I found myself as Chief Information Officer of a small start-up company struggling to make ends meet at one point in my career. We were burning between $50,000.00 and $75,000.00 per month and falling short of that amount in *gross* sales.
We were reliant on investors to fund the business, and investors were becoming increasingly scarce. Our small business appeared to be doomed.
After crunching some numbers, I determined that we could cut expenses in half if we let go of everyone who was not critical to the business and, more importantly, if we closed the office and operated the business ‘virtually.’
The executive team initially opposed the idea, but I explained how we could accomplish it and demonstrated how much money we could save monthly by doing so. They agreed after much deliberation, and our small business became ‘virtual’.
After informing employees of the bad news, we closed the office and each executive team member took home all files, equipment, and other items necessary for their job. We provided computers, software, and equipment to our ‘critical’ employees as needed.
We set up a virtual PBX phone system just before we left the office. They are widely available on the Internet. You can conduct a search for ‘virtual pbx’ using one of the major search engines. I am currently using GotVMail.com. It works quite well for us and is quite affordable.
Nowadays, the majority of large businesses have an automated PBX system, so our use of this system does not give the impression that we lack a central office. You can even upgrade it and have a live person answer the phones if you prefer. These are also plentiful. When a call is made to the pbx system, it is routed to the number that we establish (like for sales, support, Bob Fischer, etc.) If the phone is not answered, the pbx system routes the call to the voice mail for that phone account. The best feature of these pbx systems is their low price. We currently pay between $35 and $75 per month and have an 800 number. While we all have phones and cellphones, the cost is significantly lower because our phones are not configured with the phone company as ‘business’ phones. Assume the account is a ‘business’ account and the monthly bill more than doubles.
After taking care of the phone system, we move on to the corporate information/file system.
As the Chief Information Officer, I took all of the computer servers and Internet connectivity equipment home with me. I established a sufficient Internet connection to my house (again, non-commercial) and conducted all of our inter-computer networking and Website operations over the Internet from my residence. We established a VPN (virtual private network) connection between our computers via the Internet, allowing us to view them all as if we were in an office. Secured directories on any computer were protected in the same way that they are in an office. I created an FTP (File Transfer Protocol) site on our file server to serve as a ‘central’ file server. Again, it was completely secure against intruders, but all of our employees had the same level of access to the central file system as if they were in an office.
In terms of interoffice communication, we continued to rely heavily on phones and email, just as we frequently did in the office. We could use ‘virtual meeting’ software for meetings, but we discovered that we much preferred to meet in a restaurant and enjoy a (company-paid) bite to eat.
Our small business was now entirely virtual. Everyone was working from home, and I might add that they were *enjoying* it. We ran into a nasty problem shortly after we began. We discovered that our employees (the critical ones on whom we relied) succumbed to the temptation to watch TV or take care of domestic matters (being at home) rather than truly dedicating the time we paid them to working for us. Gradually, it became increasingly difficult to reach a live person who would (almost) never answer our phones. Our clients were being neglected. Sales were declining (which was already a problem). We (I) began to believe that I would made a mistake and that this would not work.
We held an executive meeting to discuss the issue and determined that we had two options: resolve the issue or shut down the business. We determined that we would do everything possible to resolve the issue.
We began by convening a corporate meeting (and treating everyone to lunch) and explaining our situation to our employees. We told them categorically that if they continued, they would lose their jobs.
We then restructured employee compensation. Salaries decreased significantly but were subsidized through performance-based pay. This was more akin to piece work. The emphasis was not so much on how long they worked as on how much they accomplished.
Additionally, we developed software to monitor their performance. Each time they completed a task, they had to check a box or click a button on the computer to indicate that it was complete. If they did not, they were not compensated. Of course, we had to check periodically to ensure they were not lying, and they were, for the most part, truthful. Occasionally, additional information was required, such as selecting the client from a drop-down menu or selecting specific services provided. To summarize, they were required to document every aspect of their work in order to be compensated.
We created reports on each of our employees’ work in order to keep a close eye on them. Some reports were made available to all employees, while others were restricted to specific employees. For instance, our service team was always aware of what the other was doing. Our sales team was constantly aware of who was selling what (with information restrictions like customer names, etc.). We assigned’senior’ employees to monitor their subordinates (particularly with regard to voice mail messages to ensure that phones were answered), creating a ‘virtual supervisor’ system.
As a result, we knew what our employees were doing at all times (and were aware that we were aware). True, as with any business, we had to let some people go and rehire, but for the most part, it worked *exceptionally* well. Our sales and operations were significantly superior to what they were, even while we were in the office. Everyone was accountable for their actions to the entire company. Good work was rewarded (mostly with money, but also with promotions), while poor (or non-existent) work was punished (sometimes with the loss of their fantastic ‘work at home’ job).
That small start-up company is still operating and struggling. I have reservations about the company’s overall business plan, but the virtual offices work *exceptionally well*; much better than I anticipated.
Since then, I have noticed that an increasing number of businesses are allowing employees to work from home. My friend works for a large ‘temp staffing’ company. She used to report to work every day. She now works full-time from home.
With today’s technology, it is certainly feasible, and in many cases, even practical, to operate a business ‘virtually,’ that is, without a central office.