Pros and cons of starting a virtual company

Starting a virtual business has its pros and cons, which we’ll discuss today

virtual business


Office work in the twenty-first century differs very much from the typical settings of “The Office” sitcom. The pandemic has accelerated the remote working trend already popular for multinational teams. Thanks to technology and innovation, virtual cooperation is convenient for both employers and employees. Globally, 16% of companies are fully remote, according to the 2021 Owl labs study. Many companies all over the world are becoming fully or partially virtual. Starting a virtual business has its pros and cons, which we’ll discuss today.

What’s a virtual company?

A virtual company is an organisation that conducts all or most of its business via the internet. Using remote facilities and telecommunications, such a company works with employees and contractors from different regions. A virtual business may be either domestic or international. It usually doesn’t have regional offices, but may have physical headquarters. However, 100%-virtual companies have no central office at all. All the team, including top management, are working remotely in this case. Moreover, some virtual businesses operate exclusively in a virtual world (gaming software, metaverse, etc.). Whether the company has a physical office/warehouse or not, it is virtual as long as there are no physical locations to communicate with customers. 

Some bright examples of virtual companies are Amazon, Clevertech, Basecamp, Buffer, X-Team, Art & Logic, Automattic, GitLab, InVision, etc. Is it worth joining the ranks?


  • Genuinely virtual companies are the most cost-effective as they require no leasing or maintenance of physical premises. Even those hybrid business models with some bricks-and-mortar corporate offices still save money on customer service locations. In particular, scaling your business to another country does not require renting a new office/store. 
  • Virtual businesses may benefit from the flexible working schedules of their remote teams. For instance, virtual team members from different time zones may seamlessly provide 24/7 support to the company’s customers. In that case, employees don’t have to take night shifts to be always where the client needs them. 
  • Finding the right talent in your local community may be difficult. Virtual teams broaden the scale of your recruiting efforts to practically every corner of the world. Besides, employees don’t face the dilemma of moving to another city/country and leaving friends and family behind. 
  • Remote workers can work longer hours as they don’t need to waste time commuting. Surveys also show that employees who can work from home are much happier with their jobs.
  • The flexibility of the remote working schedule means fewer days off and sick leaves. For the team members, virtual offices create healthier work-life balances.
  • Team productivity increases when everyone works on their terms, without the ordinary office interpersonal conflicts, gossip, and other drama. It’s easier to concentrate and choose an individually comfortable working environment. 
  • You can access third-party services and experts without incurring expenses for travel, logging and downtime.


  • The lack of physical interaction between team members doesn’t let the team bond to a high level of synergy. The absence of non-verbal cues such as voice, eye movement, facial expression, and body language may complicate mutual understanding. People often misinterpret text messages. At the same time, modern video-conferencing tools partially solve this problem. 
  • It is harder to establish strong leadership via virtual communication means. 
  • Working from home-based devices often leads to compromising data security. It is harder to check whether employees are neglecting cyber safety measures.
  • Despite saving on a physical office, you may need to splurge on technology. Efficient remote collaboration requires advanced software and enhanced security solutions. 
  • Not all businesses and industries are suitable for virtual work models. E.g. organisations that deal with manufacturing, testing, or other manual work need a physical presence.
  • It’s tough to organise a meeting when your team members are working remotely, especially across different time zones. However, you’ll still need team meetings for important announcements and major updates. 
  • A flexible virtual environment can be very isolating for an individual. Socialisation is essential in human life, and virtual teams lack that. A new employee may struggle with some tasks or issues and not know where to find help. In ordinary office settings, there’s a place for more advice and mutual assistance. Casual meet-ups, chats, and virtual team-building experiences can help one feel a part of the team. 

SEE ALSO:  Managing virtual teams Top 7 businesses you can start at home10 tools for remote business owners

Nina Bobro

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Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.