On a chilly Monday morning in early February, 30-odd reporters, editors, designers, and the rest of the sundry crew that makes this magazine gathered in a conference room to discuss our next issue. These monthly meetings are typically a time to talk about how stories are coming along, plan art assignments, and make small talk. But this meeting was different, because the issue we were planning -- the physical magazine you are holding in your hands -- would be produced by a company that was not itself entirely physical. When our meeting concluded, we walked back to our desks, packed our things, and headed home. Our experiment had officially begun. We were temporarily turning Inc. into a virtual company.
Everyone fantasizes from time to time about ditching the office -- the commute, the cubicles, the bad coffee -- but it's probably fair to say that leaving this particular office was a little bit harder for the Inc. staff than it would be for most companies. We have probably the nicest offices of any magazine in New York City. We occupy a high floor in a new $700 million building. Our space has floor-to-ceiling windows and views of the Statue of Liberty and the Empire State Building. We rent this place out for photo shoots.
Moreover, magazines seem especially resistant to all things virtual. This is a traditional business that concerns itself with traditional things. For more than 30 years, Inc. has been printing ink on paper, gluing that paper together, and sending it to your home or office via a real-life mail carrier. Even the nonphysical parts of what we do involve intense, on-the-spot collaboration: the over-the-shoulder read, the spontaneous meeting, the fortuitous interruption.
And yet, here I am, writing these words in my slippers, a cat in my lap, my co-workers represented by a neat list on an instant messaging program on my laptop's screen. We at Inc. have written a lot about companies that have experimented with new ways of working. We have been told by entrepreneurs, academics, and consultants that getting rid of the office and working remotely can make a company more productive, better for the planet, and cheaper to run. We have also heard that the idea of taking an organization like ours virtual is totally crazy.
It is a little bit crazy, but it also just might be the future of work. So we tried it. What follows is what we learned -- the why, the how, and the why not of going virtual. Think of it as your blueprint for your officeless future.
Step 1: Crunch the Numbers
Let's start with the most obvious reason to go virtual: It will probably save your company a substantial amount of money.
To be clear: This was in some ways a hypothetical experiment. We continued to pay rent for our empty office, and the noneditorial side of the business, which includes salespeople, administrators, and software engineers, continued to come to work. That said, if Inc.'s editorial operations no longer required an office, we would save about $500,000 a year in rent alone. That's an enormous sum for an organization like ours -- enough to pay every full-time staff member a $16,000 bonus. (This calculation, like many of the numbers in this story, is an estimate. In this case, the real estate savings is based on the average price for office space in Manhattan, which is $49 per square foot per year, times the rough footprint of our editorial operations, about 10,000 square feet.) Another potential area of savings comes in the form of added productivity. Working at home meant that we each saved about an hour every day by not commuting. Theoretically, at least, that would add an additional 20 hours of productivity per person per month. For the company, that's the equivalent of getting an extra half a week's worth of work for free.
Even if employees don't work any extra hours, allowing them to work from home is a benefit that won't cost you much. Time was when companies that wanted to set up a telecommuting program hired a consultant who would write a policy, give the employees a series of seminars, and buy a bunch of expensive equipment. Today, thanks to the widespread availability of free, easy-to-use communications technologies, a lot of telecommuting consultants are out of business -- and most virtual companies end up without offices not as a result of some heated planning meeting, but simply by accident. "My thought was, We'll do it this way in the beginning and centralize the location down the road," says Tony Conrad, who in 2005 founded Sphere, which developed a tool used by publishers and bloggers. Conrad never got around to the centralization part, and, after just three years, he sold Sphere to AOL for $25 million.
Most virtual companies continue to pay for the basic equipment and services employees need to work at home, reimbursing employees for a computer, a cell phone, and any necessary software and repairs. But other expenses -- including Internet access, electricity, and office furniture -- are typically transferred from the company to the employee. "The money employees save on gas, laundry, and lunch out of the office more than makes up for it," says Andy Abramson, the founder of Comunicano, a 32-person PR agency he runs from his Del Mar, California, home. As with traditional companies, employees can claim an income tax deduction for any business expense that the company doesn't cover, including part of their rent or mortgage if they have a room in their home that is used exclusively as an office.
The one expense that is likely to grow as your company goes virtual is your legal bill. In general, U.S. law treats home offices no differently from traditional ones, which can create administrative headaches for companies that have employees in multiple states. "The rule of thumb is that if you have an employee in a state, you're doing business there," says David Goldenberg, a founding attorney of Virtual Law Partners, an officeless law firm. The upshot: Each home office has to comply with that state's labor laws and pay taxes on any income earned there. Your overall tax bill probably won't go up much -- it might even go down if your employees live in states with low taxes -- but you should count on spending at least a few thousand dollars to make sure you are following the rules.
Step 2: Get the Tech
Repeat after us: The technology doesn't matter as much as you think it does. The more time we spent out of the office, the less we even thought about the technology. Most virtual employees can do their jobs with a laptop, some free software programs, an Internet connection, and not a whole lot else.
