According to Wikipedia, a virtual business is defined as a business that uses electronic means to transact business as opposed to traditional brick and mortar business. A virtual business uses the internet as the major source to conduct all the business. It generally has no physical premise to have face to face interactions with customers. Today, Amazon is recognized as the largest virtual business in the world with about 800,000 employees.
The advantages offered by virtual businesses are very attractive. The following are the major advantages, discussed in brief.
Since most of the virtual businesses do not require a physical workplace, the company saves a lot of money in the form of overhead expenses like building lease, rent electricity etc.. We all are aware of how American Express saved around $15 billion by hiring remote employees.
Virtual businesses do not require huge investments. This is why virtual businesses are popular among startups. Technological advancement and improved affordability have truly developed an entrepreneurship culture. You can start a business with literally zero investment by building your website for free using WordPress.
Since employees would have a flexible work schedule while working from home for a virtual business, they will have a better work-life balance. A better work-life balance means more employee satisfaction and hence it leads to more productivity. This also leads to better employee retention. But work from home also has a few disadvantages. The major shortcoming is that employees are prone to too many distractions. You can check this blog on 6 ways to avoid distractions while working from home
WIDER TALENT POOL
A virtual business allows companies to hire workers from any part of the world. It gives a wide range of options to all the businesses and hence they get the best employees from around the world. Virtual businesses have been very successful in overcoming all the geographical barriers.
We already know that virtual businesses save a huge amount of money by cutting overhead expenditure. Companies can invest the money thus saved to improve their growth potential.
In my next blog, we will look at the major disadvantages of virtual business and a step by step guide to start your virtual business.