How to Start and Operate A Remote Business: A Guide
In this article, you will learn how to build and operate a remote business.
If you have ever thought about starting your own business, you probably considered a remote work model. More and more companies are choosing a partially remote work or going fully remote for various reasons. According to the study conducted by FlexJobs and Global Workplace Analytics, 85% of businesses confirm that productivity has increased in their company because of greater flexibility. If you are a freelancer running a profitable business, a remote work model is a good option for growing and scaling your company. We have prepared the following guide to help you learn the basics of operating a remote company.
What is a remote business?
Remote business is a form of business activity that allows you and your team to run your company from anywhere in the world without being confined to a physical office. All communication and processes are managed through the Internet.
Remote management is not just a trend or buzzword, it’s a form of a business model that works for entrepreneurs who want to attain more freedom and control over their lives.
With the development of technology, organizing a business is no longer a tedious task. For example, it is relatively easy to build a virtual business from the ground up. There are countless online stores, personal websites and blogs selling various products: from tea, accessories, and apparel to information products and ebooks.
Benefits of going remote
A 100% online work environment is becoming increasingly popular due to particular advantages.
First, there is no need to rent an office and hire staff for its maintenance. To start a traditional business, you need to find an office (which is not so easy because you want it to be conveniently located), buy furniture, equip it, pay for janitorial services, internet support and office supplies. Secondly, you may save money on taxes. For example in the US, when hiring an independent contractor, businesses normally do not have to pay Social Security, Medicare and Unemployment taxes on payments to them.
Besides, independent contractors don’t have access to traditional benefits, such as health insurance, unemployment insurance, and others.
Note. A contractor may have less loyalty and commitment than an employee, which may entail lower productivity.
Thirdly, remote work allows you to work on your own flexible schedule from wherever you want. The only condition is having access to a high-speed internet connection.
Another benefit of running a remote company is an opportunity to tap into a global talent pool. You can increase your chances of hiring the best specialists by scouring foreign freelance marketplaces.
Tip. Make sure you can comply and meet local regulations before hiring a foreign remote worker. As an employer, you are accountable in two different tax and payroll systems.
Remote work challenges
Here are common problems in operating a remote company.
- Staying disciplined
Remote work requires discipline and a high degree of self-control. There is no supervising manager who would orchestrate your work. You are your own boss. You are the one responsible for the output, and you have to find and set a work style that fits you. You are also responsible for your team’s output and coordination.
- Lack of communication
In a traditional workplace environment, you meet with your colleagues every day. You work in one office space and even if you don’t talk to each other often, you still feel that you belong to one team. With a remote team, you may feel that you have a little control over what they are doing. However, the thing is a business owner doesn’t have to take part in every single workflow. Building trust within a team is the priority. This is not a trivial task when starting a business based on a distributed workforce. Your company’s success depends fully on how effective your communication is.
- Technical issues
Many entrepreneurs prefer to manage their businesses from the road. While this became a common practice, it’s hard to foresee such troubles as laptop’s damage, breakdown or slow internet connection. So, you need to devise an action plan anticipating the problems before they arise. Invest in an external wireless card or get a travel router to make sure you won’t miss a deadline.
Choosing a business entity
If you haven’t registered your business yet, it’s time to decide on registration type. It means that you have to choose a type of entity for your business. The type of entity defines the way you pay taxes and your personal liability.
A sole proprietorship is a perfect option for businesses with little to no liability risk. Since the entity doesn’t provide liability protection, there is no difference between business and personal assets, meaning that any individual or company can reach the business owner and the owner’s assets. If something happens to your company, e.g. lawsuits, you’re financially and legally liable for any losses your client’s business incurred.
As a sole proprietor, you can hire workers without limitations on the number of employees. You can hire independent contractors, which gives you greater flexibility since they are not employees and not entitled to benefits.
In case the workers are classed as employees, an entrepreneur must have an employer identification number (EIN) before hiring. Employers must have their employees fill out a W-4 form to know how much money should be withheld from their paycheck.
Another common entity type is a limited liability company. It’s one of the most popular business structures because it allows business owners to separate their personal and company’s assets. If you’re a sole owner of your LLC, you’re considered self-employed just like a sole proprietor and the income you generate is not a salary.
Other business entities include S-corporation, C-corporation and nonprofit corporation which are good options when the company grows fast. Familiarize yourself with federal, state and local laws considering hiring remote workers. Keep in mind that some business activities may need a permit, e.g. logistics and alcoholic beverages.
How do we operate the remote business?
Every company has business processes. These processes reflect how the business operates. They define whether your company will be profitable. If you don’t focus on the business process, you may fall behind the competition.
Making a good product and providing excellent customer service are important facets, but today it’s not enough due to a large number of companies selling high-quality products at affordable prices.
