How a Virtual Office Can Save You Money

August 27, 2014 | Sharon Cheong

Advances in technology made it possible for people to communicate with anyone in any part of the world where there is an internet connection. The same technology led to the development of virtual offices, where employees work online from home.  Studies point out that by 2016 more than 60 million employees are expected to work from home.

Virtual Office Explained

A traditional office is to workspace as a virtual office is to cyberspace.  A virtual office is an expansive term that pertains to any work environment that is accessed and delivered through web-based computing technologies and communication.  Technically speaking, your “office” is wherever you work. It could be at your home, in a car or train, at the airport, in a café, on the beach, and so on. Typically, the office's base is your home, and you take it with you whenever you travel.

Generally, virtual offices run without a physical address, and every business communication and processes are done through the Internet. However, there are virtual office providers that bundles in a professional physical address, mailing address, business conference facility, virtual receptionist, and reception courtesies for receiving packages and deliveries.  All employees do their office work remotely by accessing the company's Intranet, and other collaboration and application tools.

Pros and Cons

Any office setup has its advantages and disadvantages, and a virtual office is not an exception.  A major disadvantage of a virtual office is the lack of personal interaction between employees and employers, and amongst employees. It is fairly difficult to form a personal relationship with people you only meet online. Employee loyalty is harder to develop, but this could be remedied by thinking of ways to keep loyalty up without face-to-face interaction.

A major advantage of a virtual office is that it's convenient for both employees and employers as they can do office work anywhere. The ability to work does not depend on location. If an employee is not feeling well, but has a deadline to meet, he could do his work from the comfort of his bed. If an employee has a doctor's appointment during his regular virtual office hours, he could make up for lost time by working late in the day.

Cutting down on office expenses is another primary advantage of opting for a virtual office. The business owner no longer has to pay for rent, utility bills and other expenses that come with renting and maintaining an office space.

Big Savings with Virtual Offices

There is no doubt that a business owner saves money when he opts for a virtual office instead of a traditional workspace.

First, the business owner does not have to pay an exorbitant amount of money for an office space located in a prime location. There is no need to furnish, equip, staff and maintain a workspace. Not having to pour out a hefty chunk of a business's running capital into rent and day-to-day operation expenses makes a big difference for any company, more so for SMEs.

Second, there is no need to set aside money for monthly overhead expenses for electricity, water, telephone, internet and other related services such as office cleaning and maintenance.  Some of the financial burden of health care, insurance, record keeping and employee payroll are eliminated. Employees can receive their compensation through online bank transactions.  Traditional sick days, vacation days, holidays and personal leaves are no longer applicable to virtual staff.

Third, savings on salaries are expected.  For example, a traditional receptionist earns from $96 to $114 per day. A virtual receptionist is paid only a fraction of this conventional salary per day.

Fourth, since all employees (and employers) work from home (or anywhere they choose to); everyone saves on personal representation, transportation and daily allowance. Both employees and employer do not have to put on office clothes to work. They do not have to commute to and from work daily.  The amount of money saved on their personal daily allowance is significant.

Fifth, a business owner who opts for a virtual office has more flexibility to tweak his company expenses in relation to fluctuations in the business's income.


More businesses worldwide are opting for virtual offices. Aside from trimming overhead expenses, a business owner is presented with the opportunity to hire the best workers from anywhere in the world. He no longer has to wonder where his employees are as long as they do their job.  The work environment has become more flexible thanks to the portability afforded by technology in general and virtual office in particular.

A virtual office is suitable for small to medium scale startup companies as it allows low-cost expansion that is not hindered by any long-term commitment in terms of a lease contract.

If you are looking for a virtual office provider in Singapore, call Servcorp for assistance.