Every day, we’re breaking boundaries and creating new ways to do business and grow our professional lives. As a result, we’re also redefining what it means to work and how to do it.

It seems so long ago when companies and organizations were confined within the four walls of a physical office, working from 9 to 5. Now, you can work from the comforts of your home, your favorite cafe, up in the mountains, or by the beach. Your hours can also be flexible, especially with the onset of digital technology that allows for continuous productivity 24/7.

If you’ve just started your business, concepts and conditions like these may seem daunting. But the truth is these work styles can be applied to both new and established companies. You just have to determine what works for your team and for your business’ long-term goals.

So, to set up a physical office or go for a virtual one? What is a virtual office anyway? What are the advantages and disadvantages of each option? Continue reading and find the answers to your questions below.

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What is a virtual office?

A virtual office and a physical office both have their respective addresses but their similarities end there. Unlike the traditional set-up, a virtual office doesn’t exist physically. For that reason, it doesn’t need to be staffed by employees every day of the week. There are also no utility and maintenance bills to pay.

What a virtual office has is an address and, depending on your subscription or membership, an array of office services. This can include meeting and conference rooms if you need them, a mailing address for your business, and phone answering services.

How it works

Virtual offices were created to give businesses a physical address and to make any business look established. Additionally, it serves as a receiving point for packages, documents, and other types of mail intended for the company or organization. This physical address is especially useful for start-up businesses that have yet to launch and want some sense of legitimacy. And since there is no actual office space being rented, a virtual office can help cut expenses or even fund product development and other business processes.

 

The perks of having a virtual office

There are various benefits that come along with having a virtual office set up:

• It drives down operational costs. As mentioned earlier, there is no actual office space to rent. As a result, there is no need to spend on furniture and amenities, no need to employ a regular staff to man said office, and no need to spend money on maintenance and office utilities. Basic office services, such as communications and video conferencing, are often part of virtual office packages.
• It’s flexible. There are numerous plans for virtual offices out there. You can sign up for one for a fixed term or get a virtual office on a month-to-month basis. As your company becomes more established, the transition of leaving a virtual office for a physical one can be smooth and stress-free.
• It frees up time for more productivity. With a virtual office, your team will work remotely. And as such, you and your team won’t have to spend at least an hour stuck in traffic to get to and from the office.
  And although remote workers are autonomous, they are incentivized to be productive. It’s because most people who work remotely view such an arrangement as a privilege that can be taken away. In order to continue working remotely, they must show that this method works.
• It can make your business seem larger. Small start-up businesses constantly grapple with legitimacy. A virtual office can give them that. With a verifiable mailing address and contact details, you can establish trust between your business and would-be partners and clients, as well as talent. 

The disadvantages of having a virtual office

While a virtual office definitely has its advantages, it also has its very own set of disadvantages. Here are some challenges you might face if you have a virtual office:

• There is no centralized space for your team. If you are leading a small team, meeting up to discuss work and projects can be a little difficult. While it’s true that some virtual office packages include the use of meeting and conference rooms, it’s still subject to the management’s schedule which may not agree with your team. It can even be more challenging if you are set to meet potential clients, partners, or investors.
  Restricted access can also be an issue, as not all office spaces are open 24/7.
• It can be hard to nurture your company’s culture. With you and your team members working remotely, there will be less face-to-face interaction with each other. This can be a hurdle if you are looking to develop your company’s culture as early as possible. While this can be remedied with activities such as after-work gatherings and team building events, another challenge can arise — conflicts in schedules.
• There might be some miscommunication once in a while. Lack of face-to-face interaction can also be mitigated with social media and messaging apps. And in this day and age, there are so many options that will enable you and your team to contact each other whenever and wherever.
  On one hand, it’s convenient, but on the other hand, it’s also easy to mistranslate or miscommunicate via such means. It’s because with messaging apps, there is no way to tell the tone of voice of the person you’re talking to. There are no non-verbal cues to read as well.
• There is hardly any access to more specialized office services. You and your team have to rely on yourselves to troubleshoot special issues, such as problems with your laptop, faulty software, and snail-paced internet speed. Such things can affect your team’s efficiency and productivity. If you have a physical office with a dedicated IT team, these problems can be resolved easily and at no individual cost.

