While everyone was watching for the telecommuting trend to explode, something else exploded right next to it: The virtual company. The business with no office to telecommute from.

These companies give new opportunities to entrepreneurs to get started with no money down. But a virtual business also gives people the opportunity to create the personal life they want. “The future is likely to be the age of virtual businesses,” writes Anita Campbell, founder of Small Business Trends. “Forget three guys in a garage that was your father’s startup. Today it’s three people spread out across the country or even across continents, each in their home offices or back porches with laptops, mobile phones, and WiFi.”

Pamela Slim, who blogs at Escape From Cubicle Nation, says there is a “perfect storm” of factors converging to make virtual businesses more popular, and easier to start:

1. Workers will quit regular jobs to get control over their time.
Both men and women are increasingly willing to leave the work force to create personal time and family time, according to Jacqueline Luffman, a labor analyst for the government of Canada. In light of that, a virtual office ends up seeming like a compromise rather than an extreme solution.

2. Technology levels the playing field.
It has become so cheap and easy to use that someone who doesn’t have a lot of resources can create a web presence that looks established and professional.

3. Retail businesses can be virtual.
Of course, there’s always eBay. But you can also set up a shop with Amazon, where you create a storefront (which could even be a blog) and Amazon handles all inventory and fulfillment issues — and then sends you a check for the sales you make. Or you can work with a slew of smaller online wholesalers the same way.

4. The rise of telecommuting.
Established companies such as Sun Microsystems realize that telecommuters are happy, appreciative and cost-effective, so they encourage people to telecommute. Smart companies provide essential training and support so workers are productive at home from the start. The side effect is that location-based companies are training workers on how to set up their own virtual companies.

This trend means that it’s easier for you to have a work life that you can control – whether you’re working at your own virtual company or at someone else’s. The benefits are flexibility, efficiency and little overhead. The drawback is that time management is difficult, and not everyone can adapt.

Dennis Yang works at Techdirt, a virtual company that provides daily news and analysis to corporate clients. While Yang does not sit with co-workers, he is never lonely. He typically has about seven conversations going on at any one time on his computer screen, and he can work anywhere he wants — for example, his grandmother’s living room.

A typical day involves constant instant messaging, occasional emails with clients, and Skype for Internet-based phone calls, which are free – though Yang adds, “We don’t like to have phone conversations because it’s difficult to have more than one at a time.”

Techdirt’s 14 employees hang out in a virtual conference room, which is really a chat room, and when the once-a-week phone call happens, someone types in the chat room that it’s time to move to the conference call.

Not surprisingly, members of Generation Y populate many of the virtual companies. “The younger generation is very attracted by the virtual companies because they are used to it. Skype and IM are normal to them, and it is not weird to work with people you rarely see when most of your friends are people you rarely see.” says Chris Yeh, co-chair of the Founders Forum for entrepreneurs, and founder of his own company, Targetfirst.

But virtual companies have a lot to offer Generation X as well: “We want a career that gives us control over our schedule and our life,” says Yeh. “I want a work environment where I can also focus on my kids. Working from
home is not a panacea for everything because the kids take time and they are always calling for you, but at least there’s no commute time.”

The virtual business community is huge, so there’s room for everyone. In fact a whole economy has developed in which virtual companies do business with other virtual companies. Sharon Sarmiento, founder of Streamline Virtual Office Solutions, offers project-based, administrative assistance to companies that do not need a physical presence. So it is no surprise that a major client is Andy Wibbels, the king of promoting blog-based businesses.

For some people, such as Yang, virtual companies present a continual mix of work life and personal life where neither begins or ends. For others, such as Yeh and Sarmiento, a virtual company is a way to discover optimal methods for dividing a day.

Last week Sarmiento was experimenting with a four-hour workday. “I’m trying to be really productive,” she says, and then defines what she means by that in a blog post aimed at helping other virtual entrepreneurs manage their time. “You cannot work harder,” she advises, it’s more about prioritizing. “Just turn off the computer at the end of four hours. This experiment is almost entirely psychological.”

It might seem that in the land of virtual companies, in a virtual economy, there is virtually no work getting done. But Yang and Sarmiento both exemplify the work ethic that typifies virtual offices.

“In a small company where people know each other and are dedicated to a cause or a calling, you can count on everyone to be productive,” says Yeh. But even a technology cheerleader such as Yeh doesn’t foresee a workplace devoid of stupid meetings and wasteful schedules. “The virtual office can cut down on the BS,” he says, “but BS is part of human nature.”

