T-vom by The Numbers

The Virtual Office Model is an integrated approach to running a complete business platform in the virtual world. At its core is the idea that physicality costs money. Physicality is anything within your operation which is tangible. If you can touch it there’s a price tag attached. The more you can avoid it, the more likely your start up is to succeed and the more profitable your operating business will become.

Physicality costs money because it sucks cash resources when you acquire stuff and adds overhead to finance, maintain and manage the stuff you acquire. Overhead is any cost incurred by a business which is not directly related to the production of the product sold. In other words, overhead is poison! Overhead is to be avoided like the plague!

The worst part of physicality is it’s like a rabbit on hormones. It multiplies and gets out of control.

Say you start out with a small office location with 2 ordinary desks for yourself and your partner. The phone starts ringing on a regular basis and before you know it you can’t field all the calls yourself. Your productivity suffers so you hire a receptionist. He’s not that busy but you figure he can fill his time filing all that paper you’re generating by printing paper copies of the presentations you’re creating on your word processor.

Then clients start coming in and you can’t meet them over you’re banged up old desks so you remodel. You build a conference room and replace the furniture. You can’t use your nice new offices to ship your product so you build a shipping room as well. But you don’t have the time to ship your stuff anymore so you hire a shipper.

The shipper isn’t really busy all the time. Let’s face it, it was too much for you but it’s not really a full time job. So when he’s not working he comes in to visit the receptionist. Suddenly both their days are full. You can’t tell your staff they can’t talk to each other, It’s bad for moral but the work isn’t getting done. So you promote the receptionist to executive assistant, the shipper becomes your shipping manager and you hire a filing clerk and an assistant shipper. Suddenly you have a staff of 4 and there’s no place for them to eat so you build a lunch room…….you get the idea. All of this happens in the name of growth but all you’re really doing is building overhead and damaging your bottom line.

The people out there who haven’t run a business are probably saying “no way, it’s too dumb” but I’ll bet most of the people who have run a small business are smiling. Managing growth is a difficult problem. You can’t do everything yourself but its almost impossible to match your workforce and expenditures to your real workload and available cash.

What’s missing from the conventional business environment (especially for start ups and small businesses) is elasticity. The ability to have your infrastructure adapt in precisely the amount required to contend with rapidly changing demands. For many if not most business concepts, T-vom provides a solution.

For those of you who are not familiar with it, SCORE is an invaluable resource for entrepreneurs. It offers a wealth of information, financial worksheets and mentoring to both small businesses and start up ventures.

A review of the SCORE template covering start up expenses reveals that 6 of 8 categories and 23 of 32 specific items can either be completely eliminated or significantly reduced by adopting a T-vom platform for your business. How much easier would it be to get your business off the ground if you could cut your start up costs by 60 – 75%?

In an analysis of over 36, 000 sole proprietor businesses, Bizstats.com reveals that the average small business runs a gross profit margin (sales minus cost of goods sold) of between 77% and 81% of sales but then consumes between 41% and 48% of every dollar sold in overhead expenses! Going through the line items reveals that about 71% of these expenses, representing 34% of sales are tied up in what I referred to earlier as physicality. Imagine the impact to your bottom line if you could effectively add back 34% of every dollar sold. That’s what T-vom can do for you.

On top of all that, operating your business on a T-vom platform is green. Without the physical elements, your carbon footprint will be radically reduced. That’s a nice statement to be able to make and it’s good for your grand kids too!

So what’s the catch? You need to get your head around the concept and learn some new software. That’s not easy for most people but I think it’s worth the price of admission.

The results of our TVE survey seem to make this clear. The concept of a virtual office as a topic of interest scored high to very high with those who are generally more experienced and skilled. Less skilled or experienced readers were very interested in virtual meetings and internet communications which is the glue that binds the other tools into a viable business platform. These respondents expressed less interest in the topic of virtual office structure. This is pretty much in keeping with my anecdotal findings where novice business owners or individuals with only casual computer skills were actually shocked that a comprehensive virtual business model was possible.

To understand the T-vom concept you need to think technology not as a collection of individual tools but as components of an integrated environment. T-vom is like your kitchen. You cook on a stove and bake in an oven but all of your kitchen tools taken as a whole, results in an efficient environment for the preparation of meals and its value in that light is greater than the sum of its parts.

A typical business in the real world can be thought of as having a front office where it has a place to greet clients and visitors in addition to meeting rooms where conversations can take place and products can be introduced, demonstrated and promoted.

It also has a back office where the gears of the operation turn. A typical back office includes design, production, logistics, sales, marketing and administration.

The front and back offices are connected to each other and to clients, vendors and advisers using communication and meeting facilities.

Look around this imaginary office and you begin to realize that there is not one thing in it or even one function that cannot be replicated in virtual space.