Everything Entrepreneurs Need to Know About Virtual Startups

There was a time not too long ago when starting a business required an entrepreneur to jump through a series of well-established hoops. Some of those included finding a brick and mortar storefront, investing substantial setup costs, and hiring a physical team of employees.

Although that workplace style is still an option for many small businesses, today’s entrepreneurs have more choices. The digital revolution hasn’t just changed the way customers interact with businesses, but also how businesses organize and structure themselves.

Perhaps the best example is found in the virtual startup; a business not only based online, but also located online with remote people collaborating and working from wherever they are in the world.

Digital Nomads

Over recent years, the idea of the digital nomad has soared into mainstream popularity. These are individuals who are able to travel and work from any location that has an internet connection. Working remotely rather than in a fixed physical location saves on costs and also facilitates freedom and lifestyle opportunities that would have been absolutely unthinkable at any time in history prior to the late 1990s.

It also opens up the talent pool. More than half of the world’s population is now based online, a percentage that only continues to grow. Businesses now have access to talent all over the world rather than being limited to those within a commutable distance. Before they can reach out to that talent, what do virtual startup entrepreneurs need to consider?

Outsourcing Versus Hiring

When you set out to build a virtual team, one of the first decisions you’ll need to make is around the makeup of your agreement with them. Are you outsourcing individual tasks, or hiring them permanently onto your team? The best virtual startups generally utilize both these agreements, because they both have strengths and weaknesses.

Outsourcing leaves you free from long-term commitments, gives you greater agility and opportunities to bring different ideas into your business. The trade-off is that it can become difficult to work consistently across projects. It can also be demanding to repeatedly communicate your mission, values and guidelines to a constantly changing team.

Hiring people on an ongoing contract gives you greater consistency and stability. It’s the best option for ongoing tasks that will be required in your business on a regular basis, since hiring on a salaried basis invariably represents better value per project. However, it also leaves you exposed to ongoing costs, which some virtual entrepreneurs prefer to avoid.

The makeup of your agreement with remote employees or freelancers is going to be among the first questions they ask, so make sure you have this clearly outlined before proceeding.

Finding People

Next up, you need to actually find and engage with these people.

LinkedIn has emerged as perhaps the foremost tool in this department. It’s incredibly easy to use LinkedIn’s search tools to find relevant individuals with the right skills, who may be open to opportunities. You can filter results by job title, industry, and location keywords. Identify a suitable person, then hit ‘Connect.’ You can add a short note to your invitation, in which you can briefly explain the reason for your connection. This can create a conversation, in which you can swap relevant contact details and move the discussion outside of LinkedIn.

If you’d rather potential team members come to you, head to the LinkedIn Jobs page and click the ‘Post a Job’ button. You can boost your job posts on LinkedIn, setting a budget to manage your costs, and only pay when candidates view your post. You can also hire freelancers through sites such as Upwork and PeoplePerHour.

Project Management

When there’s no physical location, it’s important to manage projects properly. Managing your projects by email seems easy at first, but before long it can require too much input from you. It’s important that your remote team is able to collaborate and communicate directly, without you manually forwarding correspondence. You also want to make sure you have a general overview of what’s going on on each project.

Fortunately, there are a range of tools that have been specifically designed to bolster remote collaboration and project management. Some of these include:

Whenever choosing a software, it’s important to do your research. Capterra is a handy software comparison tool in which you can read reviews, carry out side-by-side comparisons, and check out screenshots, videos, and more to better understand whether a software package is right for you. Make sure that your whole team is given access to this tool, and instructed on how to use it for all communication and correspondence.

Location, Location, Location…

Another possibility to consider is whether to move your entire operation offshore. With remote businesses, you aren’t limited to a single building; you can run your business from anywhere with an internet connection — provided you comply with your legal requirements.

Many businesses set up virtual mailboxes or rent shared work spaces to establish a physical street address. Consult with experts on tax law in your home country, and destination country, before getting started!

There are lots of things to consider when identifying ‘where’ to house your business. Washington State University’s College of Business recently looked at the cheapest places to set up a business, and set their five criteria as:

Funding
Educated workforce
Low cost of living
Economic health
Low corporate taxes

Based on these criteria, they identified Hong Kong, Canada, United States, Singapore and Australia as the cheapest countries to start businesses. Don’t just take their word for it, though. Do your homework and determine the perfect location for you.

Psychology & Motivation

Many people assume that a business distributed across the world can’t have a culture or a set of shared values. If anything, this becomes more important with remote teams. When we work in a physical office, we are surrounded by reminders of our purpose and mission; which helps foster a sense of belonging and motivation. People working remotely generally don’t have access to these things.

One of the great cultural shifts of the working world in recent years has been the growing importance of meaning and purpose to our roles. They’re rapidly becoming as important to employees as pay, if not more so. We all want to feel that what we do matters, and serves something larger than our own self-interest. A clearly defined sense of purpose and meaning can help boost loyalty, retention, and productivity.

When you start your business, create a mission statement that explains your why and what you’re here to do. Identify key behaviors and values that you expect from your team, and that they can expect in return. As time unfolds, consider arranging meet ups with your team, whether it’s physical or digital.

We live in exciting times, and virtual startups represent one of the most exciting opportunities available to budding entrepreneurs. The barriers to entry may be lower than ever, but it’s still not easy. Your challenges generally increase in direct proportion with the scale of your success.

But, as any entrepreneur will know, the rewards of being your own boss and building something amazing more than compensate for the struggle involved.

Charlie Carpenter is the co-founder and CEO of Kite. He is a mobile advocate with over ten years of industry experience. After working for large and small agencies for many years, he co-founded Kite; a software solution for print-on-demand, zero inventory merchandise, and personalized photo print goods. Charlie is also a seasoned product strategist with experience of various types of digital projects which include responsive and adaptive websites, mobile and tablet apps, hybrid apps, and cross platform app development. You can connect with Charlie on LinkedIn, and follow him on Twitter.