According to the Small Business Administration, more than half of all new small businesses fail in the first five years. Inexperience, not enough startup capital, and a bad location choice are the top three reasons behind most failures. In reality, unless it’s a home business and the services offered are Internet based, all three reasons are interrelated.

So how can a startup avoid the frequent mistakes that lead to failure?

Capital vs Costs

Every new business requires enough startup capital to cover day-to-day expenses as well as hidden costs if they’re to have any chance at success. Property leases, payroll expenses, equipment rentals and telecommunication costs are some of the known expenses that can be factored into an operations budget, but some expenses aren’t as straightforward and can cripple a business immediately.

One example of hidden costs can be found in the expenses associated with the initial location setup. Fitting your business space with the necessary office furniture, performing any renovations that may be required to meet building codes and obtaining relevant permits and licenses for your business can get expensive really quickly. To lower these expenses, consider a virtual office at a prime piece of real estate in order to limit the decoration expenses. As a business is just starting off, a virtual office can be nice as it offers all of the amenities at a fraction of the cost of leasing your own office space.

Don’t Underestimate the Importance of Location

How big it is and how much the lease costs are just two of the many things to consider when choosing a location for your business. Other location-related factors that can directly impact your business’ performance are:

Market saturation

How many competing businesses are located within 1 mile? If competition is high, your chances of failing are greater against your more established competitors.

Tax incentives

As mentioned already, business taxes can be crippling to a bottom line. Choose a location with a favorable tax climate and incentives for start-ups so that more of your profits can go toward reinvestment.

Customer base

Depending on the services offered, are you located in an area with high customer traffic or not? Customer proximity is the best way to promote growth so don’t choose a location that’s hard to find or far away from your intended market or your suppliers.

Aesthetics

If you’re catering to a high-end demographic, choose a high-end location that reflects the image you wish to project for your business. Perhaps access to a conference room will benefit your business when hosting potential clients, or a nice waiting room for your new customers.

Expanding Too Soon

Growth is exciting, but expanding too soon can lead to failure. By starting off in a virtual office you’ll get to know other small businesses. This often gives you the opportunity to hire them as an independent contractor when you need help rather than hiring someone when you may not always have work for them. By contracting work out to other people in your office you don’t have to worry about having office space for them either.

A virtual office is a unique place to work. While the benefits can be immense, there are some challenges to ensuring that the virtual workplace is productive and efficient. Here are some terrific tips for managing projects and work in a non-traditional type of office.

Instant Messaging

While plenty of work can be done over email or by sending documents and other projects back and forth, there is real value in real time communication. Utilizing an instant messaging service is a great way for employees to be conversing in real time. This open communication model will create a sense of teamwork and camaraderie by allowing for real conversations that occur while employees are working on projects together, and it will also protect against the trivial mistakes that result from poor communication.

Team Meetings Online

Even the virtual workplace can benefit from having the entire team have a group conversation about independent and team projects as well as any challenges or problems. While it may not be feasible for the team to meet in person as they would in a traditional workplace, having a virtual team meeting is still a great way for employees to bond and share common concerns. Positive feelings among the team will boost happiness and productivity, and having a dedicated time for employees to raise any issues will lead to speedy and simple conflict resolution.

Use the Right Software

Having a system for online project management is critical to staying organized and task-driven in the virtual work environment. The right software or online system is therefore important to making sure the virtual office runs smoothly. Dedicated spaces for documents and work-related tasks must be a part of whatever project management system the virtual office uses.

The virtual office has many benefits, allowing for a great deal of employee flexibility. But there are also some challenges, and utilizing these tips will allow the virtual workplace to handle them appropriately. Working with an online instant messaging system, dedicating time for team meetings, and providing the right project management system, helps set any virtual office up for great success.

In order to run a successful company, small business owners must continually explore ways to build brand clout and strengthen their reputation. In most cases, building a strong business requires years of hard work and dedication, but business owners have certain resources available to them that make an immediate impact on the legitimacy of their company. Virtual offices are a prime example of such a resource.

