Virtual companies have become more and more attractive to new entrepreneurs. We are living in a digital era, where brick and mortar business locations are losing popularity day by day. Moreover, the Covid-19 pandemic is pushing this work style even further.
If you’ve just begun your virtual business journey and your ambition is to rock the world of your future customers, you shouldn’t forget to include in your strategic plan the opportunities your start-up can bring to you in the long term.
The secret that no-one reveals to you is that between the advantages and the opportunities of a virtual business there are some slight differences. In a word, advantages can open up new opportunities for your company. The advantage is a favourable circumstance, while the opportunity is a step forward towards advancement, progress, or profit.
Table of contents:
- A short guide to virtual business management
- Why outsourcing can be a valuable solution for your virtual business?
- Advantages of a virtual business
- Virtual businesses opportunities
1. A short guide to virtual business management
I guess you already know the definition of a virtual business – Nevertheless, I prefer to refresh your memory by reminding you that a virtual business is a business that operates with a very limited physical presence in an office and relies on information and communication technology.
The most extreme type of virtual company is one with no physical presence in an office at all, where all the employees work remotely. In less extreme examples, virtual businesses may still have headquarters where employees work.
If you want to have a complete understanding of the opportunities that a virtual business can bring to you, first you must have clear ideas regarding the virtual business management.
When it comes to virtual business management, there are three options available for you. The first two of them are just extreme solutions that I personally consider inefficient and unrealistic (but if you find a way to successfully apply them just let me know because you might have discovered the ultimate solution for a modern business).
- Managing your virtual business all by yourself
If you’re a freelancer ready to face a virtual company’s challenge, you can simply use your home address as a business address (I wouldn’t recommend you to do that – Keeping your business and your family details separate by using a virtual address is safer and wiser) and choose some of the essential communication tools to manage your leads, customers and sales.
Sounds easy, doesn’t it? Although anything is possible and nothing is impossible, you might need to think twice before deciding to manage by yourself all the functions of your business, such as product development, marketing, sales, ICT, and shipping. That might be quite overwhelming.
- Fully outsourcing your virtual business
Although this idea can work better than managing all the functions of your business by yourself, are you sure you want someone else to concentrate on the core of your business?
Before taking any decision, I would recommend you read the next paragraphs about the third solution you can apply as far as your virtual business management is concerned.
- Outsourcing most of your virtual business functions, where you focus only on your core business function
This concept means that perhaps the best solution that can lead your virtual company to success is finding the trade-off between the business functions that can be outsourced and the core activities you might want to manage directly.
In a few words, you can manage by yourself the core activities of your business and rely on the services of a Virtual Business Manager (VBM) for all the other business functions. You can define a VBM as a virtually based support professional who manages operations and team members to ensure that all projects are getting completed efficiently (if you’re interested in this topic, you can read about the roles of virtual assistants too).
Are you following me? Are you sure? Okay, let’s continue. Now let me reveal to you some more cunning tips on how you can enhance your virtual business growth.
But first, let me give you a definition of the “Core Business” that perhaps you won’t find if you google these two words: the “Core Business” refers to the activity that can add the greatest value to your business. Are you running a retail company? Then sales activities are your core business. Would you have enough time and knowledge to focus on both the core business and the accounting? Or on the core business and ICT? Maybe not.
To sum up what I mentioned above, no matter if you are a freelancer, new entrepreneur, or existing business owner, it is crucial for you to identify the activities that can bring the greatest value to your business. Bear in mind these five simple words and never forget them: “Business Begins With Value Creation”. Focus on those activities that are vital for your business success. Accounting and ICT will never bring to your business the same value as the core activities.
2. Why outsourcing can be a valuable solution for your virtual business?
I have bad news for you. Before knowing more about the most significant opportunities that a virtual business can bring to you, you’ll have to run through this whole business lesson. But I will try to be as brief as possible.
