Work at home: How one company survived by going virtual.

An executive at a small start up figured out how working at home could save their foundering company.

At one point in my career I found my self Chief Information Officer of a small start up company, struggling to make ends meet. We were burning $50,000.00 to $75,000.00 per month and not quite making that in *gross* sales. We were depending on investors to fund the business and investors were getting harder and harder to find. It looked like our little business was not going to make it.

He crunched some numbers and found that by going completely virtual, letting all employees work from home they could close their offices and cut their monthly costs by more than half. They did have to let go of some “non-critical” employees but the main savings was in closing their office.

They set up a system to allow everyone to communicate, share files and hold meetings from their homes. Now the business was running fully virtual.

Everyone was working from home and I might add, *loving* it. Soon after we were under way we ran into a nasty problem. We learned that our employees (the critical ones who we highly depended on) found it too much of a temptation to watch TV or handle domestic affairs (being at home) rather than really dedicating the time we were paying them for to working for us. Gradually it got so that no live person would (almost) ever answer our phones. Our clients were not being taken care of. Sales was dropping (which was already a problem). We (I) started to think that I had made a mistake and that this was not going to work.

They ended up setting up a system to track their employees’ productivity and changed the pay structure to be based on that. The emphasis was not on how long they worked but more on how much they got done.

Our sales and operations were much better than it was, even when we were in the office. Everyone was accountable to the whole company for their actions. Good work was rewarded (mostly with money but also with promotions) and bad (or lack of) work was penalized (sometimes with the loss of their great ‘work at home’ job).

The company is still struggling, but still in business. They probably never would have made it without going virtual.

Tags: telecommuting, work at home