What is a 'Satellite Operation '

A satellite operation is a small office or branch office in a different location from a company or government agency's main office. Reasons for opening a satellite operation may include reaching an underserved area, expanding market share and lifestyle/quality of life factors for employees. Satellite operations can be used in all kinds of businesses, such as financial advisor and brokers, doctor's offices, Department of Motor Vehicles offices, political offices and corporate offices.

Breaking Down 'Satellite Operation '

Satellite operations are valuable because they can facilitate client interactions, foster more efficient sales and ease the burden of customer service. Many customers may prefer having a local representative they can call on.

A satellite operation may operate with some degree of autonomy but is not a separate legal entity or subsidiary of the parent company. This structure could open up a foreign parent company to tax liability based on the location of the satellite operation, as well as legal liability.

Most satellite operations will typically be led by a branch manager who will report directly to and take orders from a management member of the main office. A satellite operation may constitute a large office space housing several workers or a home office with a single worker and no sign displayed. Satellite offices may be used by agents of a broker dealer working out of their home, but cannot be marketed to the public as the same as an actual office of the broker dealer. Registered representatives of a broker dealer working out of a satellite office must fall under the supervision of a branch office, have the branch office address on their business card, and all emails must go through the branch's email server.

Satellite operations are common in a variety of industries, such as banking (branches), sales and retail operations. The thousands of Starbucks stores could be considered satellite operations of their Seattle-based parent.

Satellite Operation Considerations

In deciding whether to establish a satellite operation, companies must consider factors such as the cost of renting and furnishing another office, the cost of hiring additional staff to work in that office, and whether existing employees will be burdened by the need to travel to and from the main office to the satellite operation.

When weighing whether to open a satellite operation or branch office the following issues should be considered:

  • Where the office should be located
  • How much rent makes sense given the needs and objectives
  • How the branch office will be laid out
  • How its infrastructure and facilities be managed
  1. Branch Office

    A branch office is the location of a business, which is often ...
  2. Branch Manager

    An executive who is in charge of the branch office of a bank ...
  3. Series 30

    A securities license entitling the holder to become a futures ...
  4. Branch Automation

    Form of banking automation that connects the customer service ...
  5. McFadden Act

    Federal legislation that gave individual states the authority ...
  6. Checks And Balances

    The various procedures set in place to reduce mistakes or improper ...
Related Articles
  1. Investing

    SpaceX's Disaster Could Be Cubesats' Selling Point

    The SpaceX explosion is likely to push a shaken industry to use smaller, cheaper satellites.
  2. Insights

    SpaceX Wants to Launch a Massive Satellite Internet Network (TSLA, GOOGL)

    According to newly filed documents, the California-based company hopes to operate an orbiting digital communications array consisting of 4,425 satellites.
  3. Small Business

    Satellite Wars: Startups Battle for Outer Space

    The quest to dominate outer space is intensifying as investors pump money into satellite startups
  4. Small Business

    Silicon Valley Startups Fly into Space

    Space enthusiasts are in for an exciting time as Silicon Valley startups take on the lucrative but expensive final frontier.
  5. Insights

    Apple Makes Key Hardware Hires for New Initiatives

    The Cupertino company has hired top executives from the satellite industry as well as engineers from NASA's Jet Propulsion Laboratory.
  6. Investing

    Bank of America Tests Automated Branches

    Bank of America offers mortgage, credit card and auto loan service through virtual channels at its new smaller branches.
  7. Managing Wealth

    Top 3 Trends Affecting Private Wealth Management

    Don't miss out on high-net-worth clients because you aren't prepared for their service demands.
  8. Investing

    The 3 Best Vanguard Funds for Value Investors in 2016

    Find out which of Vanguard's value funds are the best for building a solid core-satellite value investing strategy for your portfolio.
  9. Investing

    Bezos' Blue Origin Shows Off Fully Assembled Rocket Engine

    The space exploration company's new rocket engine is ready for testing and already has two customers.
  10. Taxes

    How To Claim Home Office Expenses

    There are many factors to determine what home office deductions can be made towards your small business. Planning ensures high deductions.
  1. How are C-suite officers measured on performance?

    Find out how C-suite officers are evaluated. Learn about the evaluation process, what makes traits a CEO should exhibit and ... Read Answer >>
  2. What is the difference between operating income and operating profit?

    Find out why operating margin and operating income can be treated synonymously with EBIT, but how they all differ from operating ... Read Answer >>
  3. What companies will be hurt the most by Apple's latest product plans?

    Learn why companies such as GoPro, Samsung, Tesla and cable providers stand to lose market share to Apple's latest product ... Read Answer >>
Hot Definitions
  1. Standard Deviation

    A measure of the dispersion of a set of data from its mean, calculated as the square root of the variance. The more spread ...
  2. Entrepreneur

    An Entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture. ...
  3. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  4. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  5. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  6. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
Trading Center