How does one can stand out in a crowded market?
The answer is business process management.
Leveraging business process management helps you understand how the company works, its workflows and why you need to implement these workflows (or why you don’t).
Why you need business process management
Strong business processes can boost productivity. When operating a remote company, we need to better understand the workflows that make up the core of the business. Each process has a specific goal and consists of a sequence of planned actions. This eliminates the chance that you’ll waste time doing unnecessary tasks.
Secondly, BPM allows building a business that is not fully dependent on people. A business that relies fully on the business owner or their assistant is not sustainable. What if the assistant decides to resign? The whole company’s productivity would be put at risk. Instead, you build a business based on streamlined documented processes.
And third, different departments can collaborate easily, knowing their roles in each workflow. Things go smoothly when everyone is on the same page, right?
Business Process Mapping
A business process is a sequence of repeatable steps performed by a team to deliver a service or product to customers.
For example, here are some typical processes:
employee payroll process
customer onboarding process
The first step to managing your business processes is to visualize them. It’s called business process mapping. To help businesses understand their internal procedures, the Business Process Management Initiative (BPMI) developed a standard Business Process Model and Notation (BPMN). BPMN uses a set of standard symbols which represent different activities.
Let’s map out a client onboarding process.
- Every business process has a start and end points. In other words, you have to identify the limits of the process. Where does the process start and end?
- Draw the main blocks representing sub-processes that must be executed during the process.
- Add gateways reflecting a decision step.
- Define participants. You can use specific elements called swimlanes for that. Swimlanes divide roles or responsibilities in business workflows. One employee can take on several roles and vice versa, many employees can perform a particular role.
- Add documents and databases.
- Set key performance indicators.
- Indicate how this business process relates to others.
How to automate processes in a remote business
Business process automation is the automation of routine tasks through technology.
Applying automation will significantly reduce errors in such workflows as accepting orders, invoicing, inventory management, shipping etc. Moreover, faster turnaround times allow you to free up your workforce and operate the business efficiently.
Implementing business process automation is a long process. First, you should identify which processes need to be automated. Then optimize them if possible. After that, choose software and perform an API integration. API is a set of tools that connect and synchronize different applications, databases and programs. For example, it’s easy to import contacts from your CRM system to an email marketing software and send email campaigns using the leads.
Make sure you test each solution with a small or limited number of users before implementing it.
To begin automation, consider taking simple steps to focus on one process. It’s important to answer the following questions:
What business processes do you plan to automate?
What’s the purpose of automation? E.g., human error prevention.
Will the software work for you? Does it combine all the features you need?
Is it easy to use?
How much will that cost?
Is there a way to integrate it with other tools?
Is it possible to quickly tweak or change the tool without disrupting the whole process?
Who will provide tech support?
The final step is monitoring and supporting processes along with using metrics to measure progress. This gives an overview of bottlenecks and provides a starting point for improving the system.
Keys to creating and managing a remote team
When hiring remote contractors, remember that remote working style is not for everyone. Therefore, make sure that a candidate has relevant working experience or at least feel comfortable in a fully remote work environment. The ideal candidate has a strong work ethic and can act independently while adhering to the company’s policy and procedures.
Traditional office culture has its perks. If you don’t know something you can always ask. You know who you can ask because you know your colleagues and what they look like. In an office space, employees seamlessly get involved in the workflows and are better engaged. All these things become harder to maintain when running a remote business.
Here is what a remote business owner can do to set up a viable team.
- Create an internal knowledge base where team members can find all work-related information, including technical documentation, business process descriptions, meeting notes, a staff manual (or employee handbook). Documenting processes is time-consuming, but the time is well worth it as it helps avoid situations when you answer the same questions over and over.
- Design an employees profiles page. Each profile should contain an employee’s work schedule, time zone and information on how to contact them.
- Think of socializing. In an office environment, informal communication emerges naturally. Remember that people are social-beings and even short eye contact with a friendly smile connects us. Consider hosting regular virtual meetings where team members can bring up topics outside their job duties.
- Match time zones. Does your business require constant and active collaboration? If so, a large time difference can be detrimental to the workflows. Find overlapping hours when everyone is available for online meetings.
- Don’t micromanage. Remote workers work hard and often suffer from burnout. Effective leadership comes with confidence in your team’s professionalism and the creation of a trusting culture. Delegate tasks to encourage people to advance towards the desired position.
Building a strong culture must be your top business priority. What is culture? It’s a sense of emotional connection and having something in common with your colleagues, based on shared experiences and the time you spend together. A remote company has a strong culture when a team member is not afraid to articulate boldest ideas and get constructive feedback. Communication is a cornerstone in a remote business’s daily operations, so try not to lose sight of weekly/daily check-ins and clearly defined feedback mechanisms.