Several years ago I setup my first virtual business without being fully aware of that term at the time. Unfortunately I’d misread the market and the product that I thought would sell like hotcakes really failed to attract any interest from its target market. With a complete lack of customers, it was pointed out to me that what I had was virtually a business as opposed to the more desirable virtual business.
What is a virtual business?
Wikipedia conveniently provides a definition that is difficult to improve upon:
A virtual business employs electronic means to transact business as opposed to a traditional brick and mortar business that relies on face-to-face transactions with physical documents and physical currency or credit.
Virtual and physical
The continued rise of the Internet has caused numerous issues for traditional retailers where they have been slow to adapt to new ways of doing business. We are all aware of some of the larger virtual businesses than only exist in cyberspace, such as Amazon and eBay, but many traditional businesses have morphed into a combination of high street and online solutions, commonly referred to as bricks and clicks.
This cultural shift in how consumers shop has resulted in the decimation of many a high street up and down the country as players have been slow to change. Many lament the passing of how things were, but it is hard to ignore the revolution that the Internet has delivered for B2C transactions. Only the most nostalgic consumer would try and argue against the net outcome being a positive one.
Business to business
I think it is fair to say that in many industries, the race to embrace virtual business practices has been somewhat slow. Empires have been built on the foundations of the reliable handshake that sandwiches a face-to-face meeting, and some find it difficult to understand why something that has worked for a millennia or more might need to change – but that change is already here.
Typical issues faced when considering a B2B transaction might include:
- Identifying a supplier
- Confirming the supplier can deliver what you want
- Carrying out background checks on the supplier (references, credit checks, etc)
- Obtaining a quote
- Obtaining other quotes to be certain you are getting a good deal (and to keep the boss happy)
- Liaising with the supplier to ensure efficient delivery
The advent of the Internet has provided us with a plethora of tools that makes these sorts of interactions quicker, easier, and ultimately cheaper. It’s no coincidence that some of the largest companies in the world today were created by technical geniuses who saw how technology could be leveraged to create businesses that could scale in a way that had never been seen before.
Amongst the many tools the Internet has provided to change the face of commerce, is the ability for many to work from home. This phenomenon really started to take hold a decade ago and continues today, and for good reason – it can easily deliver a win-win situation.
For the business that secures most of its work online, plush, expensive offices in the middle of the city is an overhead that is no longer necessary as the client never sees your offices or sips your Gaggia brewed coffee. But not only do you not need offices in the Central Business District, you don’t need to secure floor space for staff that are never there.
And then the penny drops! If the staff are never there, then does it really matter where they are at all? The answer is typically no – but some big companies have managed to get this gloriously wrong. Ever called your bank and had a painful conversation with someone who doesn’t understand your Brummie accent, and you struggle with their’s? I’ve done this, I’m sure many have, and big business started to realise that outsourcing and offshoring customer service may have saved money, but the customer doesn’t like it. The public backlash still ripples, with companies proudly proclaiming their dedication to UK call centres (still not realising that the customer doesn’t consider that a particularly good customer service solution either).
But elsewhere, outsourcing has flourished. The IT industry has seen massive growth in outsourcing and other industries are starting to catch up. Not only can this deliver massive flexibility and cost savings to a business, but it allows them to tap into skills and experience from individuals who enjoy being able to pick and choose when they work and who they work for. There is a growing army of people who understand that they work to live, and not live to work, and are not predisposed for a lifetime of 9-5 for the same organisation – and they are typically well adjusted people, who will work hard to get the job done.
In an environment where good people are hard to find, and unpredictable workloads makes it costly to retain them, a solution whereby this problem simply disappears is one that increasing numbers of businesses are starting to embrace wholeheartedly.
Isn’t it time you took a look at growing your business through outsourcing? Your competitors will hope you don’t.