What Factors Should Be Considered In Starting A Second Office?

A Silicon Valley company is considering starting a second office both to reduce costs and to diversify its geographic client base

. What are best practices for starting your first remote office?

Advice from a group of CEOs:

The first question to ask is whether you really need to have an office, or can your employees be virtual? Look at your service provision model and what aspects of your business require an office. Even within Silicon Valley, in an effort to reduce commuting some companies have established local remote offices to enable staff to work near their homes. These offices include full computer and audio-visual facilities so that remote office staff can participate in home office team meetings. There are an increasing number of cloud-based services that facilitate collaboration between widely distributed teams in different geographic areas. These include Go-to-Meeting, WebEx and Sococo. Can a model like this work for you? If so, then locating an office in a different region is not very different from a remote local office.

A virtual office can be located in a business incubator or a casual office location. This would provide you with telephone response, collaboration technology, and the appearance of a local office presence, at greatly reduced cost. Employees could either be W-2 employees or independent contractors. Issues with ICs will include selection and monitoring.

Outside of your current client base, what customer companies would you like to target? Where are they located? Is there a significant geographic concentration of potential customers in other regions? This might tell you where you would want to put either a real or a virtual local office. Locating an office in a location with numerous potential clients also increases the likelihood that you will find a trained and experienced local talent pool to staff your office.

If your some of your business involves close coordination or on-site service at client's locations, choose a location that is a reasonable traveling distance from potential customers in another region. The business development challenge of this office will be to develop local clients for this portion of the business.

Managing widely scattered clients can also be difficult. As you sign up clients in different geographic areas, local offices close to those clients can help you to improve service.

Make sure that you analyze and understand your business model and what portions are exportable. What is your culture and how much does it rely on interaction between home office and consultant staff? Staff located in remote offices can feel 2nd class unless you understand and work to prevent this from the start. The solution is to fully understand your model, and to manage both local and remote office staff through the model. Make it simple to monitor people and their activities.

by: Sandy McMahon

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