17 replies
  1. Jeff
    Jeff says:

    Nice article. Don’t forget Starbucks. It’s a “free” office to meet people or just to work for a few hours if you want to leave your virtual office to interact with other human beings. :-)

  2. Peneope Trunk
    Peneope Trunk says:

    Great point, Jeff. I think this is especially true in cities like New York City where people cannot afford enough space in their home for a decent work area. In the Starbucks where I set up my own little portable office there were many others like me and we were completely regular and felt more like office mates than some people I’ve worked with in physical, cubicle-laden companies.

  3. Toni Dennis
    Toni Dennis says:

    What is the best way to get setup with a company to start a job from home with a virtual company?

    * * * * *

    Unless you start your own virtual company, getting a job in a virtual company is not easy. You can’t know beforehand if the company is virtual unless you know people at the company before you apply. Most virtual companies are small. This means that your best best bet is probably to find someone in your network who knows about a virtual company and can recommend you.

    -Penelope

  4. Ivan
    Ivan says:

    Penelope,

    as you stated in your article, “a virtual business also gives people the opportunity to create the personal life they want”. This is the great aspect of having the virtual company, it provides time for anyone who has a family. It allows parents to tend to their children, manage their homes and all their other day to day affairs without having to leave the home.

    In many cases most individuals are now placing more value on the “time” they can spend with their families, and thus moving toward changing their lifestyle of the daily drive to work, to the prefered method of working online from their homes.

    In continung on, many individuals are now creating their own businesses and making a sizable income online. And the possibilities of generating good income is now very reachable to all individuals because of all the consumers now accessing the internet and looking for new products.

    In conslusion, the online world is a huge market place and any person willing to put forth the effort of establishing a business has the opportunity of creating a profitable home based business.

    Ivan

  5. Nicholas Sainten
    Nicholas Sainten says:

    A lot of small net businesses are pretty virtual already, with the whole team working from home and meeting face-to-face only intermittently. In fact, even a bunch of large outfits like FedEx are turning to virtual phone services like GotVMail or onebox to slash overhead costs. Sooner or later, we’ll be hard pressed to find an “undistributed” office.

  6. Safe
    Safe says:

    I manage several businesses. I find that having employees work remotely is a great. However, I have a policy that requires people to work in the office for 6 months before they are allowed to work remotely (with the exception of sales reps).

    People’s lives are so hectic these days that offering flexibility in work can lead to increased productivity.

    John – Stay Strong. Stay Safe

  7. Ted
    Ted says:

    Another option is the global company – my employer is so spread out that it’s kind of like working for a virtual company. I had an engagement with HP where I had a similar feeling – the attitude HP seems to have is that skills are skills and it’s when you are, not where you are. So, culturally they are very comfortable with running huge projects and never having the team physically meet. If you have the discipline and personality for it – it’s the best.

  8. Jonha
    Jonha says:

    Hi Penelope,

    This post is perfect except for the broken link in “could even be a blog”. You’re right about people wanting to have flexible hours and more control on their tasks.

    Suggestion: Will you please check at least once a month for broken links in your blog? There’s plenty of them. Like a link to your Wiki.

    Jonha

  9. Alan
    Alan says:

    I have to say that telecommuting or running a business of your own from home should be a give. There are so many types of employment that could be done at home, thereby driving down traffic, saving gas, saving employer expense,etc.

    The early part of the 20th century was considered the Industrial Age. We are now in the Information Age. Eventually, companies will need to come around and change with society by letting workers telecommute.

    I believe that is where we are headed in the future.

  10. Barbara Saunders
    Barbara Saunders says:

    The benefits for families are great. I think the benefits for singles like me are worth calling out, too. If the people you work with – and enjoy working with – are not the same people you’d socialize with, life can become pretty empty when you spend 8+ hours confined to an office and 2 hours commuting. At least if you have a family, you have built-in people and relationships “to come home to.” It makes life much easier to base the workday in the neighborhood and cultivate those non-family relationships.

  11. Ruby
    Ruby says:

    I currently run a daycare for the past 3 years, I am a single parent to 3 children, a teenager and twins that just turned 7 (boy/girl) and wanted to start my own online business for awhile, I recently got the chance and a lot of late nights (haha) opened up my virtual store. I hope with the extra income I may be able to take my kids on a vacation that they will truly enjoy and remember forever.

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