Startup HQ: Home Office or Virtual Office?

Startup HQ: Home Office or Virtual Office?

Many of you reading this aspire to one day run your own business. Few businesses starting out can afford the thousands per month in rent and overhead that an official office headquarters brings with it. For this reason, running a business out of your home might seem like the perfect way to get your business up and running.

While some startups will do just fine with this strategy, using your home address as the official headquarters for your new startup does come with issues. A virtual office is another alternative to consider, as it separates the business from your home for much less money than you’d spend on a brick-and-mortar office location. A startup can easily be run entirely in a virtual environment, in the comfort of the cloud.

Our friends at Virtualoffice.melbourne shares their thoughts on these options, and which is likely best for your business.

Home office

Home Office HQ

Running a business out of a home office is a great idea for a bootstrapped startup that doesn’t have the budget to rent an office (few do). Whether you own the home outright, or are paying off a twenty-year mortgage, this option isn’t likely to cost you much extra than what you’re already paying in living expenses. Perhaps you’ll buy some new furniture and upgrade your Internet and phone services.

Advantages:

There are several advantages to running a business this way, including savings on office rental and overhead. The fact that you can hop right out of bed in your jammies, jump on the phone or computer, and get right to work is also a bonus. In addition, you don’t have to justify the cost of running a brick-and-mortar office by hiring employees to fill seats. You can also write off a home office and essential business equipment at tax time, which is always a good thing.

This is a great option if you’re manufacturing niche products out of your home, or running a small service-based business such as a cleaning company, clothing alterations, electronics repair, etc. However, if a highly polished and professional image is a must for getting customers, citing your home as an office can make you look like you’re broke or just plain not great at what you do.

Disadvantages:

Don’t forget that people can search your address on the Internet, and even visit your “office” anytime they like. This creates other issues if you do any sort of business that might result in the occasional angry customer, or unscrupulous competitor.

Consider the consequences of anyone and their brother being able to quickly find out where you live, knock on your door, or exact vengeance for a business deal gone bad. Such situations happen more than you might think, so it’s really important to weigh out the pros and cons first, before deciding to launch a startup out of your home.

Virtual Headquarters

Virtual Office HQ

A virtual office is basically a real world, brick-and-mortar office that you rent when you don’t need a place to hang your business hat every day of the week. They’re referred to as virtual because they’re largely offered as an official business address you can use to register with the government and list on your business and promotional materials. Several providers offer limited (occasional) access to the office and its amenities when you need them, but you basically never have to visit.

Advantages:

Using a virtual office, you can run your business from anywhere in the world you like. If the nature of your startup is largely digital and you perform work for online clients, you can live in London and hold an office in Dubai if you wish. Clients never need to know where you live, and you can hold meetings at your virtual office as needed, using modern office equipment, WiFi, and conference rooms.

A receptionist is always on duty at your office and available to answer calls, forward those calls to your phone, or take messages as needed. Official business mail can be delivered to your virtual office and often most services will forward the mail to your location at no extra charge. Finally, you rarely have to sign a long term leasing contract, meaning if you no longer require the office, you just cancel the service and move on.

Disadvantages:

There are few disadvantages to running a business through a virtual office. If you’re running a team, a virtual office can be a disadvantage if you need a place to meet with your team on a consistent basis. Virtual offices aren’t set up for tenants that need daily or exclusive access to their facilities. However, if you and your employees don’t require a central place to work together, and instead just need a few minutes together each day, a coffee shop or local restaurant would make more sense as a meeting place. This, opposed to an expensive physical office rental.

Another disadvantage of a virtual office is that you really need to spend as much time researching virtual locations, as you would a brick-and-mortar one. There is little barrier to entry in the virtual office game, and it isn’t unheard-of for a dodgy provider to rent out offices they have no legal claim to. Not to mention, you need to also ensure there are no questionable businesses operating out of the virtual location you end up renting.

Startup office space

Which is right for you?

There’s no way I can give you a definitive answer to this question. If you feel that running your startup out of your basement, garage, or even living room won’t cost you any sales, or create too much of a crossover between your personal and professional life, a home office may do just fine. The truth is that most all startup businesses can benefit from a virtual address just for the legitimacy it adds to your business and its reputation.

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