Exploring the Benefits of a Virtual Office

Virtual offices offer the prestige and convenience of a well-known address and location, without the hefty investment required to rent or purchase office space in the area. With a virtual office in place, any business owner can utilize a known mailing address on their business correspondence, which helps generate interest in the company’s products and services. Many business owners also take advantage of live answering services, which utilize professional receptionists to direct phone calls and take messages for clients. This can further contribute to the perceived legitimacy of a small business.

Using a Virtual Office for Expansion

Running a small business from one’s home is often a more cost efficient way to launch a company, but when expanding to international sales, business owners must think outside the box. International clientele are much more likely to interact with established brands located at a prominent location, such as Beverly Hills. Virtual offices allow anyone to establish this legitimacy in the eyes of their clients, without spending a small fortune.

Not only is a virtual office a viable solution for savvy business professionals, but this service is also convenient and affordable. This makes choosing a virtual office an option for nearly any business owner to consider. By investing in a virtual office, businesses can open the doors to expansion and look to the future today.

The Bottom Line. Every start-up knows its importance, and any edge up is worth fighting for. That’s where virtual offices can make the difference. Free up your bottom line and opt for a virtual office service that includes two must haves: conference room access and live answering services. Grab a few indispensable business apps, and the transition can be painless.

Conference Room

Let’s face it, there are times when the local coffee house just won’t cut it. A private and well-equipped conference room can increase your client trust and rapport. Making conference calls, pitching projects and even interviewing potential employees in a state-of-the-art conference room provides your clients and employees a viable experience that a fancy address alone simply cannot.

If you find your employees need more physical face-to-face interaction, a virtual office service that offers access to a conference room can provide a comfortable, private, professional space to host luncheons, meet-and-greets or brainstorming sessions.

Live Answering Service

When it comes to phone etiquette, impression is everything. Having a live answering service ensures this impression communicates a legitimate, brick-and-mortar company with all the amenities. Most virtual offices provide a variety of live answering services with numerous options to cater to your business’ needs.

Essential Apps for the Start-Up

Transitioning to the virtual office doesn’t have to be complicated. And with the right tools to keep employees connected, your business can take full advantage of the new opportunity:

Yammer

Yammer provides a free, private social network for any size team, allowing efficient collaboration throughout the company. Keep your work schedule and schedule your work with ease.

iCall

Saving phone plan minutes can be a great tool to minimize your small business expenses, and iCall provides a unique feature to do just that. Receive a call while on a wireless internet network and switch the call with this app to save your minutes.

Skype

Skype makes it easy and quick to share information of all kinds. With voice plans, video chat, messaging and the ability to share any size video, your employees will have no excuse to be “out of the loop”.

A few more must-haves: Beluga, Free Conference Call, Ideapi, iNvite and Dragon Dictation.

Having a receptionist answer your phone when customers call promotes a positive image for your business and is the best way about handling customer phone calls. Having a telephone number on your website instills confidence in a customer so that they’ll do business with you. It shows the customer that they can get help whenever they need it. However, if the telephone is answered in a poor way the client might form a negative outlook about your business which might cost you money.

There are several different ways to answer the phone that you should avoid. First, we will discuss answering the phone yourself. This looks bad because you are running a business and shouldn’t have time to answer the phone. It also does not look very professional. You should also avoid answering your phone out in public. The noise around you can turn off the caller and give them an overall negative reaction regarding the phone call. Potential clients may also get frustrated if they are transferred to voicemail immediately. It is known that most people do not leave messages, so you are likely to lose that customer. Lastly, no one likes to navigate through a menu to reach a live person. Odds are good they’ll just become frustrated and hang up.

You can avoid all of this drama over a simple phone call with live answering services. For a small monthly payment you can have a live receptionist answer your phone calls during business hours and direct them to you. The only difference between a typical receptionist and one at a virtual office is that the one at the virtual office isn’t occupying office space you have to pay for.