A remote business seems like a win-win situation: without all the processes and responsibilities of maintaining a physical location, starting your company can be a lot easier and even more profitable. Just think of how much money you can save on rentals, equipment, and even taxes.
The COVID-19 pandemic has also forced many people to work or run their companies from home. But making your business remote still involves a tremendous amount of work—and it isn’t the right model for all entrepreneurs. Before you move forward with the idea, you need to understand the steps involved in starting and managing a remote business.
- Personal Productivity
Running a remote business is a dream for many people because of the freedom to work more flexible hours where and how they want (even wearing pajamas!). As the business owner, however, you must consider your own strengths and weaknesses as a manager to decide whether operating remotely would be conducive to your mission.
One common side effect of remote work is low productivity. With many distractions around (especially if you or your employees have family and small children at home), procrastinating becomes a dangerous habit. To work from home while staying focused, try to follow these guidelines:
- Separate the Workspace From the Personal Space– No working on the bed. You need a specific space to focus, as you would have in a physical company office. Confirm with others in your home that they will respect your work schedule and space.
- Organize the Workspace– Keep your home office organized, with a defined task list and a computer or laptop at your disposal. If you’re not among those fortunate enough to have separate computers for work and personal matters, make sure you keep the two distinct on your device using folders or separate user profiles.
- Control Hours Worked– Productivity means maintaining a healthy work routine. Try to identify, during a week, how many hours you and your team worked. Keep track of the number of tasks completed and the quality of work, and use the information to improve your team’s performance.
- Employee Classifications
Unless you can maintain your business alone, you will need to have a remote team of employees. It can be hard to conduct job interviews without the opportunity for face-to-face meetings, so make sure you have a system in place to sort through candidates and find the right people for you. Two common types of workers employed by remote businesses include:
- Full-time Employees– If you want to hire a full-time team, even remotely, you will have to comply with all local laws and regulations. If your employees are in different states, you may have to pay location-specific taxes.
- Contractors– Many remote companies use this option because contract employees handle their own income taxes. You can also hire freelancers for certain jobs.
- Company Values and Work Environment
One of the positive aspects of maintaining a remote team is saving on rent, furniture, office equipment, and supplies. On the other hand, it’s much more difficult to establish and control elements like company values and work environment.
Working from their own homes, employees may experience burnout symptoms, such as difficulty sleeping, depending on how much is required of them daily. Remote work also eliminates direct interactions between people, which can be difficult for some workers.
Productivity and engagement depend on employees feeling valued. Even remotely, try to connect the team beyond work to help foster a positive environment. Offering stipends for their work-related expenses like internet and electricity can also help establish you as an engaged and caring employer.
- Tech Requirements
Some remote companies require employees to use their personal computers for work. This policy can present a hazard to business security as private customer data can leak, for example. Ideally, your company will provide laptops and other equipment to employees to be used exclusively for work.
To maintain productivity, it’s also essential to define which devices and software employees should use. There’s nothing less practical than holding up your workflow through incompatible file-types or because two employees’ computers have different hardware configurations.
Also, ensure that all employees have access to the same communication and file-sharing systems, that they are protected and updated with the same security packages, and receive training in these tools if necessary. As an employer, don’t forget to create backups of all these systems.
- Taxes and Insurance
As a remote business, you will pay different taxes and need different forms of insurance than a physical business. But that doesn’t mean it will cost you any more or less.
Regarding taxes, there are specific rules for remote employees who live in the same state as the company, in a different region of the country, or outside the United States. All U.S. workers generally owe two types of taxes (income and payroll), which they must pay in the state where they live and work.
Even operating a remote business, you may provide workers’ compensation insurance to ensure your employees’ safety. Even if you already have insurance on your house, remember that the coverage is only for the property. For home-based businesses, you should also consider:
- Business Owner’s Policy– Also known as a BOP, this insurance can provide coverage for the part of your house where your business operates. Typical BOPs include general liability insurance, commercial property insurance, and business income. As an example, a BOP can cover damages or lost revenue if the property suffers damage from a fire or natural disaster.
- Business Owner’s Policy With Endorsements– You can also adapt your BOP to your company’s specific needs. For example, you can add data breach coverage if you work with customers’ personal information sent over the internet.
Remote Work Is on the Rise
Over the last 12 years, remote work has increased by 159 percent. Even before COVID-19, many new and well-known companies alike were transitioning to remote work.
Advances in technology make it possible to decentralize the business environment, save money, and open up employment options. However, this business model requires particularly strong leadership.
Without the limitations of physical office location, you can work with the best professionals in the country or even worldwide—you just have to make sure you know how to manage them effectively.
Author | Emily Forbes
An Entrepreneur, Mother & A passionate tech writer in the technology industry!