Everything You Need to Know Before Starting a 100% Remote Company

a person working on their computer

When the pandemic hit two years ago, we thought we’d all go back to normal in two weeks. But alas, it has been two years, and we still see no end to it. Clearly, the vaccinations haven’t been strong enough to stop the virus for good.

As such, you’re probably thinking that starting a remote company is wiser than starting a traditional one. Employees are working from home anyway, so why waste resources on rent? However, starting a remote company isn’t that simple.

You can start it from home with nothing but a laptop and internet connection. But when it comes to planning your operations, you may run into some challenges. There may also be some legal risks in your HR department.

To ensure that you’re on the right track, here are some pointers for starting a 100% remote company:

1. It’s Not the Same as Working From Home

When you build your remote team, you don’t classify them as work-from-home employees. Instead, they should be called remote workers or remote employees. Though they technically work from home, it’s not what your company requires. You and your team can work anywhere; hence, you are remote workers.

Work-from-home is often considered a benefit. Remote working is a way to work. If you have a traditional company, you may allow your employees to work from home on certain days. For example, companies temporarily adopted a remote or hybrid model during the lockdown, but they didn’t change their whole system into a remote one.

On the other hand, remote working is operating outside an office 100% of the time. It requires a different set of abilities, skills, and resources. Also, you can hire employees from all over the world because your operations don’t require face-to-face meetings. It’s a permanent and default setup, not a perk you offer to select employees.

2. Legal Implications of Hiring

an interviewer

You may be thinking that remote companies save money on human resources. After all, you can hire employees from countries or states where wages are low. But you may face other legal matters besides fair wages.

Working hours, overtime, and break times vary by state or country. What’s legal in your state might be illegal in another. Also, keeping track of overtime or break times can be more difficult if your team is based on different locations.

If you’d have employees who aren’t exempt from the Fair Labor Standards Act (FLSA), you should pay them at least one-and-a-half times their regular salary for all hours rendered in excess of 40 in a single workweek. You can just discourage working overtime to avoid spending more, but there would be times when overtime work becomes inevitable.

As such, you need to have an electronic timekeeping system to prevent unauthorized overtime. Let your employees record their working hours and require management approval for overtime work.

3. Cloud Computing

A remote company conducts all of its operations digitally. Hence, you’d need cloud computing services to make this happen. You can choose software from one of these three categories:

  • Iaas or Infrastructure as a Service: It is pay-as-you-go storage. Magento 1 is an example. It requires an initial investment and a team of IT professionals to maintain the hardware and keep it updated. It fits into most budgets and can future-proof your business.
  • PaaS or Platform as a Service: It is for companies that develop software applications. If you’re a tech company that would like to create mobile games, PaaS is for you.
  • SaaS or Software as a Service: Unlike the first two, it doesn’t require you to install anything because the application can be accessed through the internet. Dropbox is a compelling example. You can save, share, and protect your files on Dropbox without downloading an app, although it’s also available.

A SaaS agreement is aligned with the GDPR, which stands for General Data Protection Regulation. It’s a data privacy and security law started by the EU. Countries outside the EU are also required to abide by this law. The GDPR ensures that all internet users can choose to keep their data private. It also prevents cloud services from being exploited.

On a different note, SaaS is scalable, so it suits businesses of all sizes. Your remote startup will find it cost-effective as well because it only charges you a fixed monthly fee.

With these pointers, you can set the foundation for your 100% remote company. When you’ve settled all of them, start building the basis for your policies, company culture, and leadership style. A remote company will give you a diverse workforce, which you should use to your advantage. Treat it like a traditional company as well, in which structure and teamwork are crucial, even if you’re from different parts of the world.