However, a majority of these issues have easy solutions that you should proactively implement to make sure your virtual business remains successful. While a virtual business proves to have many advantages, there are a few drawbacks that you should consider before establishing one. Disadvantages of operating a virtual business According to an Owl Labs survey, 90% of employees working remotely are just as productive (if not more) as those working in the office.Įmployees also acquire a better overall work-life balance as a result of having more time for family, hobbies, and exercise, which is critical for employee happiness and long-term retention. Advantage: Happier and more productive workforceĭespite the common fear that remote work results in a less productive workforce, recent data proves otherwise. This means you can hire the most talented and qualified people for the job without any geographical boundaries. Since employees in a virtual business environment can work anywhere, employers have the luxury of hiring people from all over the world, helping to diversify their workforce. Advantage: Flexible, more diverse employee baseĪ physical office limits you to hiring the best person you can afford within a 30-mile radius, thereby excluding 99.9% of the world's talent. This could include outsourcing various business functions such as sales, marketing, answering services, product development, and shipping. Since most work can be done online, many virtual businesses take advantage of that by getting rid of unnecessary costs. First and foremost, without the need of a physical office space, you can save on overhead costs like rent and utilities.Īccording to estimations by Global Workplace Analytics, employers can save roughly $11,000 per person per year if they enable their staff to work remotely 50% of the time. One of the greatest advantages of a virtual business is the reduction of many business expenses. To do this, a virtual business must employ high amounts of communication technology like cloud computing and phone answering to interact with employees and clients. This means you have the ability to hire employees from all over the world and expand your customer base from virtually anywhere. With everything running online, you no longer need to worry about geographic boundaries. Thanks to the rise of technology trends like video conferencing and project management tools, running a virtual business has become more possible than ever before. To run a virtual business, all you need is a computer and access to the internet. In other instances, a virtual business may maintain a physical location for important meetings or a facility where employees can do tasks such as packing shipments for customers like Amazon.īecause of the minimal overhead costs, virtual businesses are popular among startups and small businesses that are run from home. Some virtual businesses are fully online, with no central office or headquarters and solely remote employees. While virtual business operations are mostly conducted online, they can differ in levels of physical operations. Keep reading to learn the fundamentals of a virtual business, the advantages and disadvantages, and examples of industries that are well-suited for going fully virtual.Ī virtual business is one that is run primarily online rather than a physical, or brick-and-mortar, office. Companies that embrace a virtual business early on have the ability to surpass competitors that don’t. Companies must be able to adapt to an ever-changing world in order to remain successful.Ĭonsider this: Firms that adopted technology 20 years ago mostly supplanted those that did not. While this doesn’t mean that every business will be virtual, it does mean that every job that can be done remotely and isn't service- or location-based will be. To put this in context, according to a LinkedIn report, experts estimate that by 2030, there will be roughly 80 million full-time remote employees across the U.S. With the rise of the virtual workplace, virtual businesses are taking over and will be the new normal in the near future. A virtual business is one that performs all or most of its operations over the internet.
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