What is a 'Virtual Office'

A virtual office gives businesses a physical address and office-related services without the overhead of a long lease and administrative staff. With a virtual office, employees can work from anywhere but still utilize a mailing address, phone answering and messaging services, meeting rooms, video conferencing and more at a lower cost and with greater flexibility.

Breaking Down 'Virtual Office'

Virtual offices are especially popular with startups and small businesses. The creation of web-based office productivity software and services, such as video conferencing, has enabled the practice. A virtual office also can lead to greater productivity, as its services free workers from administrative tasks, as well as commutes. Each employee can work from the location that is most convenient, and the business is not restricted to hiring employees who live locally. The virtual office arrangement thus expands job options for employees and hiring options for businesses.

Virtual Office Pros

The appeal of a virtual office to users is twofold: First, the monthly cost of a virtual office is far less than that of a traditional office. After all, it has none of the maintenance and upkeep costs, nor does it need to be staffed. A virtual office can also be secured via month-to-month lease, so there is greater flexibility if a user's business changes (no waiting for a lease to expire or incurring the cost of a broken lease). Costs for using a virtual office can run as low as $50 for a membership fee and $250 per month for a month-to-month lease for basic services. The more services that are added on, the more expensive it will be.

Secondly, a virtual office can provide a mailing address, telephone answering and video conferencing services, and therefore a small business can appear larger than it is. It also can provide a physical address (or multiple addresses) for users to meet clients. Sometimes, the address can lend an aura of prestige to a virtual office user, such as if it is a well known location or street. A professional phone answering service can have the same effect.

Virtual Office Cons

Some of the services a virtual office arrangement offers require some pre-planning to utilize. For example, many packages come with limited use of conference rooms or limited teleconferencing and video conferencing services. Virtual offices also may have restricted access on nights and weekends. Users may find the lack of flexibility limiting and inconvenient. There is also the potential for distractions that come with working from home.

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