For several years I thought that you needed an office to start a business. Somehow I had this subconscious idea that to start a business, you needed an office. A place to go to where the business “is”.
Later on, as my company grew to over 40 employees in the Philippines, I’ve set up offices for other reasons as well. One, to make sure that I knew everyone was productive (coming into work each day) and two, to facilitate communication within our team.
However, I noticed something strange. People would come into the office and sit at their cubicles, and then when they needed to chat with each other they would use Skype! Even if they sit next to each other, they still chat to each other through Skype.
So much for needing an office. Later on, I created the Time Doctor software purely for the reason that I wanted to shut down the office and all its associated costs and needed software to tie it all in together.
Actually there are many examples of successful startups that do not have an office.
Other startups did start virtually and later moved into an office as their business started to grow-
It’s all relative to the size of your revenues and the exact nature of your business. Your situation is very different if you have revenues of $100k per month compared to a start-up with little revenues.
If you’re a startup, every dollar counts. Is spending $1k per month for an office the best use of your money? Is having an office actually going to lead to your company to getting more sales? If the answer is “no” then consider carefully if you are spending money wisely or if there is something more productive you could spend it on.
There are four main perceived “benefits” of having an office. You need to make sure you have replacement for these if you are running a virtual business.
For many people when they start a business, the first thing they feel like they need to do is get an office. A sign of a physical presence. Somehow the office makes the business feel “real”. This is a concept that I believe will die in the 21st century. A business with an office is not any more real or valid than a business without an office.