The New England Executive Office Centers reported an increase in requests for virtual office space, such as this facility at 33 Boston Post Road West in Marlborough, operated by Key Executive Offices Inc.
Some industry observers predict that the virtual office phenomenon will add more than 15 million participants worldwide over the next five years. With dramatic technological advances, the definition of what constitutes an office has changed to the point where an office can exist anywhere, even solely in cyberspace. E-mail, improved telecommunications services and Web conferencing have made it less imperative for certain types of businesses to occupy physical space.
The “our business doesn’t need an office” attitude is not appropriate for every business – and probably not even for the majority of them. The brick-and-mortar model is still extremely popular and necessary in the business world.
But it is undeniable that there has been an increased interest in virtual space, particularly in the startup sector where every dollar counts and a traditional office setting may cost more than the initial budget allows.
Executive office centers have taken steps to identify and meet this need with a specific virtual office concept. The region’s leading executive office trade organization, the New England Executive Office Centers, reported a notable increase in requests for virtual office space.
The concept balances a fledgling company’s financial needs with its desire to have a professional business appearance. Simply put, it allows a business to purchase or license services provided by an executive office center without actually renting or leasing physical office space to accompany these services.
For example, assume that you are an attorney, financial planner or commercial real estate broker who has worked for a larger firm for the last decade and have recently decided to go into business for yourself. Beyond the traditional paperwork establishing a business as a corporation or sole proprietorship, there is the matter of where and in what manner you will conduct business. You find yourself suddenly without the support system that you had in the corporate world.
Every dollar counts, particularly in startup mode. It is rare when a fledgling business is sufficiently capitalized to weather the three-to-five-year window it can take to achieve profitability. Beyond the cost of leasing space are the equipment costs (fax, Internet connection, copiers) and administrative support (paying staff who can handle tasks that a business owner may be too busy to manage).
Perception Counts
It may be tempting to save on rental costs and open a home office. For businesses in which the owner runs a solo operation it is possible to function out of a home office for a while. It can be a relaxing and novel way to conduct business. You can conduct a phone interview while wearing slippers, or toss in a load of laundry between drafting legal documents. However, the time will quickly come when business owners are faced with a decision. You don’t want to have to bring clients or prospects into the conference area (which may double as your family’s kitchen) by way of the laundry room. Unless your business plan includes never inviting clients to an office and never hiring any employees, the home office is at best a temporary solution.
Will a commercial broker or financial planner be better because they have a professional presence in an office park as opposed to the end of a residential street? Not necessarily. However, prospective and existing clients will view you differently with a professional address. Perception does count.
A growing number of executive office centers have recognized the value of a virtual office as a first step for fledgling businesses. They assign businesses with mailing addresses at their centers, take telephone calls, install voicemail systems and provide administrative support to the virtual office client. The client may come in and use the copier, fax machine, high-speed Internet and other equipment on an as-needed basis – including use of the facility’s conference room. In short, the client has everything except an actual office.
The NEEOC and its member executive centers have taken this concept a step further and implemented a system through which clients can share conference facilities at multiple locations. If you are a client, virtual or otherwise, in Braintree but have a client appointment in Burlington, you could arrange to use the Burlington facility’s conference space for an hour or several hours under your agreement.
Virtual office agreements are a less-costly alternative to traditional offices, which conservatively start at $500 per month.
Securing traditional office space can be very expensive. Consider that the cost of office construction and furniture alone can be prohibitive and add to that the purchase and maintenance of office equipment (computers, copiers, fax machines, telephone systems, etc.), staff salaries, facility upkeep and a number of other miscellaneous expenses. Astronomical becomes the best word to describe the monetary outlay.
Participation in an office business center provides a home-based entrepreneur with essential resources and offers a sense of business community to an individual. It also provides a safe business environment for meetings with clients and, as perception is significant, a first impression will likely be much more positive if the first handshake is conducted in a professional setting as opposed to a basement office with the washing machine churning.
For the company owner who may require a little more cash flow before making a commitment to an actual office, the virtual office package provides exactly what they need and only when they need it. The virtual office plan is an important first-step for startups who will most likely graduate to physical office space.
