Working outside the office or running a business without a physical location is not unusual anymore. Many businesses had been operating this way for years, but it was really the COVID-19 pandemic that made work-from-home the new standard. Advances in digital technology, from virtual meetings to online collaboration tools have made it possible for people to continue work without putting their health at stake.
Furthermore, not just individual employees but entire businesses have discovered that they can operate without having a physical office or storefront. All kinds of businesses, from consultancy firms and webdesign companies to e-commerce stores are now operating entirely online.
This leads us to wonder whether businesses can thrive in today’s competitive world without a physical location. There’s no cut-and-dry answer to this question. Every business has unique requirements. Some companies require a physical location to interface with their customers, while others many need a warehouse for distribution or storage. Others may not have these requirements, or may be able to come up with hybrid solutions that bridge the gap and cover the need. So if you’re looking to start your own business, do you need a physical space or can you get started without a specific location?
In this article, we’ll cover how you know whether your new business needs a physical location, and some alternatives to setting up a physical office or storefront.
How to Decide if You Need a Physical Space
There are a few key things to consider when starting a business and deciding whether you need to set up a physical location or not.
Your Needs and Budget
Not every new business venture needs a physical location. Online marketing has become so powerful that businesses that started from scratch fully online have become million-dollar companies today. However, running your business digitally isn’t without its risks.
It all comes down to balancing the risks with the money you’ll save. Rent, equipment and maintenance of a physical location can be major expenses, especially for new businesses. So its important to consider your budget before deciding on whether to have an office or not, and balance this with your needs.
Generally, you don’t need a physical space unless:
- You need to store a large amount of inventory
- You need to handle distribution or deliveries
- Your business manufactures or assembles products
- You target customers do not want to shop online and want to make purchases in person
- Your target clients will expect you to have an office, otherwise you’ll look unprofessional
Having an office or storefront could make your business look professional, trustworthy, and successful, and if this is the case, the investment will be worth the expense. Calculate the expenses of having a physical location and compare it with the business you will get in return. You’ll also need to factor in the cost of moving. Packaging, mattress bags, furniture disassembling, and movers can cost your business hundreds or even thousands of dollars, so don’t forget to include this in your calculations.
Its Impact on Your Employees
Nobody understands your employees better than you. Any sudden change in how your employees execute their daily office chores can take a toll on their productivity. For instance, asking your remote employees to work from an office might not be a good idea for a business running online for years. Likewise, transitioning from the office to remote work can affect your productivity of employees used to working in the office.
Furthermore, some employees don’t have the resources necessary to work from home, while others can’t meet the expenses of traveling to work daily. Some employees have roles and responsibilities that require in-person meetings or a physical location. Consider your current work environment and whether it is beneficial to your employees’ productivity. Understand how the work environment affects their roles. Even if your planned shift in the working environment is beneficial for each employee, your employees need time to adjust to a new working model.
The Hybrid Model
The pandemic has given employees the chance to evaluate their work environment and choose a setting that works best for them. While some people returned to the office, others embraced remote work. Some people choose a hybrid working model, where they work from home but visit the office from time to time.
Ask your employees if they are comfortable working from home or if they prefer a hybrid working model. It could be that you still need an office, but can get away with a smaller space. Your business only needs enough space for the number of employees coming into your office every day. A smaller office can help you establish a reputable business without paying for the extra space you don’t need.
There is no need to shell out for a physical space when most of your employees are working from home. If this is the case, a co-working space makes a good alternative to a physical location. It’s a setup that allows you to work in a well-equipped office environment while being more flexible and cheaper than renting your own office space.
A co-working space is an ideal working model for freelancers, but companies have also started embracing this environment. If your work can’t be done remotely and you don’t have a budget for an office, a co-working space is your best bet as it offers the best of both worlds.
The Bottom Line
Whether you need a physical office for your business depends on your budget and regular business operations. Some businesses don’t need physical space at all, while others can’t do without it. Understand your needs and invest in a physical space only if it will generate returns.