How to Build and Scale Virtually from anywhere in the world Pt 2
Osita James
Managing Partner @BlackCrest Law I TEDx Speaker I Business Coach | Chevening Scholar '22 I Human
Welcome to a new edition of Building Digital Products (BDP).
You can catch up on the previous edition here.
If you are reading my newsletter for the first time, welcome.
You can subscribe to the newsletter for updates here.
Building Digital Product (BDP) by Osita is a monthly newsletter that supports founders, investors, and startup enthusiasts with insights and principles on how to build better products and startups.
This is my 24th edition and seventh edition for the year.
BDP's theme for 2024 is "Resilience."
Here is a little snapshot of me.
Osita James is a technology entrepreneur and a partner at BlackCrest Legal. The start-up advisory law firm (BlackCrest) has successfully advised start-ups across Africa in investment deals worth over $20 million. He holds an MSc in Innovation Management and Entrepreneurship from the Nottingham Business School, Nottingham Trent University , a bachelor of law from the University of Nigeria, Nsukka and a Diploma in Technology and Innovation from the Nigerian University of Technology and Management . He writes poetry and fiction in his free time.
He supports African founders with professional legal and start-up operations advice and can be reached at [email protected] or here.
Today's edition will be a continuation of the previous edition on how founders can build their startups and scale virtually from anywhere in the world. In an increasingly modern and connected world, the ability to create value virtually is endless. This edition explores how founders and business owners can tap into this for growth.
Great leaders understand that in remote work, it’s not about micromanaging hours but empowering results. - Richard Branson
The business structure adopted in managing a virtual operation can impact the organization's ability to scale, tax liability and business opportunities. I recommend reading the first edition before jumping into this one.
After the business structure is chosen, the operations will then be planned out. In this edition, I will explore virtual operations from three pillars, payment, team management and scale.
1, Managing payment for your virtual company
If you incorporate a company in your country of residence, it makes sense to open a bank account in the country of incorporation. You have access to a physical branch of the bank and can refer any complaints to the bank directly. In a virtual operations setting, you will have to open a bank account virtually.
Many countries require you to have a residence permit to open a business bank account but some countries allow the creation of bank accounts by foreigners who open a virtual company in their country.
According to Wise, a non-resident LLC owner needs the following document to create a US bank account:
The Banking Platforms that currently open bank accounts for non-resident LLC owners to accept payment from the US are the following:
Some countries have restrictions from creating a US bank account because of existing US sanctions. They include:
For updates on the countries added, you can check the US sanctions list here.
The USA is not the only country that allows non-resident virtual company owners to create a bank account, Estonia, Singapore, UAE, Canada, the UK, Switzerland and Germany also permit this.
After the bank account is opened, the payment system still needs to be set up. Bank accounts serve as a central point of payment settlement, using a bank account to receive payments as a business looking to serve a global market is very inefficient. Payment processing platforms help with this.
The top payment processing platforms are
The payment processing platforms usually have APIs (digital systems that can be added to your e-commerce platform or solutions platform). These APIs will then call their system to accept a payment every time you have a new customer.
Payment processing platforms are crucial to scaling the business virtually. With this in place, you can focus on marketing activities and completely automate payment collection from your customers all over the world.
2, Virtual Team Management
A virtual team is not the same as a team working from the office. This means that the way you manage your virtual team also has to evolve. The most critical component for effective virtual teams is communication.
According to the Harvard Business School:
Weak communication and misunderstandings during virtual meetings can give way to resentment and rifts when the cameras turn off.
Communication has to be clear, accessible through an agreed channel and regular to be effective.
Here are some tips to improve communication for virtual teams
a, Choose easy-to-use communication tools.
You don't want to use teams if most people on your team don't have a corporate background. Using Google Workspace may be more familiar and overall easier to use. Ensure you also create tutorial videos or documents that make it easy for the team members to learn how to do different things in the company. Many virtual teams use Notion. If you have an extremely low budget you can use Google Keep but you may have to manually add your team to every single keep note of relevance. Platforms such as Slack can also be used for easy communication.
b, Create clear expectations
Remote work comes with a natural tendency to ignore work-life boundaries, to mentally coerce people to jump on meetings while eating, to complete tasks at odd hours and to schedule calls early in the morning. Setting clear expectations can be super helpful here.
Don't allow your team to make assumptions or guesses or what is a business priority. Tell them explicitly. You can do this using the OKR framework. You can list out your Objectives and Key Results and further break them down into the expectations you have for each team.
c, Create review and tracking systems for team priorities.
