Technology Insurance: Pros & Cons of Virtual Companies
Many businesses now rest solely on electronic information. The Wall Street Journal estimates the amount of electronic information in the world doubles every two years.
The availability and nature of the technology industry allows many companies do to just that; become entirely virtual. Gone is the need for cubicles and conference rooms. Skype & DropBox, a desk in your apartment, and a cloud server can fulfill your needs just fine. Technology, rather than walls and water cooler banter, hold a company together. Gene Marks recently profiled his virtual company in Forbes: here is why he chose to go virtual:
“My company provides technology consulting, which is a typical virtual company description. We specialize in sales and marketing technologies, particularly customer relationship management software… Except we’re really not together. That’s because we have no offices. We used to have offices, but I shut them down a long time ago. I decided to do this because every morning I would open up the doors, sit behind my desk and wait…for no one to come. All of our people would be out working at our clients. Or they would just work from home, because that was easier.”
Marks’ company functions on about 10 employees, some full time and the rest contractors. They get together once a year for a holiday lunch.
A virtual company saves astronomical amounts of money. There is very little overhead cost, no utilities or rent, no company luncheons or office maintenance costs. Geographical location is no problem, giving you a wide expanse of talent to recruit from literally across the entire globe. It is a formula that the technology industry is uniquely suited for.
There are trade-offs to the virtual business model. Opponents argue it could cut down on innovation and the natural collaboration that emerges when people physically work together. You miss out on developing the camaraderie that creates a strong team. There is the basic human aspect. You don’t get to know your co-workers, or really develop relationships with them outside of business.
What is your opinion of the virtual business model? Is the cost-effectiveness worth the trade-off in traditional face-to-face relationships? Let us know your thoughts!
Regardless of your business model, you’ll want to protect your business and your employees. The Technology Industry faces an array of complex challenges and risks – from physical damage to reputational loss. As specialists in this sector, Sinclair Risk & Financial Management can provide your firm with the experience and expertise in risk consulting, Technology insurance solutions, and claims management. Contact us today.