Traditionally, start-up firms have had two choices when deciding where to “set up shop”: turn a spare bedroom at home into an office or lease commercial office space.

Unfortunately, neither option presents a particularly attractive business case. Although convenient and cost-effective, the home office can be wrought with distractions such as kids and pets and they are not the most conducive place to host important client meetings.

Leasing commercial space can be expensive and often times risky. Not to mention the time and energy required to find a suitable office, negotiate the lease terms, purchase furnishings and equipment, hire office staff and services, etc.

For years, many small businesses wrestled with these challenges. Many are surprised to find that there is another way.

The Best of Both Worlds

A virtual office can be a powerful tool for small businesses that want to limit their start-up costs and establish themselves alongside larger competitors. For a fraction of the cost required to set up and maintain a full-time office, small business owners can use virtual offices to create a more professional image, enhance productivity, and offer service in new markets.

Essentially, a virtual office acts as an extension of the business' physical presence. While you continue to work at home or at your current office, an assistant at the “virtual” location handles incoming calls answering them in the business' name, and receives and forwards mail and faxes.

A virtual office gives you a prestigious business address and local phone number, which can make a positive impression on potential clients. For example, The Regus Group, the world's largest provider of workplace solutions, boasts a worldwide network of more than 1,000 business centers in 450 cities worldwide. All of the centers are located in first-class office buildings like the Chrysler Building, the John Hancock Center, Spear Tower, and the Crescent Center in key business districts, and you could establish a virtual office at any of them.

Virtual offices can also be used as a tool to test and enter new markets. If a market is not as successful as initially planned, the investment and risk exposure is minimal. Consequently if the market is successful, the business has gained an immediate presence in a viable market.

All of these benefits are great, but what happens when your customer asks to visit the office? Some providers such as The Regus Group provide virtual office clients the use of furnished offices or meeting rooms at their virtual office location for a set number of days every month. Regus business centers are full-service facilities with fully furnished private offices, meeting rooms, videoconferencing facilities, and administrative and other services.

The flexibility of the virtual office opens a new realm of possibilities for entrepreneurs seeking to grow their businesses. With no long-term contracts, small firms can be more agile in the marketplace. Free from the high costs and constraints of traditional real estate, the virtual office may be the small business owner's gateway to growth.