Virtual banking removes much of the hassle and cost associated with financial transactions and management of finances for small businesses. This means it also provides a good foundation for entrepreneurs who want to move into new areas.
Below are some of the ways in which having a virtual bank account can help small businesses that are looking at diversifying their business.
No more ‘the bank says no’
If a business wants to develop a new product for a different market segment, not having to run business plans past your bank manager, as traditional business bank accounts would require, is a major advantage.
While business plans might still need to be approved by investors and the board, they won’t be hampered by a bank then saying no – a problem many entrepreneurs will be familiar with.
Give yourself time to focus
Another major way in which virtual banking can help is by the time it gives back to the business. For any new venture, time and resources are needed to properly plan what will be involved, including product development and ensuring risk is minimised.
Virtual banks make business banking much simpler, meaning employees, whether in the finance team or elsewhere, can spend less time dealing with finances.
Most virtual bank accounts provide the option to make mass pay-outs with a single click of a mouse button. This capability saves huge amounts of time around invoice payments and payroll.
Virtual bank accounts also provide the means to quickly view and manage financial transactions, either online or via mobile devices. This removes the need to spend time travelling to a bank branch and enables businesses to get a real-time picture of their finances.
And with virtual banking supporting a cashless way of operating, less time needs to be devoted to managing cash payments and ensuring cash is handled and stored safely.
All the time saved can be devoted to the new area of the business. As well as product or service development, this could include recruiting people with the right skills, working out how to market the new offering to give it the best chance of success, and drumming up any additional investment that might be needed.
Ensure nothing is lost in translation
With a single virtual account able to support multiple currencies and the ability to make and receive payments quickly and at low cost, moving into new international markets is considerably simpler and more cost effective than it is with traditional business banking.
Small businesses wanting to sell goods and services in other countries, or wanting to expand their supplier base to support new products and services, can do so without putting too much at risk.
If a new approach doesn’t work out, they can step back without having committed too much time or money, and learn from the experience.
Don’t get punished for success
Another area in which virtual bank accounts offer an advantage over traditional business banking is around fees. Traditional bank accounts often sharply increase fees as the turnover of businesses exceeds a certain level.
Likewise, for businesses that make and receive more international payments as part of their diversification plans, the fees for those payments won’t be prohibitively expensive, as they could be if expensive wires are required or banks charge excessive fees.
The benefits that virtual banking brings to any small business become even more significant when it comes to diversifying what the business does. The days of small businesses finding their ambitions and growth hampered by traditional banking are over.