Many business owners wanting to change their working style will eventually look into how to start a virtual office business. Even though you no longer need a brick & mortar location, you still have to go through a few setup steps.
But what are the differences in the steps? What will you have to do in order to ensure your virtual office starts off on the right foot. Read on to find out the basics on how to set up and provide virtual office services.
Note: If you want to be equipped with all the tools to start a virtual office business, try Bonsai. We offer a business bank account, invoicing, proposals, contract and tax software to track expenses. All one place. Claim your 7-day free trial today.
What Is a Virtual Office?
A virtual office offers the same type of service as a physical office space (i.e., tools, workplace, equipment), but by means of the Internet.
Overall, the services that are often provided by a virtual office rental business include:
- Phone numbers
- Virtual office address
- Meeting rooms
- Virtual receptionist
- Temporary private offices
To put it simply, a virtual office business will provide a team with the necessary systems so that they can work remotely. They also offer the means necessary for you to improve your brand image, so that you may gain more potential clients.
Benefits of a Virtual Office Space
Virtual offices come with various benefits that you may be able to enjoy. This includes, but is not limited to the following:
Low Startup Costs
A virtual office space is quite easy to set up, as you won't need big startup capital. There aren't any long-term leases to worry about, nor are there any rental deposits that you need to remember.
Plus, with a virtual office, there's no need to spend loads of money on furnishings and office equipment. You also save money on daily consumables such as cleaning supplies, stationery, utilities, and so on.
Increased Flexibility
With a virtual office business, the teams and the people running it get much better flexibility. Since you will not be stuck in a physical office, you will have a better work-life balance, mainly because you may organize everything yourself.
Plus, as less time will be spent commuting, one may use that time to either be productive or relax. As everyone will be able to work in an environment of their choosing, they shall also be much more productive.
Easy Setup
Whether you need tax software such as Bonsai Tax, CRM software, or a checking account, it's easy to find most of these services online. This will allow you to get your virtual office space going in no time.
With a physical office, you would have to go through the procedures from one place to another, signing up for the necessary services. However, with virtual office services, it will only take a couple of minutes for you to sign up for them online.
Easy Scalability
Perhaps the best part about a virtual office space is that you can easily scale up your business if that is what you want. When your office space is in a virtual setting, you will no longer look for a bigger property, furnish new spaces or buy new equipment.
All you have to do is to increase your team size and perhaps update some of your subscriptions. You can also expand your business wherever you feel you may want it, as you aren't geographically bound to any office location.
Steps to Set Up a Virtual Office Business
Setting up virtual office businesses requires you to go through some steps. Sometimes, it may depend on the state where you are registering your virtual office service. However, for the most part, here is what you need to do if you wish to be successful.
Understand the Industry
To set up a virtual office, you need to first understand precisely what the industry entails. Owners of virtual offices pertaining to the leasing of serviced offices industry, and the operator will provide virtual tools as well as lease meeting rooms for those requiring the space.
As a result, while the majority of the business is done online, you also need an office facility available. People will be coming to you, so make sure that your location is in a district with a high business profile.
Decide on a Niche
Like every other industry, not every virtual office will be the same. Some will rent or lease workplaces that were fully furnished. Others may lease virtual offices or outsourcing services. Some focus on telecommunications whereas others offer meeting rooms or conference rooms.
Like every small business owner, you need to figure out where your niche is. This way, you will be able to differentiate yourself from your competition so that you may bring the right clients your way.
If you don't select a niche and try to become a Jack-of-all-trades, then you may seem unreliable to teams looking for a virtual office. Here are some businesses to start if you have no ideas. Very often, these teams know what they want, and if they see that you don't have a focus on what they need, they may start looking elsewhere for services.
Create the Business Plan
Once you grasped the business idea, it is time to create a business plan, just like you would with any other small business. While doing so, take a hard look at the needs of your business.
Some things that you may want to add to your business plan include:
- Company description
- Design ideas for the company logo
- Executive summary
- Competitor and industry analysis
- Services that you plan on offering
- Organizational breakdown and management of the structure
- Financial projections and budgets
- Sales and marketing strategy
Once you have a base idea of where you are planning to go with your business, you may be able to determine the staffing for your virtual office space, your resources, and any other needs. Having this plan up front is essential for the success of your virtual office rental business.
Recruit the Employees
Virtual office businesses, unlike your regular startups, will need employees - especially as the business starts gaining speed. Remember, since most of the work is done remotely, you can hire people from pretty much anywhere - so, simply focus on hiring the right people for the job.
Many people are attracted by the idea of working in a virtual office, as it provides more flexibility. However, not everyone is really suited for this kind of work. Look for those that have the ability to focus and prioritize, have excellent communication skills, and have high intrinsic motivation levels.
You should also decide whether you want to hire personnel for payroll, HR, marketing, sales, and so on. If you don't, then you may want to outsource these tasks to a virtual assistant, as they can do most of these tasks. Make sure you thoroughly check the skills of those that you are hiring.
Register Your Business
You may be an online business for the most part, but this does not mean you can skip on the business registration part.
Choose which type of legal entity you want to be (LLC, S-Corp, or C-Corp) and get a business license. You need to provide various pieces of information, such as your name, physical address, and virtual office address.
Make sure that you are also properly registered to the IRS. If you are making a profit from your virtual office rental business, then the IRS will want to know about it. This way, they can tax you accordingly.
