William Buist

There is no question that we are currently living in challenging times and in every recession there will always be some businesses that continue to grow and develop and others that will fail. In difficult times, perhaps more than at any other time, staying as we are is no longer an option if we want to survive and the reality is that we are left with just one choice, either to actively seek to continue to grow, or capitulate and see our business fail. It may be tough and we will have setbacks, but those who will succeed are those that can work collaboratively with others, achieving greater resiliency and opportunity.

Winston Churchill famously said “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty”. Similarly, building businesses virtually with a background of recession may be difficult, but it has plenty of opportunity.

What does ‘virtually’ really mean?

Businesses that have been built virtually don’t use a single physical location for their people to work. In virtual businesses, technology provides the infrastructure to define the operation of the business. Members communicate electronically as well as face to face, and technologies like social networking sites, project collaboration sites and so on, provide a framework in which to work. Telephone answering may be handled through an agency with calls off flowing to people in diverse locations using fixed and mobile equipment seamlessly.

Marketing, sales, advertising, operational activities, delivery, administration can all be passed between people (who may or may not be employees) automatically and the virtual companies prime role becomes one of co-ordination. Ultimately, though the virtual company still delivers a real product or service to a real customer.

The evolving business model

Success means that you have more clients, or more work from your existing clients, more pipeline, more administration, more need to support the delivery of your products and services. Generally this means that you need more people working for you, in your business, and delivering to your clients. When considering what you need to be doing to help your business grow virtually, a clear picture of what it will look like when you have achieved that is critical to making good choices today.

Creating a virtual team

Virtual businesses don’t necessarily do all of this in-house though. One way that you can resolve increased administration, for example, is to outsource it to virtual assistants, on-line book-keepers, design agencies, PR companies, whatever it is that you need. The web enables you to use tools to share files securely, video conference, share project plans and messaging and so on with a variety of tools that vary from entirely free to still very cheap.

The advantages of virtual employees is that they manage the administration of employment, as you don’t employ them, and you pay for the services that you use, not a salary that means you need to generate work when times are quiet. The hourly rate may be higher, but every minute is spent working for you and adding value to the business. Cost for output is usually much lower.

In the client facing roles, and dealing with delivery, a virtual team requires some infrastructure (branded emails, business cards and so on) but these costs are trivial. With a wide team of partners it’s possible to compete with big competitors by being agile and cost effective, using the skills of your partners when you win business and providing skills to others who win business for you.

Of course, you have to know that the partners you choose will deliver the level of service you expect and there are cash flow issues to manage too. When you win new business and use partners to service that work, who is carrying the credit risk of the ultimate client defaulting? There should be a premium for that risk, but if you are carrying it, you need to account for the possibility that you won’t be paid, but your suppliers still need to be. These are business elements that need to be factored into the arrangements up front.

We have always had written contracts with our partners, even those we trust explicitly, in order to avoid confusion, and this is no different for a virtual partnership.

How can you save costs and be more resilient

Smaller businesses and the self employed have taken to Social Networks for support and help and gradually also to enhance their marketing. Even if the business is currently small it needs to compete in the marketing pool for the attention of your clients, particularly in a recession. Right now, we have the tools to do this and we have the knowledge, and we have it way ahead of those focused on ‘old’ non-virtual marketing. It’s the best time ever to drive personal brand to the forefront.

I’m a great believer in doing the things that you control yourself, for example, I can’t control how many referrals I receive, but I do control how many I give. Measuring what you don’t control is interesting, but hard to influence, measuring what you do control allows you to change the things you do and measure the results, changing the activity until you get the results you want.

Making the world aware of you through virtual tools means that people become aware of you. In that pool of aware people are both potential customers and potential partners. Get it right and the partners will approach you as a result of becoming aware of you. It’s so much easier (and cheaper) to have your partners seek you out than it is for you to find them one by one. Through conversation and interactions you’ll build trust with some of those who approach you and over time begin to find that they advocate you and your business.

In that group you’ll find the suppliers and partners that share your own goals and ambitions, that want to help you succeed and will work closely with you to achieve those goals. Collaboration means that you’ll bring significant skills to bear on your clients needs, the right skills at the right time. From a customer point of view there’s real strength in being able to do that, in terms of retention and referral to others. In a recession when decisions are made more slowly, and with more care, personal referral becomes ever more important in being considered for the product or services you sell.

Creating a virtual team around you enables you to outsource those activities that detract from your ability for focus on your core value in the business, and provides you with instant access to the resources you need to respond to rapid changes in market demand (both up and down) seamlessly and effortlessly, and this is what will give you the real competitive advantage in a recession.

William Buist is director of Abelard Management Services, a consultancy specialising in improving team dynamics and performance. For more information visit www.abelard-uk.com

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