Right now I’m writing this post from my virtual business office (a.k.a. Starbucks) and, over the last few months, I have been managing my virtual business from 5 different states and hundreds of different wifi hotspots. Soon I’ll be moving into a monthly co-working space in downtown San Francisco but my business will still run completely virtually.
The benefit of me working out of a co-working space will be the human connections of an “office space” and a dedicated desk for me to sit at. Besides that nothing about my virtual business changes whether I’m sitting on a beach, tethering wi-fi from my phone to my macbook or behind a big mahogany desk wheeling and dealing in a 3 piece suit (except I’d look really weird in a suit). So what’s so great about running a virtual business and are their any cons? Read on and I’ll give you an honest overview of what it takes and explore whether or not a virtual business is for you.
What is a Virtual Business?
First, let’s figure out what exactly a virtual business consists of. Well it’s like a brick and mortar business – except better. Imagine all the benefits of running a traditional business then subtract high overhead, lots of employees and being tied down to one physical location most of the time. There lies the beauty of starting a virtual business instead – you can bootstrap it on a shoestring, scale it faster than anything else and pivot with ease since most of your business runs in the cloud.
Look at this list to see if your business falls under the virtual business banner:
- Your product/service/offering is hosted online. Example: our virtual assistant finding service at Zirtual, Grasshopper’s virtual phone service and even Zappos. Even though Zappos has massive offices and warehouses to house all their shoes their business would die without the virtual marketplace of the internet – thus, in my book, they’re considered a virtual business. Also the CEO can log in from anywhere in the world and still run the business properly (at least for a while) without needing to be physically there.
- Your staff is virtual. I often consult companies to go virtual when it comes to hiring, this diversification of staffing allows you to reach a much larger talent pool and has incentives when it comes to lower overhead and flexible staff hours. Having a virtual staff can be anything from hiring a virtual assistant, to managing a 40 person team spread across the globe.
- Your main sales channel is online. IKEA is not a virtual business, if all of their stores closed tomorrow it would destroy their sales and put a huge dent in the company. Zappos, on the other hand sells almost entirely online. So ask yourself, would you rather reach the world and focus towards online sales or is your business better served by limiting reach to X square miles around a physical storefront.
Virtual Business: Is it for You?
This is a very good question to ask if you’re in the beginning of starting a business or are considering pivoting your company. Going virtual is incredibly freeing, but – as with everything – it comes with a certain price.
1. It’s more difficult emotionally to work alone than it is to work in a traditional office setting. A lot of virtual entrepreneurs either won’t own up to this or just don’t realize it but it’s emotionally hard to be isolated 4-8 hours a day, staring at a screen.
That’s why early on I started working at coffee shops – granted I wouldn’t interact that often with the patrons around me but just being in a place buzzing with people made me feel less alone and helped me work better. I’ve now graduated to co-working spaces, which are like coffee houses but with real desks and full of people who are doing the same thing as you.
2. It doesn’t feel as “real”. If you run a cupcakery with 2 other people everyday you walk into work it feels “real”. You can touch the walls, high five your employees and eat the cupcakes – everything in front of you is tangible … and yummy. My business doesn’t come with this same benefit.
Often I “clock in” and feel like I entered this weird business “limbo” where no one is waiting on me and no one is there to make sure I do my job. Our profits are just numbers on a screen (not paper in my hand) and my team is just groups of letters and avatars on a skype chat or email message. Also, my product is something that I can’t touch, taste or smell. You may not realize it now but this kind of intangible business is harder on some people than others, personally I love it and have gotten used to it, but consider this when debating whether or not to start a virtual business yourself.
3. Can you stay on task? When you’re running a taxi service you know what to do each day. You have to get up, go to work and start sending out cars. You need to advertise, sell and hire but most of your day consists of dealing with drivers (real people) and cars (again, real).
When you’re running a virtual business it’s not that easy. I constantly keep a to-do list in Basecamp of things I need to do next, but there’s no one screaming at me on the phone to keep me on target. If I let myself I could spend the whole day staring out the window and not getting squat done, it takes a lot of discipline to build and grow a virtual business – so ask yourself if you have the discipline to stay on task even when the tasks are intangible.
4. Can you sell? Virtual businesses don’t have offices (usually) that a customer can walk into and “discover” your service. Instead you have to know how to sell and sell well to get ahead. There’s no overflow traffic to your virtual business after a ballgame (think bar) and no one is going to see a billboard with your businesses’ name on it and stop by the local branch.
Instead you’ve got to get down, get dirty and think grassroots when you start to market and sell your virtual business. There is no infallible recipe for this so I won’t try to spin one – instead it’ll take hours and days and weeks of you brainstorming the right way to sell people on your virtual business without the benefit of foot traffic.
Pros and Cons
On one hand a virtual business gives you ultimate freedom, allows you to scale quickly and has low overhead. On the other hand there’s no foot traffic so you have to really go all out when it comes to sales and advertising, you’ll be working alone for long hours and you have to be able to appreciate the intangible. Is starting a virtual business for you? I have no way of knowing for sure but I’d love to hear your feedback and questions in the comments below.