Why You Need A Virtual Backoffice

Every business needs a virtual back office.

We've been building our virtual back office for years.

In 2020, we had 12 franchises and 3 US employees in the back office.

Today, we have 33 franchises, 3 US employees, plus 8 employees in the Philippines. In addition, I have 1 executive assistant, 2 for my podcast/social media, plus an internal team for IT support.

Don't think of your virtual employees as "outsourced". Think of them the same way you would any employee. They happen to live on the other side of the globe.

What's A Virtual Back Office?

The back office runs the administration side of your business: payroll, HR, billing, reconciling, insurance, & other random tasks.

Almost all of these tasks can be completed using a computer & phone, which means they can be done from anywhere in the world.

#1 Scale

A US-based back office is harder to scale. Every new hire requires a desk, computer, phone, printer, etc. Eventually, you need more physical office space. Then, you move to a bigger space, add a second office, or allow employees to work remotely.

If you allow employees to work remotely, does it matter if they are down the street, across the country, or worldwide?

A virtual back office is easy to scale. We can easily +1 to the team anytime we need to. It's just one more license on Microsoft Teams.

Three years ago, we started with one virtual employee. We incrementally added one employee every 4 to 6 months.

#2 Cost Savings

A full-time US back office employee will cost $42k to $60k annually. Plus another $5k to $7k in payroll taxes & benefits. Plus workers comp, unemployment insurance, 401k & other employment costs.

A full-time Filipino will cost $15k to $20k per year all-in. No payroll taxes, benefits, workers comp, unemployment insurance, or 401k.

$50k to $70k US vs. $15k to $20k Filipino

$35k to $50k annual savings per employee

With our team of 8, we are saving $280k to $400k per year. We use that cash to re-invest back into the business. We buy more franchises running this playbook

#3 Get Your Time Back

Many small business owners do a lot of back-office tasks. They enter the sales, reconcile the bank accounts, invoice customers, collect payments, run payroll, etc.

These tasks, while important, are low value. You can hire someone for $7 per hour to do all of this & more.

You should be focused on high-value tasks: building new relationships, hiring & training key employees, and growing the business. Tasks that will ultimately make you more money & give you more freedom.

#4 Why The Philippines

You could hire virtual employees from almost any country in the world. Here's why we prefer the Philippines:

1. Cost-Effective: The cost of living in the Philippines is very low, so you hire quality people for affordable rates. It's a win-win situation where you get highly competent professionals for a fraction of the cost you'd pay locally.

2. Skill Level: The Philippines has a high literacy rate and a strong educational system, particularly in business and technical fields. There are many people skilled in accounting, administration, and human resources.

3. English Proficiency: The Philippines is one of the largest English-speaking countries in Asia, making communication easier and more effective. You won't face the language barriers compared to hiring from other countries.

4. Cultural Compatibility: Filipino culture places a strong emphasis on hard work, loyalty, and respect for authority, traits that align well with US business practices.

5. Time Zone Flexibility: Although the Philippines is in a different time zone (12 hours ahead of EST), many are accustomed to working “non-traditional” hours. In some households, multiple people share a single workspace/computer, utilizing it 16 to 24 hours per day.

#5 Hire Any Role

Most people wrongly think that virtual employees can only do entry-level tasks.

You can hire a virtual employee for every back-office role.

Here is our current virtual back-office team:

• Controller (1X)

• General Accountants (3X)

• Accounts Payable (3X)

• Payroll & Admin (1X)

Non-back office virtual team:

• IT Support (3X)

• Social Media (2X)

• Outbound Sales (1X)

• Executive Assistant (1X)

You are only limited by your imagination & ability to manage the team.

The Complete Guide

I am writing an entire guide on how to build a virtual back office. This guide has tips on how to find, pay, train & manage your team. etc. It’s still a work in progress. You are welcome to copy it for free.

If you find it valuable, please share this newsletter with at least one person who may also enjoy it. Even better, share it on LinkedIn, Facebook, or Twitter 🙂 

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My team helps people buy their first franchise. Book a call here to get started today.

Cheers!

Brian