in the uptake of businesses using virtual offices worldwide suggests they are here to stay. But is this the case for all businesses? And what does the future hold for virtual offices in the long run?
The rise of the ‘gig economy’ has favoured the virtual office phenomenon in recent years. With businesses and services becoming more and more digitised and an increasing demand for flexible work hours by employees, the need for physical office locations are predicted to decrease over time.
Furthermore, recent studies have highlighted increased productivity in company employees who have the flexibility of working from home or remotely, prompting other companies to experiment further. What’s more, without a need to commute to physical offices, the time saved usually on long commutes contributes to a better quality of life and employee satisfaction.
The continued improvement of technologies such as 5G mobile connectivity is also likely to have a continued profound effect on the further development of communication technologies and the ability for businesses to go virtual.
Though IT and technology companies have been participants and users of virtual offices for some time, the ever-improving tools available to collaborate remotely and in real-time means that other industries and professions are now following suit.
While not all industries will ever be able to fully embrace the virtual office business model, many more are likely to convert fully, if not partially, in the coming years to realise operational efficiencies and cost savings.
The increased recognition of the importance of the environment is also creating a movement towards more sustainable and environmentally friendly practices both in business and our personal lives.
As virtual offices offer a greener alternative to conducting business, the role of the virtual office is likely only to be encouraged in the future. Reducing the need for employees to commute reduces the number of cars on the road and increases virtual collaboration across countries and time zones significantly reducing the need for international business travel.
In short, businesses have much to gain by using a virtual office and it is no surprise businesses both large and small are using them to support their growth. Though some industries still require a physical brick-and-mortar presence, virtual offices offer considerable advantages compared to many other alternative business models.
Though they do have their downsides, virtual offices offer low costs and the ability to provide a legitimate and professional business image can be the stepping stone to success for new start-ups while also a doorway to international markets for promising multinationals.
With communication and information technologies continuously evolving and businesses looking for more sustainable business practices, the future of virtual offices looks bright. Now may never be a better time to go virtual.
For any help or inquiries about the virtual office, contact us at info@iconoffices.co.uk.