Towards the end of last year, an international business with a branch on local soil came up with an interesting statistic – one that provided a colourful litmus test for the small business sector in South Africa.

Regus, one of the world’s largest providers of flexible workspace, found that there had been a 54% year-on-year increase in demand from South Africans for virtual office services.

According to the company’s area director, Kirsten Morgendaal, this rising demand can be attributed to a growing home-based and small business sector which, in the wake of the recession, is looking for a set-up that’s “low cost, low risk and can dramatically increase productivity”.

“Even though the economy in South Africa is recovering, small businesses are acutely aware of the need to control spending,” she says. “Virtual offices offer home businesses, start-ups and companies entering the South African market the benefits of a staffed office – such as a professional business address and a professional receptionist to answer the phone – without the expense, risk and management time of setting up a physical presence.”

The company’s commercial director for Regus Africa, Therese Meyer, says it is an important aspect of a company image.

“A desirable office address can dramatically improve a company’s image, particularly when you’re starting out. It’s all very well having a great product, but if you’re trying to launch it from a bedsit, it can seriously dent your marketing effort,” she says. “This is where the virtual office can help: relatively low-overhead workspaces, positioned in the heart of the action, giving your business the image it deserves.”

The trend seems to be catching on.

Chrisof Sharp, who does web development, social media and IT support for a company in which he has shares – AM Digital – used to have two offices and several in-house staff members. He now has 12 virtual offices all over the country, and uses a service provider known as Virtual Office South Africa (Vosa) to take care of several aspects of his business.

“For less than R500 a month, Vosa affords me a permanent and professional receptionist, who also fields calls on behalf of their other clients,” he explains, adding that there is a brand-free boardroom at Vosa’s premises if he needs to meet a client in a professional milieu, that faxes can be sent and received on his behalf by the virtual service provider, and that the physical address of each local ‘office’ gives it a professional touch.

The receptionist is answering calls for many virtual businesses, but the technology makes it possible for her to answer each one as if she is the front person of each business.

“She answers using my company’s name, and then puts clients on hold and transfers the call to my mobile phone to see if I am available,” he says.

In his Cape Town virtual office, he also has a personal assistant, while his desktop (at home), his tablet and his smartphone synchronise information, if they are within 100 m of one another.

Kathleen Barry, who owns a bespoke jewellery business, Kathleen’s Bead Studio, says that virtual offices are not only ideal for those in the service industry, but those in retail too.

For three years, she leased a shop in Claremont, Cape Town, which she also used as an office. The rental and running costs clocked up an overhead bill of close on R30 000 per month.

She decided to take the virtual route, and says it has been a resounding success.

“When I saw the economy going wobbly, I decided to change my strategy,” she says. “When the lease came up for renewal, I didn’t sign.”

Barry echoes what many virtual office service providers say: going ‘virtual’ has also provided an opportunity to go national.

Her web orders now mainly come from Gauteng, and requests come in from all parts of South Africa.

Social media – Facebook, Twitter and Pinterest – forms a large part of her working day from her virtual office, which consists of a cellphone and a tablet computer. The stock occupies a small section in her house, and though she meets her clients – mainly brides-to-be – to discuss their needs, this can take place at a coffee shop, the dress designer’s premises or elsewhere.

Ironically, while her business has grown from a site-specific retail space to something with a national presence, she says that her biggest saving is time.

“I can concentrate on finding new work for the business instead of chatting to customers. I can fetch my son from school every day as I am not tied down by shop hours, I can have kids around for a play date, and I can spend Saturday mornings with my son. My weekend was only a Sunday before.”

So, what’s the catch?

Sharp says that not all South African clients are ready for Skype culture yet, whereas in the US and UK, this is quickly replacing the need to fly around the country for a meeting. A second issue, he says, is the cost and quality of data transfer.

“In South Africa, you pay a lot for being permanently connected, and Telkom is just not there yet,” he says, adding that it can be a slugging process.

Also, while building one’s brand nationally, thanks to the virtues of the virtual office culture, one has to be okay with travelling a lot.

“Traditional business practices still exist,” he says, “and so, as you broaden your horizon geographically, you also have to be prepared to travel at a moment’s notice if a client wants to meet up face to face.”

But, he says, in the final analysis: “The global village is becoming more of a reality with this, and I think a lot of companies will have to change with the times.”

Still, there are some who don’t want to switch to a virtual office – and not because they are lagging behind the techno zeitgeist.

Don Bayley, a prolific stock photographer who employs a small team to assist with shoots and digitally process his images, chooses to stick with a real office.

“My company could feasibly do about 80% of the work as a virtual operation,” he explains, but says the pros would not outweigh the cons.

First, there is the data transfer that Sharp refers to.

“A stock photographer seeking the highest quality shoots RAW images, which are quite large even by today’s bandwidth standards. It would be somewhat impractical (though not impossible) to move dozens of those back and forth over the internet every day.”

Another reason for having everyone together in one office is for the purpose of what he calls “creative cross-pollination”.

“This covers a variety of things,” he says. “One is training. Because stock photography is an obscure branch of the craft, new employees need lots of training, orientation and supervision in their early months. Not being together in an office would make that very difficult. And then there’s the tossing around of ideas. We often chat informally about this shoot or that processing technique. Yes, we could do it by e-mail or on a chat system, but it wouldn’t be nearly the same.”

Second, he adds, supervision in person is important for efficiency.

“Sure, you could describe defects in an image laboriously in an e-mail, but how much simpler to show the problem area – and the fix – as both of you sit looking at the same screen.”

Also, there is “morale and esprit de corps”.

“We have a nice, positive buzz going in the office, which is good not only for productivity and creativity but also for everyone’s mental health. Working behind a computer screen can feel isolating, even with colleagues in the same room – how much worse if you’re doing it entirely on your own, day after day, month after month.”