Outsourcing can be a valuable solution for your virtual business for three main reasons:
1. Time is money
At the beginning it might seem expensive to outsource a lot of your business functions. Third-party services aren’t free. But what do you have to lose if you must deliver 20 invoices a day? Time. Remember, time is money (just an interesting fact for you: this famous aphorism was written by Benjamin Franklin in “Advice to a Young Tradesman”, an essay published in 1748).
Let’s take a simple example. But first, answer one question. Do your customers expect your business to be always contactable? If yes, you have three options:
- You answer the phone day and night – How much time would you lose if you did that?
- You hire someone to answer the phone – This might seem a wiser idea, but remember that employees who work on salary count as a fixed cost
- You outsource your receptionist – Virtual reception services mean that someone will answer your calls for you, in your company’s name. Nevertheless, you don’t have to hire someone to do that. An Australian-based virtual reception can answer your calls 24/7 and help you save time and money. Do you understand better now why you must value your time?
Although the above relates specifically to customer service, the same logic can apply to marketing, sales and delivery of your product or service.
2. Efficiency and effectiveness
Are you sure you can manage the accounting of your company as well as someone who is an expert in this field and has been doing this for years? What if it was not just accounting, are you sure you are the best digital marketer available? What about sales? You need to ensure that you have the right people, in the right place to create an efficient and effective business.
Scalability allows for expansion and revenue growth while reducing operational costs. You only pay for what you use. This means that a company can save a significant amount of money that otherwise would have been spent on retainer costs.
Scalability can bring reputation, efficiency and quality to your business. According to the Corporate Finance Institute, a scalable business must focus on improving the profitability and efficiency of services even when its workload increases (and this is exactly what outsourcing does).
3. Advantages of a virtual business
Yes, we are getting closer to the main purpose of this article (understanding the opportunities a virtual business can bring to you).
But first, let’s see, very briefly, the advantages of a virtual business:
- Lower startup costs – A physical space costs money. This advantage is perhaps the most obvious. Using a virtual office, for example, will help you avoid real estate and physical office costs.
- Lower ongoing overheads – A physical office will cost you money monthly.
- Happier employees – Your employees can save an average of 10 hours of commute time each week and can work more flexibly. This can only make them happier.
- Employee retention – Happier employees are more likely to stick around.
- Flexibility – You can work anytime and anywhere.
- Productivity increases – Establishing specific goals instead of monitoring when your employees arrive to work and when they leave will increase the productivity of your business.
4. Virtual businesses opportunities
Finally, we arrived at the key idea of this article. Remember what I told you at the beginning? Advantages can open up new opportunities for your company, so it was imperative that we walked through the foundations before stepping into the opportunities that they unlock.
Now let’s analyse the opportunities that a virtual business can bring to you based on the advantages mentioned above:
- Lower start-up costs will allow you to invest more money in your business
- Lower ongoing overheads will lead to resource efficiency
- Happier employees will maximise productivity and increase the marginal income
- Employee retention means that you will not waste time and money in order to hire new employees. According to a Global Workplace Analytics study, losing a valued employee can cost an employer $10,000 to $30,000.
- Flexibility will allow you to improve your work-life balance
- Productivity increases your profit margins (of course, it’s up to you whether you reinvest the money in your virtual business or you escape on a sandy beach, where you can enjoy the ultimate Mojito!)
To sum up, the best solution you have when it comes to virtual business management is outsourcing most of your virtual business functions and focusing only on your core business – which ideally does not rely on anyone being physically present to deliver.
Outsourcing can be a valuable solution for your company because it can help you save time and money, increase the efficiency of your business, and bring scalability.
This means that you can reach the opportunities that a virtual company can bring to you faster, such as: having more money to invest in your company, resource efficiency, maximise the productivity and increase the marginal income, saving time and money by keeping the employees, an excellent work-life balance for you, and an increase in profit margins. Last but not least, if your goal is running a successful virtual business, I would love for us to be one of the mechanisms that unlocks this vision by providing you a virtual office through B2B HQ.