Guide to Starting a Virtual Business

Four Examples of Virtual Companies

A virtual company uses technology like video conferencing, telecommunications, and email marketing to work remotely. Remote teams don’t have to be in the same physical location. However, different companies use this concept to varying degrees. Some businesses like blogs and e-commerce companies operate completely virtually, while others work remotely some of the time in a hybrid structure that has workers come in on certain days of the week or only on certain occasions.

An example of a great job that would work in a completely virtual company is a freelance writer. It’s easy to do things like send pitch emails and get feedback from editors online. Here are a few more examples in various industries.

• If you’ve ever used products like WordPress or Tumblr, you’ve used Automattic’s software. The company’s goal is to make it easy for all people to create and publish content through their applications.
• Employers use Toptal to find skilled freelancers from all over the globe who do things like software development, project management, and financial analytics.
• Close is a customer relationship management (CRM) company for salespeople. The software lets a small business’ sales force call, text, use instant messaging, or email clients on one platform, like a laptop.
• TrustHCS educates medical coders and provides staffing and consulting to health care facilities. They help hospitals save money by keeping better and more accurate data for their patients.

How Does a Virtual Company Operate?

There are a few things that most remote businesses have in common. Most need some sort of cloud-based collaboration software (e.g., Monday.com) and a way to communicate (e.g., Zoom or GoToMeeting) to hold video conferences when email and phone calls are insufficient. Even small virtual businesses need these elements to set up a remote office.

For example, if you’re the leader of a remote software development team, you’ll need video conferencing software to hold daily meetings to evaluate a client’s needs, check the team’s progress, and go over problems. You’ll also need a cloud-based development space to collaborate and implement code in real time.

The Pros and Cons of Virtual Businesses

While there are many positives to owning a virtual business, there are also drawbacks. It isn’t for everyone. We’ll help you weigh the benefits against the downsides.

Virtual Business Pros

Going remote can help a dedicated team do more, cost less, and be happier. You keep the cash you would spend on an office space. In fact, workers can roll out of bed and immediately start working. Some great things about having a virtual business include:

• It saves your business money on an office and liability insurance. 
• It gives you access to the most skilled workers worldwide.
• It’s been found to increase productivity. 
• Workers don’t have to commute.

Virtual Business Cons

Some businesses thrive on face-to-face interaction. There are ways to combat the isolation some remote working employees might feel, like checking in often, scheduling in-person events, and using social media. Some possible negatives of having a virtual business include:

• It can be difficult for workers to feel connected.
• There’s no in-person information technology (IT) staff to manage technology.
• It can be challenging to keep a global network secure.
• Home offices can be vulnerable to distractions.
• Digital marketing can be difficult for remote teams.

How to Set Up a Virtual Company

Now that you’ve seen a few examples, how do you start your own virtual business? The process is similar to starting an in-person business in many ways, but you’ll also have to consider a few other factors. 

Register your business

Depending on the state, the process for registering your virtual business could vary. Most states let you register by mail, through a LLC formation service, or online using the Secretary of State’s website. You can also get a federal trademark if you plan on growing your business and want to lock down your business name and IP.

Decide on your business structure and whether you’d like to be incorporated. This could include forming a limited liability company (LLC), corporation, or another business entity type. Keep in mind that we can form your new LLC for free (+ state fee), keeping your costs as low as possible in this area. You may also need to obtain a tax ID and put together some other information.

Create a virtual business plan

A business plan will help you make the best of your resources and find investors. Be sure to plan things like how your business will operate, what roles the leaders will play, and how and when your business will make money. 

Your business plan may change as you operate your company over time. Still, it’s important to have a direction for where you’d like your business to go. The more in-depth your business plan is, the more likely it is to succeed.

Determine communication expectations

For virtual business owners, communication is key. Distributed teams can lack the camaraderie of in-person work environments. Decide how and when your employees will meet. Some companies prefer daily meetings, while others prefer only to catch up weekly or even monthly. 

What tools will you use to communicate and collaborate? Tools like Asana and Google Docs can be used for collaboration, and platforms like Slack and Zoom can help you keep in touch. You can also have in-person get-togethers periodically.

Create a website or store platform

E-commerce is especially important if you don’t have a storefront. You’ll need a quality website or tool like Fulfillment by Amazon (FBA) that showcases what your business sells and lets customers buy items online. 

You can use platforms like Wix or Squarespace to put together a business website. However, you’ll need to check that you can register your desired domain name. We can help you secure a business domain name.

Hire remote employees

Hiring employees for remote work can be great because there’s such a broad talent pool to search from. The only problem you’ll have is whittling down your search to the very best. Talent networks like Upwork and Flexjobs can help. Decide things like:

• Will you hire contract, full-, or part-time workers?
• What positions do you need?
• What benefits and perks will you offer?

Related: Skyrocket Your Business to the Next Level with a Virtual PBX System