What Is A Virtual Office?

For a growing number of start ups, virtual office services have much appeal. Paul Clapham looks at the advantages and disadvantages

Who needs an office? Many of the biggest corporations started life in a back bedroom or shed and grew very successfully there. Equally, many small business owners decided to start on their own when they were working for an employer from home, seeing an office at most once a week. With a car, laptop and mobile phone they were a business unit - a virtual business.

A rising generation of businesses operate this way. All the staff are of the laptop and mobile generation. They don’t want or need a desk. But they remain few in number and tend to remain small. So given that the technology that enables this business structure has been around for decades and is advancing daily, why does an office matter?

### Perception ###

The quick answer is: the corporate world. If you are selling business-to-business, 99 per cent of your customers will be in an office. The perception remains that, unless you have a nameplate on a business address, you are small fry and not worth their time, regardless of your skills and knowledge. A brilliant business proposal that comes from The Larches, Willow Drive still doesn’t cut the mustard.

Of course, you might like the idea of having your own office. But I guarantee that every day you spend away from it will feel like money down the drain. Weekends, Bank Holidays and two weeks’ holiday represent one third of the year and you pay for every one of those unused days, regardless of the many other days when you’re away on business.

So the virtual office has much appeal. Essentially you pay for as much office accommodation and as many services as you need. You are not restricted by location and you can, if you wish, choose some very smart premises.

There are a number of different definitions of a virtual office. It tends to be looked at as just a different way of having premises, but there are many more options. First is a remote receptionist. Your inbound calls are answered by a human being not a machine and, using modern telephony, patched through to you on your home office landline or mobile.

Choose with care. There are lots of suppliers offering this service at highly attractive prices, which invariably means they are not based in the UK. This inevitably leads to language barriers, mistranslation and, overall, an unprofessional image - the precise opposite of what you want.

Similarly, voicemail has been promoted as a low cost solution, but it has the distinct problem that some 75 per cent of callers hang up when they discover they are talking to a machine. Once again, precisely what you don’t want.

But it’s office space that is key to virtual offices. First up, it gives you a prestigious address for your letterhead. More than that, you can have siting in different towns and cities. I would caution wariness. Making your operation look bigger than it is might be attractive to the ambitious small business, but it creates a false impression that will upset clients when they discover the truth - and they will. Personally, I would always tell clients in advance that you are using a virtual office. It’s a professional way to expand a business and they will usually be intrigued and want to visit you.

### Benefits ###

Flexibility is the magic ingredient in virtual offices. You can have the space you need at the time you need it. That could just be an office, a meeting room or both. You also get a high quality of internal amenities, including broadband, photocopier, printer, conference calling and video conferencing.

There are plenty of hidden benefits, too. You pay a total price for the deal you want - there are no nasty add-ons. You spend nothing on building or premises maintenance. There are no insurance costs. You aren’t committed to a long-term deal. You don’t have any associated staff to manage.

Regus is the UK leader in this field, although it also has a big presence overseas - 2,000 locations across 104 countries, with 300 locations in the UK. Its standard deal offers a business address, a dedicated local phone number, plus call and mail handling, while Businessworld Gold membership provides access to Regus’ network of drop-in lounges.

Steve Purdey, UK managing director of Regus, says: “We’ve seen that a lot of small firms and self-employed people are turning to virtual offices as a cheaper more convenient and flexible alternative to leasing a traditional office. In the past, leasing your own office might have been perceived as a badge of success when a company grew, however attitudes and the range of workspace services available to businesses have changed dramatically in recent years.”

I can confirm the latter from experience of contacts who have told me that using virtual offices has become something to boast about. It’s what smart operators do.

Steve continues: “Using a virtual office allows small firms to reap the benefits of a traditional office - such as a professional business address - without the price tag of permanent leased premises. Plus, customers appreciate the geographical flexibility our large network gives them.”

I would add that the quality of premises promised by virtual office suppliers is high, almost certainly higher than most small businesses could afford normally. The small - and not so small - business is usually targeting clients much larger than themselves, so an impressive location matters.

Regus quotes the example of Lucid Communications, a consultancy in Chiswick, west London. It had had its own office space in London. When the recession came along, the company needed to cut costs, so moved to a virtual office. Lucid Communications’ expectation was that it would do it for six months and then go back to having its own office. In practice, the company found it loved the new way of working.

Director Paul Townsend explains: “We’ve moved all our systems into the cloud, so that we can all work effectively, regardless of our location. We typically work from home or from clients’ offices and once a week we meet face to face at the Regus centre in Chiswick.

“It’s a nice blend that works for us. It’s a costeffective model, too. Our annual costs for the virtual office and workspace when we need it are a third of what they were for our old office and we are more productive because the variation makes a refreshing change to commuting to the same place, day in, day out.”

### Sour ###

All of that is upbeat. But nothing is ever perfect. You need to approach this with your eyes wide open, because it may not work for you and your staff. Some people need the stimulus of others around them to work properly. If that describes you or a key staff member, all the other benefits will go sour.

Do all the sums carefully. Reducing the cost of premises by 66 per cent, as above, is beguiling. Would that apply in your individual case? There will be some technology costs to make it work properly. Have your key clients taken on board the benefits of a virtual office or do they see it as a fly-by-night activity?

Talk to people who have spent money on virtual offices and they will often admit they didn’t squeeze every pound out of the opportunity. The aim should be to have serious customers visiting you every time you invest in those temporary premises. If you close the door at the end of the day without a sale or a set of serious follow-ups, what was the point?