The Virtual Business: Taking Small Business to the Extreme

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Jun 10, 1997

Are you a small business by choice with the corresponding philosophy of "small is better" and with the efficiency and orientation required of a small business or are you a large business which just happens to be small because you haven't got enough customers? If the former, let's take the "small" to extremes.

In the extreme case, you'd be a sole proprietorship (not incorporated, just you, carrying out a commercial activity). You'd have no employees — everything that is needed to be done would be done under contract. You'd have no facilities unless you personally owned them to produce something you enjoy doing yourself — if you needed to produce something else, you'd contract out to someone with the corresponding facilities. You'd have no offices besides an office in your home and if your business required a formal location to meet customers, you'd rent that.

If this sounds primitive, it doesn't have to be. With call answering, call forwarding and voice mail you can run an efficient office without staff. If you absolutely need a human being available on the phone all the time, contract with someone suitable to provide the service. A private web site can act as a virtual office for posting information for your contract partners while your public web site publicizes your product for existing and prospective customers.

The main reason for operating in this way is low operating costs. You will have low operating costs not only because the costs themselves are low but because, although your business volume can be substantial, the parts of the business linked by contracts are so small that they don't show up as companies for the various levels of government. This avoids the huge costs linked to all forms of government regulation.

To get more details on how to do this — that's a problem. Although some companies claim to be "virtual" companies in the above sense, when you look closely it's usually still a bunch of guys in suits getting together in an office. Try searching for "virtual business" in Yahoo to see what's out there (try searching for "vitual business" and you get a long list of businesses which can't spell). Has anyone tried anything along these lines or know of such a company? Use the "Discussion" feature at the bottom of this article and let's see if we can get something going.

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