This is an interesting subject especially when you look at some norms. One of the norms is that a business must have a physical office to be deemed legitimate. It is not a good image for a business if it does not have physical offices. Whilst for the most part it is a genuine concern when a business does not have a physical office, it is not always black and white. The digital age we are in means some things no longer always hold – virtual offices are on the rise.
Some Clarifications
The definition of a physical office is crystal clear. It is the virtual office that I want to clarify a bit on. A virtual office can be in two broad ways. One, it can be completely online with no particular physical location that is operated from that is deemed an office. Two, it can be an actual location but that is not open to the public per se. For instance, a business can rent out a room or working space somewhere that they can use from time to time. They will not be using it full-time but just occasionally.
Cost Considerations
This is obviously the first thing to explore. Running a business is all about profitability – which relies heavily on keeping operating costs at bay. With that said it is apparent why a virtual office would be cheaper than a physical one. The costs associated with having a physical office are so many e.g. rentals, licensing, security, cleaning, and insurance, just to mention a few. Though the sophistication of a virtual office, in some cases, can mean steep costs, it is rare. The likelihood is always high that a virtual office will be cheaper than a physical one.
Consumer Perceptions
There is a perception issue when it comes to physical offices or virtual offices. When a business does not have a physical office people tend to think that it is not authentic. This perception is so prevalent in so many parts of the world – here in Zimbabwe is a perfect example. Given that background not having a physical office might mean people never get to take you seriously. If that is a big deal in your area of operation you might have to invest in getting a physical office.
However, people are gradually warming up to things being done virtually. Having a website and being on some popular social media sites can now count for or substitute having a physical office. All in all, your decision to have a physical office or a virtual one might be exclusively informed by public perceptions.
Business Stage
Where your business weighs in on whether you should have a physical office or not. We have already talked about cost considerations which are of utmost importance to entrepreneurs. When a business is still in its infancy physical offices might not be necessary. It will basically be an unnecessary cost especially when you are working towards limiting operating costs. This is closely tied to human resources too – as in, early on there might be no need to hire employees. I have mentioned when it is early on in business but overall, a business might never get to need physical offices for quite a stretch. From the onset, a business can operate using a virtual office and that can go on for the long haul. Both can be run concurrently but early on in the business, the virtual option takes precedence.
Mobility And Round-The-Clock Operation
This is one of the reasons why some entrepreneurs would prefer virtual offices. Physical offices are inflexible – imagine the norm of an office being open say, from 8 am to 4 pm. This means work is confined to that office and those operating hours. With a virtual office, work can be done virtually anytime and from anywhere. For instance, once a physical office closes for the weekend employees have to wait till Monday. Yet with virtual office work can be done anytime despite what day it is and what time it is.
Environmental Sustainability
Then we have an issue of sustainability. People the world over are now so big on businesses being run in such a way that does not harm the environment. In some countries, consumers would rather buy products made in such a way or from businesses that operate in such a way that does not harm the environment. I can do a lengthy write-up on how running a physical office has harmful effects on the environment. For instance, most office supplies directly or indirectly harm the environment either in how they are made or how they are disposed of. This is just one of the many examples. Bottom line is if you are to easily attain status as an environmentally friendly business having a virtual office is an easy route. That status can still be attained whilst running a physical office but more time and resources will be needed.
These are some of the things to consider when comparing a physical office and a virtual one. As digitization continues to surge we are most likely going to see more and more virtual offices. Given how less costly it is entrepreneurs to have a virtual office more and more people will definitely take that route. It is not a black and white issue per se – it is important to look at contexts as they are. In short, either of the two might be the best cut; it varies with the context and circumstances at play.
