Does small business success lie up in the clouds?

Sophie Devonshire, Babes With Babies Sophie Devonshire believes cloud-based working makes for happy staff and contented customers

Sophie Devonshire has her "head in the clouds", but she's not an unrealistic dreamer - far from it.

Technology of Business

She runs her company virtually - there is no physical office and the staff all work remotely from their homes across the UK, Dubai and France.

In fact, Babes With Babies, Ms Devonshire's online retail company for new mothers and mums-to-be, has its feet firmly on the ground.

Business is booming and profitable - the company has enjoyed a sevenfold increase in turnover in the past seven years, she says.

Hers is one of a growing number of small businesses using remotely-accessed cloud technologies to keep overheads low and employee hours flexible, while selling to a potentially global market.

Digital water cooler

So how does a cloud-based business work in practice?

Start Quote

We use technology to make things more human and helpful”

End Quote Sophie Devonshire Babes With Babies

Babes With Babies collaborates using Trello, an "intuitive" project management system, says Ms Devonshire.

"It's as if we're in a meeting room. You can set up noticeboards around topics. So, for example, if we're exploring the Autumn/Winter 2014 fashion collections, Zoe our chief buyer will enter her recommendations, then others will go in and add their thoughts," she says.

The constant use of Skype instant group messaging helps the team bond, she adds.

"It encourages team chat and provides those water cooler moments about the latest TV series or diet tips that are part of normal office life. We're a close team... like a family."

Marketing is done via social media - the company has 7,000 Twitter followers - and via the company's website, where online payments are handled by Sage Pay and PayPal.

A weekly conference call and the use of cloud file-storage provider Dropbox - which can be accessed from anywhere in the world - complete the set of tools that make the virtual office function.

Hot air balloon Cloud-based businesses are not tied to expensive bricks-and-mortar offices and can operate from anywhere

But physical goods still need to be despatched, however virtual your business.

The company outsources order handling and delivery to Intermail, which has a warehouse in Newbury, Berkshire. "Once the customer places their order, the system talks to the fulfilment house which then talks back to the website with the tracking code," Ms Devonshire explains.

Start Quote

Using cloud-based systems and services is cost-efficient. You only pay for what you use, and you won't be bound by long contracts”

End Quote Lassi Virtanen Pilvi.com

And there is still a role for face-to-face meetings in the cloud-based business, she says. Her company is planning a collaboration with international concierge company, Quintessentially, which offers meeting rooms.

Pie in the sky

But without a traditional, bricks-and-mortar presence, how does a cloud-based company build customer confidence? How does it persuade prospective clients that the company is a solid, reliable proposition, not a pie-in-the-sky entity that could disappear into thin air at any moment?

"It's all about an unremitting focus on customer service," says the 39-year-old entrepreneur.

The customer service team - or "get-it-sorted girls" as she describes them - are geographically spread so they can answer queries whatever the time of day or time zone, she says.

Her 11 members of staff all work flexible hours and this contributes to a highly motivated team who realise "that the most important thing is to keep the customer happy," she maintains.

"The whole idea of Babes With Babies is to make new mums feel good," she says. "So throughout the shopping process it's important that the customers feel looked after. We use technology to make things more human and helpful."

Graphic illustrating cloud computing concept Small businesses can now buy a range of off-the-shelf cloud-based services and costs are coming down

Customer feedback about the website means it is "constantly improving", she adds. For example, customers from Australia have their VAT automatically deducted when they make a purchase.

One-stop-shop

The growing demand for cloud-based services has encouraged Finnish start-up, Pilvi.com, to launch a one-stop-shop where businesses can buy what they need from one marketplace.

Co-founder and chief operating officer, Lassi Virtanen, told the BBC: "It can be hard for people to find what they need because the market is so fragmented. And managing multiple services can also easily become a burden with having to manage multiple invoices and learn a new user interface for each."

His company aims to unify all these elements, he says.

"In general, using cloud-based systems and services is cost efficient. You only pay for what you use, and you won't be bound by long contracts."

Such advantages mean global spending on IT cloud services is forecast to grow from $47.4bn (£28.5bn) in 2013 to $107.2bn by 2017, according to research company IDC.

Cloud philosophy

As well as enabling a low-cost, efficient virtual company structure, cloud services offer a new way of working, small business experts believe.

Chris Ward, author of Out of Office: Work Where You Like and Achieve More, says: "Cloud-based systems offer a more productive and creative way to work.

"Generation Y has no intention whatsoever of sitting at the same desk for 40 hours of every single week. Those staying in their office all week will become as outdated as the landline and fax machine."

Trello logo Project management programs like Trello help cloud businesses co-ordinate their efforts

Shaa Wasmund, chief executive of small business advisory service, Smarta.com, told the BBC: "Soon there'll be a new breed of entrepreneur who will just be doing what they love - serious about making money but also serious about having a life.

"They won't need to be based anywhere and won't be interested in sitting in meetings with venture capitalists."

In Ms Devonshire's view, the culture of office presenteeism and long commutes do not get the best out of people, and she "fundamentally" disagrees with Yahoo boss Marissa Mayer, who has been outspoken against home working.

Borderless business

This cloud philosophy has seen Ms Devonshire's company survive not only the recession but also emigration.

Shortly after founding the company in 2006 she relocated from the UK to Estonia for a few years for her husband's job - with the couple's toddler and new baby in tow.

It could easily have been a crisis moment for the business.

"Among my friends there was a lot of doubt and general sucking of teeth, particularly those who worked for big corporations. It's been good to prove them wrong," she says.

She is now back in the UK, but the time abroad shaped the way Babes With Babies operates by establishing the right systems early on, she believes.

For her - and many other small businesses - up in the clouds seems a pretty good place to be.

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