A Lawyer, a CPA, an HR Professional, and a Consultant walk into a room … You might expect this to be the start of joke, but it’s not. These independent professionals are teaming up on a multi-million dollar project. And so, a Virtual Company is born.
A Virtual Company is a collection of independent workers or small businesses who choose to collaborate on specific projects to unlock revenue. Examples of these projects include Corporate Restructuring initiatives, Mergers and Acquisitions, or even New IT System Implementations. Basically, many of the projects that were previously reserved for large consulting firms of business services providers, can now be pursued by a team of committed, highly trained, and a highly motivated small businesses.
Although Virtual Companies have been around for decades, technology has made the process of forming, hiring, and deploying Virtual Companies much easier in recent years. A recent study by the McKinsey Global Institute shows that the number of independent worker in the US is not only larger than previously thought, but also growing at a faster rate.
Virtual Companies have many advantages that enable them to compete effectively with larger, more established firms:
- Little or no overhead – Unlike larger firms that have fixed headcount, a virtual company can scale up or down based on demand and size of your network. In some cases, this allows Virtual Companies to pass the savings on to their customers and gain market share.
- Unlimited potential – Members of a Virtual Company can tap into each other’s networks to pursue new revenue opportunities. With the right planning, Virtual Companies can create a healthy sales pipeline that results in predictable revenue.
- Handpicked team – Virtual members have more flexibility to pick their teammates, and can hold each other accountable to deliver the highest quality work. That means that over time, the best Virtual Companies can be made up of solid A-Team players who can work like a cohesive unit.
Along with their virtues, Virtual Companies bring their own set of challenges:
- Team Compatibility – This goes beyond simply getting along. Although skills may be different, members of a Virtual Company should share a common philosophy that helps them collaborate. Just like you wouldn’t expect to buy a Gucci handbag at Walmart, team members should be capable of serving a similar set of customers, with similar expectations, even if each team member plays a different role.
- Timing – When looking to start a new project, it’s very possible that your usual “go-to” teammates are already busy with other projects. That’s why it’s important to build a wide network of trusted professionals that you can draw upon when the opportunity presents itself.
- Coordination – When collaborating with fellow professionals, coordination is key to the success of the project. For example, who will be the main point of contact with the client? When are deliverables due from each team member? How will billing be handled? Getting clarity upfront will avoid potential pitfalls in the future.
The gig economy is here to stay, and along with it, opportunities to build lean, but high impact businesses. Virtual Companies can be a great way to participate in this growing sector of the economy and unlock value for both business service providers and their customers.
Ramon Rodriguez is the Founder/CEO of Collaborate.Biz, an online platform that helps businesses unlock new sources of revenue by matching them with compatible, strategic partners. It’s “Match.com meets LinkedIn,” but instead of helping people date, it helps businesses collaborate. Jon for Free at http://www.collaborate.biz.