What is a physical office?

As its name implies, a physical office doesn’t just exist on paper. It takes up actual space. It’s the traditional office we all came to know the moment we became acquainted with the concept of employment. It has a physical address, it is bounded by four (or more) walls, and offers some amenities. These features range from meeting and conference rooms to a pantry and a break space where employees can relax and get to know one another.

Having a physical office makes sense for established businesses and companies, However, it’s not quite the case for start-ups and small organizations. That said, having a centralized physical office has benefits for all businesses, big or small.

How it works

As mentioned earlier, a centralized office physically exists. It has an address and features amenities and office services. And since it isn’t just on paper like a virtual office, it needs to be staffed by employees. You’ll have to furnish the office space with desks and other workplace essentials, as well.

A physical office also requires maintenance. This is factored in, together with utilities like electricity and Internet connection, as part of operational costs. The payroll may include a small team of maintenance and security personnel unless you choose to set up a physical office at a coworking space.

You can purchase a physical office space for your company or rent one out as your business grows.
 

The perks of having a physical office

Having a centralized physical office not only brings practical features. It can also positively impact your company’s growth and identity.

• It helps you build your company’s brand identity and team culture. While marketing has infiltrated the online sphere, having a centralized office is still a reliable way to build and develop your business’ identity. You can turn the office into a physical representation of what your business is all about through decor, amenities, and the office layout you choose, among other things. Working in the same place also helps foster team culture and face-to-face interaction.
• People have more trust in your brand. If a virtual office can give your company a sense of legitimacy, a physical office can firmly establish trust between your business and its clients, partners — basically, the general public. They know where your company is located and they know they can talk to an official representative there.
  This is especially helpful when it’s time to meet potential partners and investors. Visiting your company’s physical office will give them a glimpse of the inner workings of the organization.
• You can have more control over your team. Letting your employees work in one space gives you more oversight, thus allowing you to better supervise and delegate accordingly. You and your team members will also be able to build personal rapport with each other. This leads to more collaboration, better communication, and higher productivity and efficiency.
• The whole team can enjoy amenities at no individual cost. With a physical office, there is no need to look around for cafes with a reliable, high-speed Internet connection or have one installed in your home.  Videoconferencing and other tools will be readily available.
  If your business deals with sensitive and private information, working in a physical office can offer some level of data protection, as well.
• It may be easier to maintain work-life balance. One adverse effect of working remotely is that it can blur the lines between your personal life and your work. As you and your team will be required to work in a centralized office, there will be a clear delineation between these aspects. After official work hours, you can leave your work behind and focus on your interests and hobbies outside the office.

The disadvantages of having a physical office

We named several benefits that come with having a physical office but enjoying these perks come with a steep price — literally.

• Maintaining a physical office is expensive. Expect your operational and overall outgoing costs to be significant when you have a physical office. As mentioned before, you will need to pay for staff to man the space, as well as maintenance and utilities. The cost of keeping a physical office can increase if you choose to set one up in a location where such spaces are considered a premium.
  All that said, there are ways to keep the costs of having a physical office down. Instead of purchasing, you can choose to rent on a long-term basis. Another option is to keep a physical office at a coworking space. This arrangement allows you and your team to enjoy the benefits of a physical office without shelling too much cash on miscellaneous office needs.
• Going to the office can eat up time. Metro Manila is absolutely notorious for its headache-inducing traffic jams. It was even found out that we spend an additional 257 hours stuck in traffic during peak hours. Life is short. All that time can be spent on something else, such as your work or your personal pursuits.
  

 

Virtual vs. Physical: How do they stack up against each other?

On one hand, having a virtual office seems to be more beneficial. On another hand, having a physical office is the clear winner. Here’s our conclusion.

A virtual office is the ideal starting line for start-up businesses in their early days. At this point in time, there is still no need to have a physical office. It’s much better to reallocate funds on other business processes.

As your business grows, however, consider making the transition toward establishing a physical office. This will give your company more legitimacy and enable it to expand even further. If remote work seems to fly well with your team, you can still offer this privilege while maintaining a central office.

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What does your business currently need? Let us help you here at Loft! We offer virtual office packages in Ortigas and office space for rent at reasonable prices. Talk to us today to get a free consultation.