More people than ever are taking the plunge and starting their own business. Digital technology has made marketing processes easier and with the gig economy in full swing, larger businesses are substituting permanent employees for freelancers.
Starting a business is exciting endeavor, but with so much to consider, it can be daunting at times. There are so many things to figure out: an appropriate name, a brand identity that will work in the long term and whether to work from home or in an office space.
Working from home used to be associated with startups and freelancers who lacked the budget to rent a full-time office, but now it’s proving popular with established businesses too.
The absence of a commute, flexible hours and productivity are just some of the advantages.
Although working from home has its benefits, not having access to a business address can cause problems, especially when it comes to securing your business when starting out.
Security pitfalls for new businesses
- Firstly, establishing your business as an LLC or corporation without a dedicated business address that is separate from your home address can be difficult. Without one, your personal assets won’t be protected in the event of bankruptcy.
It’s also harder to secure credit for your business without a non-residential address.
- As soon as you’ve developed your products or services, you’ll begin to forge connections with suppliers and customers and receive correspondence. Providing stakeholders with your home address and phone number lacks professionalism and can compromise your security.
- When it comes to marketing your business, it’s good practice to include an address on the contact page and in online directories. In fact, if you’re selling products, you are legally required to provide a real contact address for returns.
You’ll also need to consider what address you are going to put on invoices and other financial and legal documents.
How a virtual address can help secure your business
So how do you avoid these security pitfalls without having to invest in an expensive full-time office space? A virtual office provides the perfect solution, offering the best of both worlds.
A virtual office provides you with a business and mailing address for your company so you can establish your business as an LLC while enjoying the numerous perks that come with working from home. And you’ll never have to give your residential address to anyone, enabling you to separate your business from your personal life.
Establishing a business entity and protecting your personal assets
There are three levels of businesses, but only two are legal entities: LLCs and corporations. The entity you choose will depend on the type of business you run and whether you want to keep you business separate from your personal assets and taxes.
Sole proprietorship is the most basic entity – you don’t need to fill out any forms or register any details, but become a ‘sole proprietor’ by virtue of selling a product or service. The problem is, the sole proprietorship status doesn’t protect your personal assets.
This means that if your business gets sued or finds itself in financial dire straits, you are personally liable for any debt or outstanding taxes.
An LLC is the most popular form of entity and is designed to protect everyone in the business. With an LLC, your personal property is protected because it’s separate from your business – you just need to follow certain guidelines.
When you register your company as an LLC, you will be prompted to name a registered agent and registered agent address. It can be a good idea to choose an address that’s separate from your home one.
Why? Because in the case of a legal proceeding, a lawyer might be able to prove that your business and personal assets aren’t separate. This is what’s referred to as ‘piercing the corporate veil’.
Once you’ve signed up for a virtual office, you can use the address as your business address to enable legal bodies to differentiate between your business and personal assets.
NB: We always recommend that you consult a qualified professional to help you with these decisions.
Obtaining credit for your business
Bank credit is an important step for many small businesses and startups. In the early days, many strive to secure working capital to ensure they have the ability to pay salaries and make purchases in months when cash flow is tight.
A line of credit amounting to $25k for example might enable a business to make payments until they get any overdue receivables from a client. All new small businesses also need to establish business credit in order to maintain a good credit history that’s separate from their personal credit history.
Having a commercial address and phone number that’s separate from your personal ones will increase your chances of getting approved for business credit.
Dealing with correspondence safely
First off, a virtual office provides you with a recognized business address in a location of your choice. In other words, you can establish yourself in a prestigious location at a relatively low cost, while working from the comfort of your own home.
This works wonders for client perception, and enables you to use the address (and telephone number) on marketing collateral.
Having a virtual office address also makes sense from a security perspective. Your business mail is received, signed for and stored safely at the location, ready to be collected at a convenient time. There’s also the option to have mail forwarded to a depot of your choice.
Having a separate phone number for business is recommended; it’s more professional and enables you to separate your work and personal life. With a virtual office plan, you’ll get a business phone number and a virtual receptionist who is on hand to deal with calls professionally.
Virtual offices offer so many benefits for the 21st century business, enabling you to be truly flexible. Simply put, with a virtual office, you can benefit from the products and services found in a traditional office but on an ad hoc basis.
Depending on the virtual office package you choose, you will benefit from:
- A registered company and commercial address for business mail
- A business telephone number
- Access to a hot desk and meeting rooms w/ business technology
- A presence in a city associated with your target market
- Administrative services including secretarial or virtual receptionist support
Could a virtual office solution be just what your business needs? Check out the Alliance Virtual Office website today to search all locations, worldwide.