Time is Money - Get the Most Out of It

In one of my blogs I mentioned the savings to be realized when a business outsources its non-
core functions. Some Readers got back to me and asked to be a bit more explicit.

As I mentioned, when an entity decided to go virtual and give up all in-house non-care functions,
it results in significant savings and convenience. Cost savings on overhead costs can add up to
about 25-50%.

Decrease in your spending (direct or indirect costs) results in increase in net income. As net
income increases, taxes paid may also increase a bit. Businesses often fully or partially reinvest
the savings. The entity may be able to hire another professional, spend more on marketing, or
increase some salaries to match the market.

Going virtual also assists with increasing business mobility and data mobility. A new
subsidiary or a temporary workstation can be opened anywhere in the world without worrying
about staffing the back-office. Think about what happened with small businesses having all their
data in an “old-fashioned” server room after hurricane Sandy hit just a few weeks ago. Some had
to stop operation for days, weeks. Some might have lost their data for good. Productive time lost
means revenue lost.

In most cases, when non-core functions are outsourced, all records can be looked up using
smartphones or Ipads. Even in case of a natural disaster, like Hurricane Sandy, the entity may be
able to continue operation at least at a lower operational level, but with full back-office support.
Payroll can be processed, invoices can be sent out. Clients can feel you are there for them.

Flexibility to add “ad hoc” or short-term services, like assistance with development and
submission of an incurred cost agreement, costing a proposal, updating a web site, working on
an entity’s full profile (logo design, SEO, etc ). There is no need to advertise, ask around and
separately contract with a business consultant experienced in the field. It is just a phone call or
an email away. There is ultimately less time to complete the task since we know your business
anyways.

Finding a specialist for full-time hiring by advertising would cost only a very low hourly rate
(or be part of the monthly fixed fee). A well-versed HR professional can place the necessary job
posting on several search engines and do the prescreening of the incoming resumes as well. It is
part of the HR service offerings. If a very high level professional is to be found, a smaller fixed
fee may be involved.

A very important point is the significant reduction in the risk of financial fraud (i.e. check
tampering, just to mention one). The great majority of employee fraud cases are committed at
small businesses and non-profits. These are the businesses that also can’t afford such financial
and reputational loss – let alone the cost of a full scale investigation. A well-versed virtual
provider has some risk management and mitigation efforts built in the system. Also, since a lot
of things are automated, such as depositing checks and processing payments, without cutting a
single check, it is more difficult to “play” the system.

Flexibility in the structure of the virtual service agreement is also unique. Usually the Client
signs up for bookkeeping services as a regular service provided. However, most Clients want to
have the option to use HR and tax services as a needed addition at least. The contract can spell
out the hourly rate or the monthly fixed cost of such services. There is no obligation to use these,
but it is easy to do. Since the rate is already set, it is just a call or an email and any such services
are provided immediately, without separate addendum or modification to the active contract.

And last but not least, there is a way to reach someone during the weekend or late in the evening,
should there be a need. Since all records are placed in “virtual folders”, we can pull those and
discuss any business matters any time. Our business is open when our Clients are open.

I hope this blog posting was able to shed some light on the benefits of using a full-
scale virtual consulting company. As always, please email me if I can be of assistance
(spacher@myvirtualcorporate.com).