If the economic downturn of the last few years has taught anything to business owners it is to stay flexible and nimble. This applies to large corporations, but it has been even more critical for small business owners. After all, small businesses are working on a shoestring budget and do not have much room for error. I discussed the actions small business owners can take to become flexible in earlier post. I also showed a framework that can help you reduce costs in a systematic fashion. It involves looking at various costs and eliminate, rent, share and optimize them in that order.
For small business owners one of the biggest costs and impediments to being flexible is the real estate expense – either owned or leased. Lately, some entrepreneurs have come up with novel approach to help you reduce this cost, while still letting you keep the appearance of having full service office. Let’s look at how it works and what you can gain from it.
For most small business owners real estate expense is largely fixed and signed for number of years. While having a full service office does have its benefits it comes at a price, sometimes very steep. You not only have to spend upfront to get it ready for operation, but also have to spend money on regular maintenance, not to mention the unexpected cost you may get hit with if something breaks down. If you have to downsize and do not have a need for the entire office you will still have to pay full price for unused capacity. Even when you lease real estate as opposed to owning it you are locked in for at least several years and responsible for payment even if you have to close down your business.
This is why you should look into “owning” a virtual office. The concept of virtual office can take many different forms. The Post Offices have been renting mailboxes for a long time. You can consider it as one of the earliest and simplest forms of virtual office. The newer approaches have taken this concept much further. They not only provide fully equipped physical space, but also give you IT and telecom infrastructure you might need. You can even have your dedicated receptionist who can represent your business in a professional manner. Some of them also rent meeting rooms on as needed basis.
These virtual offices provide numerous benefits when compared to owning or leasing real estate.
- You don’t spend any upfront cost to prepare the building for business. This is a huge savings for those who are just starting out.
- There is no ongoing building maintenance cost. After all you don’t own the building, remember?
- You are not responsible for any unexpected expenditure resulting from breakdowns.
- You pay only for the space being used. There is no unused, wasted capacity.
- You don’t have to sign long-term lease commitments. When you don’t have a need for an office stop paying for it.
- Finally and most importantly, you are still able to present your business to clients in a professional manner.
Have you utilized virtual offices for your small business? How has been your experience?