Set Up a Phone System
To be a professional business person, you need your clients to be able to contact you. When you have a virtual office space, you may want to set up a virtual phone system.
This includes the main phone number of your virtual office, toll-free numbers, local numbers, call center services, and so on. The advantage here is that nowadays, you do not even need to buy hardware for these tools, as you may simply get a mobile application for your smartphone.
Get a Virtual Business Address
You may be the owner of a virtual business, but you still need a physical address where you can get your mail. You may receive tax papers, bills, letters, and all types of content designated for your business.
Some virtual mailing address companies will receive your mail, scan it, and then send it to your digital mailbox. This mail forwarding is a good option if you are the kind of business owner who is constantly on the road. Plus, all your clients will see is a professional address.
Moreover, you require an office address for your temporary conference room. After all, as a virtual office space, you have to provide a space where your people can meet with their respective clients. Select a business address for that as well.
Get an Email Address and Domain Name
As a virtual company, your online presence is essential to you. As a result, you should make sure that all of your online links are in order. For example, if up until now you've been using a Gmail account, then you should consider switching the email extension to the name of your company. For instance, xyz@companyabc.com.
You also require a domain name and this usually comes with a fee. However, if you are looking for a more professional image, a domain name is essential to the virtual office owner.
Make sure that you choose the extension right. The most popular extensions include:
- .com - The most common extension, usually representing online commercial enterprises.
- .net - Another extension that small businesses use, in the event that ".com" is not available. This extension is short for "network."
- .biz - Fairly common for small businesses that are just starting out
Each domain has its own benefits, so whichever you choose will make you look more professional.
Get the Right Tools
When starting up a virtual office, you need to determine what tools you are going to use in order to kick off your business. Each virtual office arrangement is different, so you must see what pieces of software work best for you.
First things first, you need to set up a system to pay your employees or those that you are outsourcing to. An online invoicing tool such as Bonsai can help you make the payments online, allowing you to save both time and money.
Next, you need to think about a document management system. After all, since you won't be using an office facility with your employees and partners, you must be able to exchange documents somehow. Cloud storage may prove quite useful in this scenario.
Think about setting up a backup and recovery solution as well. There are many options that can help you out - cloud storage included. This way, if something goes wrong with your connection, you won't lose the data.
Last but not least, you should also get a tool that can help you with your virtual office productivity management. After all, your team will be working remotely, so you must make sure that they are keeping to their attendance records and are making actual progress.
Set Up Communication and Collaboration Methods
You may have a virtual business structure, but this does not mean that no one will ever be talking to one another. Employees need to find information Also, lack of communication may cause them to feel isolated and completely out of the loop.
For this reason, as the owner of a virtual office business, you need to set up access to communication methods, as well as collaboration methods. This way, your team can still act like a team, even if they do not share an office.
There are some handy tools that you may use here. For one, you may get instant messaging apps to encourage communication and project management tools where you may lay down the tasks, promoting productivity. Social media, telecommunication services, and video conferencing may also be useful in this regard.
Create the Organizational Culture
When you have a physical business location, it's easy to create an organizational system. However, outside the traditional office, it might be rather difficult to organize yourself. For this reason, a virtual office leader has to create an organizational office for their virtual office team.
First, you should set the working hours of your virtual office. You might think that remote work means no schedule, but without these hours, one of two things can happen: the employee may either work more than they should, or they may procrastinate and skip on their tasks.
Even if your staff lives in a different time zone, your workers should have a certain standard hour set that they will need to follow. Not only will this improve team productivity, but it will also help your people enjoy a proper work-life balance.
Bonsai's business account for Finances
As a virtual office, you have to make a number of payments to the staff and suppliers and receive payments from those using your services. As a result, you need a checking bank account and a cash management system to handle your finances.
Bonsai's business account offers a physical card for those that wish to make such payments from a physical office address. They also offer virtual cards to those who are only using the virtual office. This way, regardless of their location, people should be able to make a payment with their phones or other devices.
The online bank also accepts credit card payments, collect invoice payouts, and tracks your expenses. You can take pictures of your receipts so that every expense is accounted for. If you just started out and you don't have an accountant yet, Bonsai's business account can help you out.
Bonsai's business account has a very useful feature called "envelopes." This allows you to organize your finances with sub-accounts so that you do not accidentally overspend. For example, you may set envelopes for equipment expenses, taxes, payroll, and many more, putting the money there so that you don't tap into it.
Bonsai Tax for Taxes and Accounting
Bonsai Tax is also a tool that can help track your expenses and allows you to keep your peace of mind during tax time. This software enables you to take pictures of your receipts so that you may set the money aside for tax purposes.
The Bonsai Tax software will automatically identify the expenses that are tax-deductible. This will make it easier for you at tax time, as you will no longer miss potential deductible taxes. In fact, the average users saves at least $5,600 from their tax bill.
The tax software will also track your income so that it can provide an estimated quarterly tax. It can automatically connect with your bank account or credit cards, importing and organizing your tax receipts.
Concluding Remarks
A virtual office does not have a physical facility's challenges and overhead costs. In terms of benefits, it is a good choice for those who prefer a remote setup. That being said, you need to be careful how you set it up, especially if you want your business to be successful. Follow our guide, and you should be able to get a good start.