You can use basic Excel sheets or use advanced task-tracking platforms like Trello. Your team should be able to track their performance over a period of time. The more clear the task is, the easier the task will be to measure. Progress measurement should not be exclusive to the marketing team that runs marketing campaigns. The operations team should be able to measure the speed of service delivery over a period of time. The finance team should be able to measure cash flow and identify insightful trends that will inform future business decision-making.
d, Create team-building activities
You should strive to create a healthy work culture for your team. Team building activities can help your team members get to know each other, and improve confidence and overall team communication. Team building activities can be hosted remotely through platforms such as Codenames, JackBox games and The Question Game. Some teams also meet in person when they live in the same cities. You should choose your activities with consideration for your budget, the location of your team members and ease of planning.
e, Take time-zone differences into account when scheduling meetings
Your team members will likely live on different continents when you run a global virtual business. This means that the time zones will differ for some members of your team. When scheduling meetings use platforms like Zoom and Google Meetings which automatically convert meeting times to the time zone of all participants.
f, Make operations information easily accessible
The most efficient virtual companies have playbooks for everything. They have playbooks for hiring, playbooks for partnerships, and playbooks for sales and operations. The more information you document from your lessons operating your business, the easier it will be for new hires to follow the company's workflow.
Little things like documentation can make a difference in operational efficiency. Naming each document after the client it relates to, the date of the workstream and the department it pertains to can save you hundreds of hours in operations.
Some platforms like Teams and Google Workspace make it easy to organize information. You can create topic-specific folders. You can further create sub-folders to separate the topics by year and then each year will contain the older folders relating to different workstreams.
The documentation can feel like a lot when you first do it, but once it's done, it will serve you throughout the lifetime of your business.
I had the opportunity to discuss remote team management with Mary-Esther Anele, the co-founder of Inclusive Remotely, a platform compiling global remote work opportunities for globally underserved talent. You can check out the session by clicking here or the image below.
3, Scaling Virtual Operations
After you have established your company, set up payment and operations. When you have sold to over 1 million customers, you may start considering scaling your operations. In this part, I will be discussing scale from three pillars: Sales, Talent management and Taxation.
a, Sales
Every company is created to sell a product or service in exchange for value. Sales is therefore one of the core functions in business. Without sales, the company won't have resources, will not improve the product and will eventually wind up.
Sales in a virtual company are usually automated. In the early stages platforms like Facebook and Google can be leveraged for marketing to obtain leads which are then converted through the company's sales process. At this stage you probably have data on the locations of your return customers, data on how much product each customer has bought and the lead conversion rate.
In later stages, you not only need basic data on your customers but also have to actively manage relationships for long-term and short-term conversion. Sales teams of large operations need a customer relationship management suite.
According to LinkedIn’s State of Sales 2021,
Over 68% of respondents stated that their CRM system was “very important” to closing deals.
Most CRMs have features such as:
client contact management
b, Talent Management
To scale operations, a business usually has to hire talent. Note startup models cannot scale sustainably if they hire a lot of talent as the business grows. They have to hire as many as needed and actively manage operations to reduce the overall cost of service delivery. The same should also apply to you if you are thinking of building a sustainable global operation.
Who should you hire?
Who depends on your industry, your operations and specific needs? You may need a CFO if you have operations in over 10 countries and need someone to manage finance for the subsidiaries of your operation. You may need several operations associates if you have over 10,000 businesses that you service with software, who require personalised services and have evolving needs.
Ensure you take into consideration the previous experience of the talent, the network of the talent and the talent's core interests.
c, Taxation
Taxes evolve with a company's operation. Many countries have a company's income tax that applies to the profit of the company. As you grow and desire to scale, you need to consider the tax implications. The more countries you operate it, the more tax liability you are likely to incur. Operating in several countries that do not have tax treaties might also lead to double taxation. Ensure you consult law firms like BlackCrest to support you with tax advisory as you scale.
The best countries to do business from a tax liability standpoint are:
BDP Recommended Reading List
The BDP-recommended readings were carefully selected for relevance, insight and ease of reading. If you want to build a global virtual business, start from here.
Conclusion
In this second part, I have discussed the implications of scaling virtual business operations from three pillars: Payment, Team management and Taxation. Companies that have virtual operations have to communicate effectively, choose the right digital systems for their operations and hire the right talent. Effective building always requires effective planning.
In all you do, keep building.
Remember that you only fail when you stop trying.
I am rooting for you.
If you loved this edition, please share it with another founder.
Keep building,
Osita.
PS: I am going to be offering a free 30-minute business strategy and clarity session to 5 Rwandan founders through August.
How to qualify - Repost this newsletter and comment "I am interested" below and I will send you my calendar link to schedule a time.
Author| Serial Entrepreneur| Founder, Seavonne Belle Community
5 个月I had to read this twice to understand better & get more insights, thank you Sir for this .. in regards the sales aspect mentioned i have two questions to ask, i just need clarity on what you think.. The first is how can early-stage virtual companies effectively utilize data on customer locations and purchase history to optimize their lead conversion strategies? And Secondly, what are the best practices for leveraging platforms like Facebook and Google for marketing in the early stages of a virtual company, and how can these practices be integrated into an automated sales process? Thank you.