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5 Cons of Operating Without a Physical Business Address

Are you the proud owner of a small business that doesn’t have a known physical location?

In today’s digital age, it’s possible to run an online-only business from the comfort of your home office – and there’s a strong case for not having a physical office. You’ll do away with the cost of leasing or buying commercial space, as well as office furniture and supplies.

However, a physical business address is a crucial asset. In this article, we will tell you how you’re putting your company at a disadvantage by not having an office address.

Let’s get into it.

1. Poor First Impressions

First impressions don’t just apply in our personal lives. They’re applicable in the business world as well, and the stakes are even higher. A potential client can make a split-second decision to take their business elsewhere based on how they judge various things about your business, such as the website.

What impression is your business sending if it doesn’t have a physical address? Not a great one!

Sure, the internet has revolutionized how some businesses are run, and it’s fine to operate a business without a physical office. But, depending on your target audience, you might be shooting yourself in the foot if you don’t have a physical business address.

While Gen Zers and some millennials might not see any problem there, Gen Xers and boomers want to buy goods and services from “real” businesses. If your business doesn’t have a physical, it as well might be a fake business, at least according to these older consumers.

Don’t let a lack of a physical address give your business a bad first impression. You can make use of a virtual address. Although a virtual address for business isn’t a physical location where customers can visit, it’s a real address where mail can be sent.

2. Protect the Privacy of Your Home Address

When you run a web-only business, you can use your home address as the official address of the business. Or if your business is home-based, the home address will automatically belong to the business.

Although using a home address is better than having no address at all, it still doesn’t help with the first impressions. However, there is an even bigger problem: privacy.

You certainly don’t want your home address to be publicly available information. It exposes you to security risks since anyone who comes across the address can trace your home.

Protect yourself and your loved ones by keeping your home address confidential. A home address will help you save costs as a small business, but the risk is not worth it. Find a physical address for the business, or at least use a virtual address.

3. You Can’t Make the Most of Google My Business

Google My Business is a service that helps people find the physical locations of various businesses. It’s also a powerful local SEO tool that every brick-and-mortar business needs to use.

If your business doesn’t have a physical address, it won’t be able to use the GBM service. You don’t have to worry about this if your business doesn’t make in-person contact with customers, but if it does, start thinking about getting a physical address.

Perhaps you’re a mobile clothing shop, so the nature of the business doesn’t necessitate a physical address. That’s fine, but if you want to harness the power of Google My Business, a physical address is a must. Maybe this is the best time to open your first permanent location!

4. Lack of Clear Separation of Business Affairs from Personal Affairs

It’s best practice to separate your business from your personal affairs. There are many reasons for this, but the most important is to protect your business from liability.

If you don’t have a physical business address, chances are you’re using your home address. This isn’t illegal, but it can make you more vulnerable to liability claims.

Let’s say your business is registered as a corporation, and the address on file is your home address. Legally, your business is a separate entity. But if you’re using the same address to receive both personal and business mail, it’s easy harder to maintain clear separation.

In the event of a liability case, a court of law can use that lack of separation to pierce the corporate veil. This means your personal assets can be used to settle the debts of the business.

This scenario might be unlikely, but it’s better to be safe than sorry. A physical business address makes separating business and personal affairs a breeze.

5. Zoning Regulations and HOA Rules

Zoning regulations and HOA rules can restrict your use of a home address for business purposes.

For example, some zoning regulations prohibit using residential property for any form of commercial activity. This means you cannot conduct any business in your home. Something as simple as receiving business mail to your home address can be impossible.

If you live in a neighborhood where zoning and/or HOA rules are making it difficult for you to run your business, don’t sneak around. The right thing to do is set up a physical address for the company.

You Need a Physical Business Address

If the nature of your business doesn’t call for a physical location, it’s understandable that you might not see the need to get a physical address. But as we’ve demonstrated, operating without a physical business address isn’t a smart move. Having a real address comes at a cost, but it’s worth it.

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