Expanding has become essential for driving a business toward sustained success. Reaching out to new geographies empowers business owners to penetrate unexplored markets and interact with interested parties, building a wider presence. That said, expanding your company also has considerable costs, including setting up an office in a specific location.
As you move to a new territory, you must decide whether to build a satellite office or choose a virtual one to attend to new clients. Not having an official presence can work against you. It impacts your credibility as a trustworthy business with which clients would like to associate. Both satellite and virtual offices sound similar, but they have several differences.
These straightforward pointers can assist you as you weigh the possible alternatives for your business.
Satellite Offices Need a Physical Presence
Although the name evokes images of figurative space, these offices are entirely tangible. The core difference from the main office is that they are much smaller. Their name comes from the communication they maintain with the primary organization, providing updates on client-facing tasks and new business acquisitions.
You can choose to establish them in the desired location if you have the budget to accommodate additional rent, utilities, and personnel, albeit at a much smaller scale. You will also need investment in communication technology to ensure seamless interactions among people working from different locations. For instance, you may need project management tools and video conferencing facilities.
Satellite setups also work well for organizations facing significant staff unrest due to return-to-office policies. The scores of people who may have relocated during the COVID-19 pandemic are finding it tough to make long commutes.
A new Pew Research report found that 46 percent of employees would consider quitting their jobs if their employers disallowed them to work from home. This opinion is stronger among women and professionals younger than 50.
A satellite office in their preferred location can be an optimal solution for all the involved parties. They reduce travel times for employees while offering the business a physical address close to an important client.
Virtual Offices Are More Affordable
The other option—virtual offices—are more budget-friendly. They don’t require physical presence but use a virtual address to cement your business’s position in the new location. Usually, these offices perform administrative tasks, like mail handling and client reception. They also build credibility for your business, proving to prospects that you care enough to bring your services close to them.
These offices have become incredibly popular in business hotspots across the US, such as Delaware and Florida. For example, a Delaware virtual office can help business owners receive mail and securely access it online. Business owners can pursue official communication remotely and respond on priority without being limited by geography.
According to The Farm Soho, maintaining virtual offices in prestigious locations can help a company’s image. Moreover, these units offer a secure means to access crucial documents or receive high-stake clients. The credibility boost can be similar to that provided by a satellite office minus the additional cost.
Virtual offices can be ideal for growing businesses that also want to manage budgets optimally. Startups can consider this option by checking flexible leasing or renting options. Digital nomads often go this route, as do organizations on fast-track growth. The latter may have to handle multiple addresses, and setting up a satellite office at each location may not be feasible.
Both Offices Have Some Unique Benefits
While making this decision, businesses will do well to consider unique aspects of the prospective clients or audiences they are trying to reach.
For example, some business communities are apprehensive about doing business “virtually.” China is famous for Guanxi—a close social relationship based on trust that business partners must cultivate. In fact, some studies have noted that Guanxi can influence human resource management to the extent that it decides promotions and bonus allocations.
While the ethical connotations are a subject for another day, the role of Guanxi indicates that satellite offices may be more suitable than virtual ones in this geography.
On the other hand, focusing on virtual offices can indicate a business’s willingness to remain attuned to the times and embrace time-saving technologies. These setups are also sustainable and have a substantially lower carbon footprint.
These traits will appeal to like-minded businesses and can elevate your standing in their eyes. You may find hiring much easier as well as you can recruit suitable talent from anywhere around the world.
Ultimately, the choice between a satellite and a virtual office depends on the priorities of your business, such as cost management versus face-to-face dealings, and its stage in the lifecycle. Many organizations include both types of establishments in their growth plans to balance their spending and enjoy various benefits.
