What is a virtual office?

There’s a lot of talk about “going virtual” these days. But what exactly does that mean?

According to Wikipedia, a virtual office is defined as

“the operational domain of any business or organization whose workforce includes a significant proportion of workers using technology to perform their work at home.”

Basically, a virtual office is an office that primarily exists in cyberspace and without a designated physical location. It empowers businesses to run from virtually (see what I did there?) any location via the internet.

How a virtual office works

When you choose a virtual office, you’re deciding against having a designated physical location where you and your employees go to work. Instead, your office is wherever you are—as long as you have internet access. And your employees’ offices are wherever they are.

Usually, people work out of a home office or a quiet space in their home, but that isn’t your only option. You can work out of hotels, coffee shops, coworking spaces, or even on the beach! In fact, there’s a modern movement of “digital nomads” who run their businesses as they travel.

Having a virtual business means relying on the web for communications and meetings. Instead of spending a big chunk of money on rent (even a small office is pretty expensive these days), you spend a much smaller amount of money on the tools that keep your team in contact. These tools usually include video chat software, text chat tools, and product management software.

Who a virtual office works for

Of course, not every company thrives with a virtual office. Working remotely works the best for small businesses with motivated employees—and it requires a particular kind of culture. To succeed as a virtual company, it’s important to empower your virtual staff by giving them the training and the tools they need to succeed.

Like most things, a virtual office space comes with its own set of pros and cons.


The advantages of virtual offices are especially impactful for solo or small businesses. If you don’t have any employees, or only have a few, this is often the most inexpensive way to run your business. There are also growth advantages—since transitioning from a virtual to physical office space is easier than moving from one office to a new one.

Benefits of a virtual office include:

  • No commute—unless you want one
  • Employees are empowered to work when they work best
  • Employees are empowered to work where they work best
  • Access to talent isn’t limited to a geographic location
  • Lower overhead costs
  • Lower turnover
  • Can help your company grow more quickly


There are, of course, situations where a physical location is necessary for your business. And a virtual office isn’t right for everyone.

The disadvantages of a virtual office include:

  • You’ll need to seek out a location for client meetings, as you won’t have your own conference rooms
  • A lack of face-to-face interaction can make building a company culture hard as you grow
  • Coordinating meetings and projects may be difficult if employees are in different time zones
  • A lack of separation between work and home is sometimes problematic—when you work where you live, it may be difficult to “clock out.”
  • Employees who work remotely have to be self-driven

Whether or not a virtual office works for you depends on your personal and company needs. Not sure what office type is right for you? Check out our examination of four different office types!

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