Time Is Money: Jay Jaffe Saves Both

Time Is Money: Jay Jaffe Saves Both

Virtual office reduces commuting by 500 hours and slices real-estate bill by $280,000 annually.

Founder of a consulting company that generates $4.5 million in annual revenues by advising law firms on business development, Jaffe decided to take advantage of electronic communication in 1994 with a virtual office.

Relying on talent scattered across the country and linked mainly by modems, his new direction helped propel his firm onto Inc.'s roster of the top 500 fastest-growing companies in 1997.

Yet pioneering presented drawbacks. Although the flexibility of telecommuting tempts nearly every employee, not all are suited to a home-office environment. Jaffe signed on a woman with a history of depression — and the isolation intensified her symptoms. He found others lacked the necessary self-discipline: A former employee was struggling with an addiction, and his home base enabled him to feed that need. What's more, managing is much more difficult, admits Jaffe: "I'm learning that e-mail nuances are less flexible than the spoken word."

Jaffe overcame hiring obstacles by recruiting employees through the Web. "If we find them electronically, there's a better chance they can work that way," he explains. Today, Jaffe has 18 employees in the United States and eight in the United Kingdom who work out of their homes.

E-mail can be a double-edged sword, discovered Jaffe. He receives between 100 and 120 daily e-mail messages: employee questions, contract approvals, documents slated for editing. Because it takes a mere click to launch these messages, clients and staffers alike expect a speedier answer than if they knocked on his door. On the other hand, he discovered the impersonal electronic approach discourages hangers-on who like to drop in with an agenda to impress, thus reducing nonproductive time. Jaffe also saves by eliminating 500 hours of commuting time each year.

Reducing Overhead

Space rental now amounts to less than 1% of his cost to do business, compared to 8% to 12% as paid by his clients annually. Jaffe's virtual office has slashed space-rental costs, representing a minimum savings of $280,000 yearly. His higher-than-average telephone and Internet fees don't stack up to those figures.

"Recently a client complained how he spends money on technology but hasn't seen corresponding pay-offs. I told him it's because his employees still hang around an office. Behind the excuses, it boiled down to executives refusing to sacrifice secretary assistance," says Jaffe.

Jaffe still maintains a bricks-and-mortar address in Washington, D.C., as well as a shared office suite in London, where he locks central paper files. (Even his computer-file servers are stored at UUNet facilities near the Dallas airport.) Yet, he says, "My happiest day will be when I'm totally virtual, without anybody in a central office anywhere."

Meanwhile, he rejoices at his ability to live or vacation anywhere. "I'm definitely more efficient in a cyber world," he notes.

Tip: Can't get your employees to buy into virtuality? Jaffe suggests dangling a bonus before deskbound diehards — a cash incentive proportionate to the company's savings if they move out.

Writer: Julie Sturgeon

Related Articles

Articles in our Entrepreneur’s Resource Center appeared in print and online newsletters published previously by the foundation. More than 1,000 articles can be found in the categories below, addressing timeless challenges faced by entrepreneurs of all types.