Small Business Guide

Do I need an office for my business? [Startup Mistakes]

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When do you imagine starting a business? What comes to your mind? The first thing that would cross your mind will be a spacious, luxurious office space with employees. You would envision your employees engaging in their work in their own office spaces and conducting meetings. You would see them hanging around in the lobby area, enjoying a cup of tea while having a casual conversation. Some well-known companies have done away with the office concept. However, some companies are not able to survive without a physical office. Do I need an office for my business? This is what matters.

Do I need an office for my business?

The office will help build a professional image, engaging interactions, increase accessibility, etc. On the contrary, a business need not have an office but can operate from home or virtually. It reduces the cost incurred for an office, provides a better work-life balance, and enhances productivity.

The businesses will also have to face certain challenges when having an office. The most important factor is the business to understand when actually to invest in a physical office. For this, the business needs to follow certain factors. Some can invest in an office, reach customers, want employees to work, etc. 

What are the benefits of having a physical office?

There are a large number of benefits of having a physical office for a business. Some of them are as below.

  • Presence of a corporate headquarter / corporate office

The corporate headquarter can establish in a large city. It will help the business to attract more business opportunities available within the area. Also, It will act as the most prestigious location in the company.

Related Article: Should I use my home address for my business?

A physical office will help the company to gain more legitimacy. It will also help you to gain brand loyalty and respect from your fresh customers. Besides, it will be a sign that you are serious about the business and that they can rely on you. It will help you to gain customers and employees through foot traffic as well. 

  • Ability to engage in face-to-face interactions 

Most of the recent research findings prove that face-to-face interactions are a better form of communication than others. So this is because face-to-face interactions allow you to see other people’s body language, tone, vibe, etc. Physical office space will give you all these advantages. 

  • Other subjective benefits of an office 

There are also certain subjective benefits of having an office for a business. Some people tend to be more efficient and productive in a physical office environment. They believe that fewer distractions help them to be effective. Also, they try to keep their personal and official life separated to maintain a better work-life balance. 

  • Helps to build a proper corporate image

Businesses that maintain physical offices are likely to have a better image than ones functioning from home or virtually. Gaining trust and loyalty from the customers is key to the success of any business. It is also essential for a business to build a strong customer base while attracting new customers. The professional appearance of a business will help you immensely to achieve it. 

  • Easy accessibility through a better location 

Physical office space will provide greater accessibility to your customers. A business can attract many potential customers if you locate in a prominent place in a city. On the other hand, if your business finds a rural area with less accessibility, you are likely to lose customers. Establishing your office in a remote area will increase the traveling time and cost for customers and your employees. 

  • Interruptions from the outside environment 

Imagine you are working from home or a place outside an office. There can be a large number of interruptions from the surroundings. There can be various noises and certain desires to engage in other activities you prefer. These can ultimately lead to an ineffective work relationship. These little disruptions can become severe over time and can hinder your business’s success. 

  • Encourage teamwork 

Attracting a talented pool of employees is a key factor that leads to the success of any business. It is likely that employees enjoy teamwork in an office environment rather than working virtually. Office space will give them the freedom to work collaboratively. Moreover, the business can monitor their performance closely and reward them for their achievements. 

  • Reduces issues related to security 

Any business needs to maintain the security of data and information. Especially if you are a business dealing with client-sensitive information, data security becomes paramount. In this case, a virtual labor force can be a significant threat to the business. Moreover, working remotely will reduce the safety of the data stored in the devices the business has provided to the employees.

Office space will help the business to provide a specific place within the premises to store their valuable information. Office space also allows employees to conduct meetings that will help to enhance their level of comfort. It is difficult for theft or tampering to happen when data is secure in an office. 

  • Ability to have control over operations 

A physical space will support the business to maintain full control over business operations. There is real-time access to the team, tools, and processes of the business. It will help the business owners to build a conducive corporate culture as well. 

Why is it not essential for a business to have an office?


In contrast to what was discussed above, it can observe that there are major benefits of not having a physical presence.

Many entrepreneurs are starting to work from home or virtually as they believe that it will take them to success.

