Is a Virtual Office Right for My Business?

Home Offices Are Lonely
••• Photo © roland

The term "virtual office" first appeared in 1983. Most virtual offices use a mailbox service or executive suite to provide a businesslike address, but the actual work is done from employees' own homes.


The virtual office has become an increasingly popular strategy for businesses of all sizes. Implementations range from the small business owner who hires one or two independent contractors to vast networks of off-site telemarketers.

The virtual option is also very popular with employees. The convenience of a full-time telecommuting position is more than attractive, especially for someone who prefers a nontraditional schedule or who has small children at home.


Using a virtual office can save business owners a great deal of money. Instead of having to pay for commercial office space, the owner and all employees / contractors can work out of home offices. Virtual office jobs are attractive enough to prospective employees that it can outweigh other factors, like a slightly lower salary.

Business owners can expand their hiring range. Instead of looking only at local employees, the company can search on a national or even international level, giving employers a much larger employment pool.

A wide geographic distribution also offers significant sales advantages. If the sales team is located in several different cities, it's easy to divide up the territories and also allows individual salespeople to visit clients and prospects at need.


With a widely distributed virtual office, maintaining communication between salespeople can be quite difficult. Members of the sales team are unlikely to meet in person, so it's hard to foster a feeling of teamwork between them.

The isolation of being located hundreds of miles from the home office often fosters a feeling of independence in virtual employees.

Such employees are inclined to settle issues as they come up, without involving their bosses... which means you might not even hear about a problem until it's too late.

Because you'll often never meet your employees or contractors face to face, you'll have to take their abilities on faith. With a traditional office it's easy to send an experienced salesperson as an observer on a new hire's first few sales calls, or even go along yourself. That option doesn't exist for most virtual offices. And if a salesperson has trouble making their quota it can be much harder to determine the cause.

Where It Stands

The virtual office comes with some significant benefits but it also has serious drawbacks. The small business owner who relies on a virtual office needs to work hard at staying in communication with his salespeople. Such a sales team can benefit from very specific guidelines for the sales process, prospecting methods, and so on. It's a good idea to require regular activity reports so that if a salesperson's numbers start to slump, the sales manager is aware of it immediately.

Some businesses that choose to set up a virtual office handle these issues by making some compromises in the basic model.

For instance, they might require that all employees live within 50 miles of the owner's office so that they can meet regularly.

All in all, the virtual office is a good choice for a small business owner who is willing to invest significant amounts of her own time setting up and maintaining good communication with her sales team. If that doesn't sound like your cup of tea, you're better off sticking to a more traditional office model.