When I started my business in 2008, the idea of working from our homes didn’t really occur to my partners and me. After working in the same office for many years, we were comfortable sharing a workplace. We leased office space for nearly 18 months before realizing how much money we could save by working remotely. And 12 years later we’re still operating virtually. So, when the pandemic hit, our operations were not affected as much as other businesses having to transition employees to work from home.
Today, even though some businesses are reopening, there will likely be fewer workers returning to workspaces as in the pre-COVID-19 days. Tasks previously thought to require in-person workers have now been handled remotely without skipping a beat. An Intermedia survey of small business owners shows 57% of respondents say they’re likely to maintain remote working options for workers long term. Plus, they found transitioning to remote work increased employee availability by 19%.
Other business owners have discovered it’s possible (and beneficial) to successfully go completely virtual. Of course, it depends on your industry and your target market, but if it makes sense for your business, your “new normal” might be joining the increasing number of businesses operating completely virtually.
Here are eight pros and cons of transitioning to a virtual company.
Pro: Save operating capital
Not having an office staffed with employees saves money on overhead (rent, utilities, parking, furniture, etc.) and commuting costs, which enables you to invest more in research, development and marketing. And you won’t be surprised by rising rent and utility costs.
Pro: Save on liability insurance
Without a physical location you don’t need insurance covering employees or customers possibly slipping and falling in your business. You still need business insurance for such things as errors and omissions and business equipment. Check with your insurance agent to see what insurance policies cover remote business operations (chances are your homeowner’s policies are not enough.
Pro: Afford a bigger staff
Because you’re not limited by office square footage and you’re saving on overhead, the number of workers you can hire is only limited to your budget. Or you can opt for fewer on-staff workers and hire independent contractors on a project-by-project basis. If you go that route, make sure you classify the contractors correctly by following IRS guidelines.
Not having a sign to hang out front means you need to make a little more effort on digital marketing.
Pro: Wider talent pool
Since location is not a factor, you are not restricted to hiring workers in your community. The right person for your business might live across the country or the world, and could cost you less, depending on their cost of living. Take note: Hiring employees in a state other than the state your business is registered in, means paying employer taxes in the employee’s home state. You must also register with the state tax agency, acquire a state income tax withholding number and withhold income taxes for the employee’s state. Your business will also need to be registered with the State’s Department of Labor and follow the state’s labor rules regarding minimum wage, labor laws, state disability insurance, and workers’ compensation.
Con: Technology control
Whether you decide to equip remote employees with company-owned technology or let them BYOD (use their own devices), you have less control than if they were in the same office with an IT person on call. Making sure company-owned equipment is properly taken care of and data security defenses are in place are part of the responsibility of running a virtual company. The FCC offers a free cyber planner wizard to create a custom guide for your business’s cybersecurity policy, which should cover password protection, regular security updates and rules on cloud security.
Con: Marketing challenges
Having an office or storefront inherently gives your business that extra visual marketing advantage. Not having a sign to hang out front means you need to make a little more effort on digital marketing. Fortunately, there are many ways to get your business the attention it needs such as email marketing, social media, content marketing, direct mail, webinars and more. Unfortunately, the cyberspace audience is bombarded on a daily basis with marketing messages, so you will have to work a little harder to make your business stand out.
Con: Lack of camaraderie
Take it from me, it’s much too easy to hunker down in a home office and shut off the rest of the world. Where once I could turn my head and ask my partners for advice or spontaneously brainstorm, virtual communications tend to be limited to email, texts and an occasional Zoom meeting. Your employees may also feel isolated and disconnected from the team and could quit for a non-virtual company.
Pro: So many ways to stay connected!
Luckily, there are many ways to avoid the isolation and keep everyone headed in the same direction. Use project management apps to share documents and progress updates. Video conferencing solutions can help prevent employees from feeling disengaged. Make a plan to have weekly virtual meetings and, when possible, IRL (in real life) get-togethers for coffee or lunch. Even a quick phone call to check in could make a huge impact on remote workers’ mental health—and yours, too.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
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