One of the biggest costs for business owners is labor. Many owners turn to remote workers in other parts of the country—or the world—where labor costs are lower to try to stretch the budget they have available to pay their talent.

But whether you are working with remote freelancers or permanent employees, remote work can come with its challenges. There’s a difference between managing people who are halfway across the world and those who are sitting in the same office. Here are five ways to know if remote work is right for your business.

Can you find the talent you need locally at an affordable price?

If you are running a business in a part of the country where talent in a particular field is scarce, you may have to look outside of your geographic region to find the help you need. For instance, at a business located in a rural area where there aren’t many technology workers, it could be hard to find a freelance web developer in town. If so, then looking on a freelance platform like Upwork or Freelancer for a remote contractor could be a good idea.

Or perhaps you are located in an area such as Silicon Valley or New York City and need to add a web developer to your permanent staff. If you’re running a startup on a shoestring budget and can’t afford to hire someone at prevailing market rates, looking to hire a remote team member in a distant city may be the ideal affordable solution.

Is a project something that can be done best remotely?

These days, many projects can be done remotely, thanks to low-cost technology. However, that doesn’t always mean hiring remote workers to do it makes sense for your company.

Let’s say you offer a tutoring service. Most of the tutors are teachers from your community, and your clients are local families who happily stop by your offices for tutoring. The arrangement is working well for everyone. In that case, adding remote tutors to your roster might not bring much value to your clients.

But let’s say in the same business, you’re noticing that a lot of students are arriving late to their appointments because their parents are getting stuck in traffic. You might try offering a remote tutoring option, in that case, to see if it helps keep tutoring sessions on schedule.

Or perhaps parents are asking you to provide tutoring in a subject in which you can’t find a local tutor who has expertise. Offering a video option with a remote tutor could help you grow your business in this scenario.

Do you have the right technology in place?

If you are going to hire remote workers, you will need to devote some time to figure out what technology helps these relationships work most smoothly. Free video chat technology such as Google Hangouts and Zoom may be all you need, or you may need to invest in industry-specific, cloud-based tools.

If you are a technophobe, then working with remote workers probably isn’t a good fit for you. It’ll be too hard to collaborate. But if you’re willing to put a little time into learning about new technologies that will help you and get yourself up to speed, then working with remote workers could be a great fit for you.

Do you have the management skills to supervise remote workers?

Although remote workers may not be sitting next to you, that doesn’t mean they don’t have the same emotional needs as other workers.

A growing number of companies that rely on remote workers are teaching their managers best practices for working with remote team members. For instance, you may have to go the extra mile to be clear about a project’s requirements and timeline, given that your remote worker won’t have the same opportunities as someone sitting next to you to ask you questions on the fly.

And you’ll also have to be mindful of international time zones. Reaching out to someone in Asia with an urgent last-minute request at 9 am your time – but 10 pm his time – could be viewed as very inconsiderate, so you’ll need to plan accordingly to avoid this.

Does a particular individual have the skill set to work remotely?

Finding someone who has had a history of doing remote work, whether as a freelancer or a staffer, can save you the hassles of engaging with someone who isn’t self-motivated enough to get things done without a boss’s constant, in-person guidance.

However, remote work arrangements don’t always start out that way. If a valued team member who is accustomed to working in a traditional office setting asks for a remote work arrangement, try easing into it gradually. Say the team member will be relocating in three months and wants to work remotely from another city. Try having her work from home one day a week in the months leading up to the move. You’ll know very soon if a remote work arrangement is likely to work out so you can make an educated decision about the proposal that will help your business thrive.