Businesswise | Going virtual can save your business
What does an entrepreneur do when there's a drastic downturn in business, revenues are not keeping up with skyrocketing expenses and the business is spiralling down the slippery slope of unmanageable debt?
It's a dangerous, and in many cases a fatal position to be in. In fact, in my undergraduate business economics course, we were taught that if a business can't meet its fixed costs, that is, those overheads that remain constant irrespective of how much or little it is producing, it's the clearest signal to shut down.
In reality, the decision to close is far more complex, and thankfully, modern technology such as the virtual workspace has offered a
substantial lifeline for many types of enterprises.
So how can going virtual save your business? And what are the steps and keys to success? I received some valuable insights from an experienced corporate and legal adviser to local and international businesses and entrepreneurs, who successfully took his own office virtual for several years during a dramatic downturn in business that threatened the viability of his firm.
Noted international corporate attorney Marlon Hill is a leading figure in Florida and the Jamaica diaspora, who converted his then eight-year-old partnership firm from a brick-and-mortar outfit to virtual office space in 2009 to buffer the brutal impact of the 2008 global economic meltdown.
"I am convinced that had we not taken that strategic decision, we would not have survived," he said.
The first step in going virtual is to assess the practical operational and financial implications.
After analysing the external environment and their internal costs the firm realised that leasehold expenses and associated costs accounted for 60 per cent of fixed costs but were not essential for survival. They also figured out that staff could just as effectively execute projects from home.
Most important, after polling their clients, they learnt that most rarely needed or desired to access their physical space to do business.
The next step is planning, which Hill estimates could take as few as three months or as long as six months or more. After sensitising staff and key stakeholders and getting buy in, it was critical to document and update all operational procedures in extreme detail, as well as job and task descriptions, reporting mechanisms and structures, logistics and so on.
For any enterprise considering going virtual, the key resources needed are the latest in voice-over Internet protocol technology for your communications, online receipt and scanning of documents, scheduling and document sharing.
The more advanced systems allow for centre call queuing, interactive voice response, computer telephony integration, multimedia recording, payment via mobile and more.
"In our case, all phone lines were routed to a central location, and virtual messages could be emailed directly to the respective staff person. We also centralised our incoming written communications for scanning and digital filing for the respective team member. Very important was having backup systems in the case of technology failure to prevent interruptions and data loss," Hill stressed.
Even with the technology in place, managing teams is challenging.
"The most important thing is communication, communication, communication. Going virtual requires a high level of self-discipline and consistent communications among your team members," said Hill.
He also recommended doing a trial period ahead of closing the physical space where you experiment with different work flows and measure productivity along the way. Employing this strategy helped maintain their high levels of productivity and client satisfaction while operating virtually, ensuring that jobs were completed and targets met.
His final recommendation is to go further than Internet research and seek out and engage people and companies who operate virtually, especially learning from those who once had a physical space.
After successfully operating for more than five years as a virtual outfit, the firm outgrew its platform and needed a broader platform and physical infrastructure to serve its clients.
In January 2015, Hill merged his law firm delancyhill PA with a larger firm, Hamilton Miller & Birthsel LLP. They now operate from headquarters in Miami, Florida, and satellite offices in Kingston, Nassau and the US Virgin Islands.
- Yaneek Page is an entrepreneur and trainer, and creator/executive producer of The Innovators TV series. Email: email@example.com Twitter: @yaneekpage Website: www.yaneekpage.com