Some of the advantages of not having an office space can be described as below. 

  • Cost incurred for an office space 

The average cost that needs to spend on an office space is approximately $ 23.23 per square foot. For any business that maintains an office space, that amount comes up to thousands of dollars per month.

This option may not be feasible for an entrepreneur as they can invest that money in something much more important. Also, there are a large number of other expenses involved in maintaining an office space. Some of them are furniture, supplies, insurance that covers business assets, utilities, etc. 

  • Locations of employees

If your business requires talent from multiple countries or states, it is not practical to maintain a centralized office. As the employees base in several geographic locations, a virtual office space would be adequate for that type of business. However, the organization will have to implement a clear communication process using digital technologies. 

  • Increased levels of productivity 

As per the studies conducted, it can observe that the productivity of many people increases at home. In this case, working from home can be a good option. The research shows that 80% of employees are more productive when they work from home. And this can be due to several reasons.

Some of them are the ability to work in your comfort zone, in a place you prefer, and at a pace you like. An increased level of flexibility gained through this can lead to enhanced productivity. You will not have to stress about attending to work on time and wearing attire suitable for the office. 

  • Better work-life balance 

Good work-life balance is an emerging concept amongst most millennials. They have started to value it as it reduces stress and prevents burnout in the workplace. If the employees can maintain a good work-life balance, they work in a healthy working environment.

By working from home, the employees get the opportunity to spend more time with family. Therefore they can attend to the day-to-day work of kids while engaging in official work. Better work-life balance can lead to good mental returns in the long run. 

Challenges faced by entrepreneurs maintaining a home office

There can be certain challenges a business will have to face by having a home office. Some of them are as below. 

  • Reduced capabilities for hiring 

Maintaining an office at home can be ideal for an entrepreneur who acts as a sole practitioner. It would be hard to hire and give space for employees to work in this scenario. You might be able to allow one or two employees to work at your home. But it will lead to a reduction in privacy at home. 

  • Limited space to accommodate clients 

Client meetings and discussions can be fairly difficult when a business operates from home. There can be limited space for meetings, and household interruptions can occur as well. 

  • Limited boundaries

Working from home can be stressful at times as well. This is because you sleep, eat, and work at home every day. This seclusion can lead to anxiety which will reduce the productivity of the employees in the long run. 

How to know whether you need an office for the business?

If the pros and cons discussed above are not adequate to decide whether to have an office or not, you can consider the below factors. 

  • How will the business reach out to the customers?

When you start a new business, you will have to consider how the business will attract potential customers. They will also need to focus on how they will reach their target customer base.

If you target more conservative business owners who will expect you to have an office, then your physical presence becomes important. But if your target market is millennials who would easily grab new technologies, then a physical space will be less important. 

  • How would you want your employees to work?

There will be fewer employees in the business at the inception. It can be just you and another employee. In that case, office space at your home would be adequate.  A physical office will not be required if you have employees working across different states or countries. The business will have to invest in an office if you have many employees within close geographical locations.

  • To which extent does the business require interactions?

This will vary based on the product or the service that your business offers. If your business requires brainstorming sessions, face-to-face meetings, then an office will be required. But if your business has more operational work done at an individual level in isolation, then an office will not be needed. 

  • Do you have adequate working capital for an office?

At the inception of the business, you might not have a large amount of working capital. Hence, physical office space might not be affordable. It is suggested that the business try a feasible option depending on the amount of working capital it has in hand. 

  • What do you require?

This is the most important aspect a business needs to focus on when deciding the requirement of an office. As a businessman or an entrepreneur, you need to ask yourself first what you prefer. Suppose you want to work in an office environment, from home, or in a virtual environment. Your instincts will help you understand what you really want. 

Tips to start a business at home without an office

Operating a business without an office can have challenges and complications. How long the business can operate without a physical workspace will depend on the type of business and its goals. Below are some of the useful tips a business can follow to start a business without an office. 

  • Develop a proper workspace at your residence 

If you are an entrepreneur running your entire business operation from home, this can be an important aspect to focus on. Firstly, you will have to set up a proper workplace for you at your home.

