Start a virtual tour business by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your virtual tour business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a virtual tour business?
The costs of opening a virtual tour business depends on the amount and type of equipment you buy as well as whether you work from home or not. For instance, it is possible to start a home-based virtual tour business for $4,000 or less. This includes spending approximately $500 on a DSLR camera, $250 on a fisheye lens, $400 on a panohead, and $50 on a tripod. In terms of software, you will need to spend approximately $400 on Panoweaver Professional Edition and $900 on Tourweaver Professional Edition. The rest of that budget assumes spending approximately $500 on a professional website and $1,000 on some traditional advertisements in things like newspapers and radio, though much of your advertising will be done via your website as well as your social media presence which you can establish at no extra cost.
The cost of this business can go up if you want to offer different services that require different cameras. For instance, a professional camera that can create 4K, 360-degree video will likely be $1,000 or more, and software to edit these videos (such as Autopano) may cost up to $250.
What are the ongoing expenses for a virtual tour business?
One of the best aspects of this job is that if you work from home, you have virtually no ongoing expenses. Shooting everything digitally means that there is not an equipment cost after initial investment (until you decide to replace equipment entirely), and working from home means you do not have additional overhead, utilities, and so on to worry about. Functionally, then, you are merely paying for gas that you require to travel from place to place, and the charges to host your professional website (which should be less than $80 a year). You may also choose to advertise via traditional media from time to time, but as mentioned earlier, much of your advertising presence will be online.
Who is the target market?
As mentioned earlier, your best clients will be those from the hospitality and real estate industries. This is because they will both have numerous rooms and properties for you to create virtual tours from, all of which adds up to a bigger payday for you.
How does a virtual tour business make money?
A virtual tour business makes money by charging clients to shoot, edit, and deliver photos and/or video to create a virtual tour of a physical space. The exact amount you charge typically varies based on the requested media format, the venue, and any additional add-ons that customers may purchase.
How much can you charge customers?
Your pricing may vary based on different packages, bundled services, and so on. Typically, though, a photo-based virtual tour of a home or hotel room would be between $200 and $250 dollars, while a video-based virtual tour would be between $1000 and $1200. You may charge more for specialty services or requests (such as shooting at night, aerial photography, and so on), and you may experiment with pricing models where you charge businesses a monthly fee, such as $50 a month for a fixed number of months to produce and edit an unlimited number of listings for this business.
How much profit can a virtual tour business make?
The exact amount of profit that you can make from this business obviously depends greatly on how many clients you have and the amount of work that they provide. For instance, if you specialize in video tours and do hundred jobs in a year, this job could provide a six-figure income. Realistically, your profits will be lower when you are starting out, but the aforementioned lack of true overhead means that most of every dollar translates directly to profit.
How can you make your business more profitable?
One path to increased profitability is to offer different tiers of services at different prices. This lets customers feel like they are getting a deal while also giving you a chance to upsell them on better packages. Also, try to branch out—while hospitality and real estate are your primary industries that need virtual tours, you may find that corporations, school systems, and various city offices would also be interested in your services. Finally, make sure your social media presence constantly has a stream of new media highlighting your services, your previous work, and so on; this connects you to the community, which makes it that much likelier that the community will want your services.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your virtual tour business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, and it's easy enough to form by yourself, or check out the top business formation services.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: You can get $200 when you open a Chase business checking account with qualifying activities. Learn more.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a boutique tour business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
In addition, certain local licensing or regulatory requirements may apply. For more information about local licenses and permits:
- Check with your town, city or county clerk’s office.
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Virtual tour businesses should consider requiring clients to sign a service agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is an example service agreement.
Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your virtual tour business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a virtual tour business
As mentioned above, the best advertisement you can do is to showcase some of your best virtual tours on your website and social media feeds. For local businesses, it doesn't hurt to advertise in newspapers from time to time, and especially when your business first opens. Also, try to get in-person meetings with hotel managers and realtors whenever you can: the nature of your product is that you can quickly show prospective clients your results on a phone or a laptop, which is immensely helpful in pitching your products.
How to keep customers coming back
Attracting customers is often a matter of starting small and working your way up. For instance, you may start with smaller hotels and/or newer realtors in your area who are more willing than larger corporations or businesses to give something new a try. Once you have a proven track record of helping out these smaller businesses, it is easier to pitch yourself to larger clients. Retention should be a natural function of the product: once companies are able to chart increased profits and improved client perceptions to your virtual tours, they will be happy to continue using your tours to highlight new properties, renovations, and so on.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Virtual Tour Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
This business is good for those with multimedia savvy, for it takes skill with photography, video recording, sound mixing, and multimedia editing to create a solid virtual tour. It is also good for those with extensive travel experience, as this lets you think like the consumers you are creating tours for.
What happens during a typical day at a virtual tour business?
In no particular order, your daily activities may include communicating with current clients as well as prospective clients. On busy days, you will be traveling to the areas that you must create virtual tours of and gather the necessary photos and video recordings as well as information about the space. Back at home or the office, you must edit this together into a virtual tour and send the finished product to the client, all while making any adjustments they require. When you are not doing these things, you may be working on advertising your services, investigating the competition, and staying current regarding new camera hardware and editing software.
What are some skills and experiences that will help you build a successful virtual tour business?
The most relevant skill to help you build this business is extensive practice with all of the software and hardware involved. For instance, if you are creating 360 degree videos for clients, having created and edited many of your own videos will help you understand the “do's” and “don'ts” of this technology. Other skills include prior employment in some of the sectors that you will now service, such as real estate or hospitality, as this can help you with your initial networking.
What is the growth potential for a virtual tour business?
The growth potential for this industry is quite large. While the Bureau of Labor Statistics does not chart the virtual tour business specifically, Greenlight Insights reports that virtual reality as an industry will grow from a $7.17 billion industry in 2017 to a $75 billion industry by 2021. Virtual tours are a part of that, and as the public embraces the potential of VR, it means exciting new ways that they can check out your virtual tours.
TRUiC's YouTube Channel
For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe below to view later.
Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a virtual tour business?
Make sure that your website and social media presence showcases some of the virtual tours you have already created. This is your single best advertisement, as clients can see how good this looks before agreeing to your services. Try to pitch your services in person when you can, and make sure you have research handy: for instance, testimonials from hotels and realtors about how virtual tours have improved their business are a great way to convince new clients you can do the same for them.
How and when to build a team
In order to maximize profit and minimize overhead, many virtual tour businesses remain one-person operations. It is also easy for an experienced person to do most of the shooting, recording, and editing on their own. However, if you are getting more requests than you can personally handle, you may need a partner or small team. Alternately, if you decide that your business has grown to the point that it needs a standing office, you will obviously need to hire a small staff (such as secretaries and assistants).