This space needs to mimic an office. It needs to give you the sense and feeling that you are actually in an office environment. It should properly arrange, neat, and organized. If you work in the same place and sleep, you tend to get distracted more. Hence, setting up a proper office space is vital for your productivity. 

  • Assign work hours that are flexible 

The business does not need to operate in strict working hours. You can communicate with your team members and work on flexible working hours. Flexible hours will allow employees to manage stress while maintaining a good work-life balance. So the business owner can collectively discuss with the team and decide on a schedule that will best work for them.

The business needs to be cautious of how much each employee works. So this is because working from home can lead to employees working longer than they are supposed to as they don’t have to worry about commuting. 

  • Set a time to work outside from home 

When you don’t own a particular office space, you mustn’t only stick to your home. You can let your employees work outside the home from time to time to change their routine schedule.

You can rent a co-working space for this purpose. Also, you can sip a coffee and have a meeting at a cafe in a beautiful environment. Your team will be more motivated and satisfied when they did not confine to one space.

Also, the business needs to make an effort to network with industry experts by attending training and conferences. This will give the employees an insight that working from home doesn’t mean staying at home every day.

  • Invest in the most suitable technologies 

The absence of office space will be an excellent cost-saving for a company. A business can utilize those savings to invest in the right technologies.

When running an office from home, you will need to implement the right technologies to run the operations smoothly. Some examples would be payroll management, data management, etc.

Not working side by side with employees can pose a challenge to the business. Hence, a business with no office will need a clear communication and information flow process with employees. This can include video conferencing, various software used for instant messaging, etc. 

  • Implement a set of procedures and rules

If you are a business operating from home, you can initiate a set of ground rules for your day-to-day routine. You can let your family know the times that you should not be disturbed. Also, you can communicate basics on how to know if you are busy at work or if you need any help with work.

You can also take continuous breaks by allowing a certain level of flexibility in your schedule. This is because breaks from work will enhance the productivity and effectiveness of work. 

What is the best time for a business to have a physical office space?

Most of the entrepreneurs start their small businesses in their private residences. Having the office at home reduces costs, and it helps the business invest in other essential aspects of operations.


However, when the business grows over time, the business will see new expansion opportunities.  Then the business will start to foresee the requirement of moving out of the home to a physical office space.

Below are some tips that will help you to identify the right time for expansion. 

  • Requirement to hire more staff 

When the business grows over time, the operations and functions of the business will increase as well. Then a requirement to recruit additional staff to fill those gaps will arise. A home office will not have adequate space to accommodate all these employees. Hence, the business will have to seek physical office space. 

  • Ability to afford an office space 

Your business can also see the possibility of moving out to an office when it is affordable. When the business grows, the business will start to generate revenue while making profits over time. So this will make the business affordable to purchase physical office space for the business. 

  • High level of distractions at the home office 

Even though you start your business at home in the beginning, distractions can increase over time. Your children will grow, and household work can become messier and noisier. These distractions can affect your day-to-day operations negatively. To better focus on work, you will have to look out for proper office space over time. 

  • Rules and regulations from the government 

The government can impose multiple rules and regulations for businesses operating from home. The authorities will be strict on what type of businesses can manage from home and what needs to have a separate workspace. 

  • Build a professional image

A separate physical office will help a business create positive impressions amongst customers about the business. The professional image of a business is important to retain existing customers while attracting new customers.

  • Requirement to have a lot of interactions with clients 

The home office of a business can be of little space. Also, there can be a  lot of disruptions to your work. You may tend to have your important meetings off-site to overcome this issue. However, when the amount of interactions increases, you will need to see the possibility of moving into an office space.  


Running an office with no office can be both advantageous and non-advantageous. A common question is how long a business can survive without having a physical office. In the modern business world, most businesses do not have physical office spaces. This strategic decision can actually save money and will help to maintain a work-life balance. 

The discussion above would help you understand and guide you to make an important strategic decision about your business. You need to analyze in-depth and understand whether a physical office space requirements for your business. If you are still worried, you can always switch plans. There are a large number of businesses that have become successful both with and without an office. 

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