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The Cost of Doing Business

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I don’t know about you, but when I started my business almost 25 years ago, I expected to have to pay out for things to get started. Things such as: equipment, furniture, software, business registration, business name registration, printed business cards and stationery, industry association memberships, advertising and so the list goes on. The old saying ‘you have to spend money to make money’ rang very true back then. Additional but hidden costs were taxes, insurances, superannuation, accounting, etc. Some insurances I couldn’t get till I’d been in business at least 6 months to demonstrate a regular income was coming in.

The advent of the Internet has done some great things and made so much available to millions the world wide, but it’s also brought this unwarranted expectation that you should be able to get everything, or almost everything, free. Free domain names, free web hosting, free websites, free advice, free software and apps. Even the free use of images and other people’s documentation, wording, even free advice about what to charge because some are just too damn lazy to put in the work for themselves. The reality is, unless you put in the work, the homework that is, then you won’t really own your business. And when the tough gets going, you give up.

A post I saw online recently asked about how many used a domain for their business, rather than gmail and went on to talk about their costs and how come others don’t seem to generate as much cost as this person was, in running their business? My response was this:

“I have always used a domain since the mid 1990s. There is a cost to running a business vs running a hobby. My expenses are more than yours per month but I still make money, pay bills, and have some left over for other things. That includes paying my taxes and insurances too. The reality is you do have to spend money to make money and if there is a need for those items to run your business, then that needs to be factored into your charges to your clients.”

I think that last sentence probably is the secret to why so many are seeking ‘free’ or ‘cheap’. Because they haven’t done their homework and factored in their costs for charging their clients. Instead they work to compete with the ‘cheapest’ and consequently have to constantly find free or cheap to run their business – a business that I would challenge is probably just a hobby, otherwise they might take it more seriously. I’ve shared here a few times, on this blog, that I have a formula that VAs can use to help them work out rates that are right for them. It can be found via my Free Resources page. But if you don’t want to sign up for that, then check out Nina Feldman’s Worksheet that she has freely available online. When I was first starting out I worked out how much I needed to make on an annual/monthly/weekly basis, in order to be able to run a viable business, pay all my own expenses and have some left over to live on. If you don’t put in that effort at the very start, then you’re doomed to last the distance. Doesn’t matter what type of business you’re running, you need to do your homework and work out what you’re going to do, how you’re going to do it, what you need to do it, what it’s going to cost to do it and what you need to make to do it.

Think only VAs experience this challenge? Think again. Here’s an article written for photographers with some great advice.And here’s another article about the cost of doing business for you to read. The reality is, if you are wanting to run a business, then you need to treat it like one. No excuses. It’s either a business or a hobby – there’s no inbetween. And seek out an advisor in your region, preferably someone with some Accounting knowledge, who can advise you for what is required where you live.

Being a VA is not get-rich-quick

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As anyone who’s been in business for sometime would know, setting up a business and building a good client base takes considerable time.  It would be rare to make a full-time income in the first year in business, let alone a profit – at least in traditional business. However, even in building a Virtual Assistant business, it still takes time to get sufficient clients to establish a full-time income, even if you show a profit much quicker than traditional business.  There’s a lot you need to do, other than setting up your office and establishing an on-line presence. You also need to get known and get out there and network with others.  Clients don’t just come to you without any effort on your behalf.

I see a lot of articles about the VA industry – about how to use them, what you should be paying, versus how VAs operate, the fact that they are independent business owners and not employees, and the rates we work with. It’s no wonder that new people entering our industry can get very confused in a short time.

  • Can they make a decent income to live on? (the answer is yes, by the way, there are many single parents working as VAs).
  • Can they get many clients? (the answer to this one is yes, again – but you need to work at it)
  • Can you operate a VA business with just one client? (not really – it’s not sustainable, what if that client moved on? and realistically you could be classed as their employee by your tax department – you need to have more than one client).

Recently one new VA made a comment to me that made me realise she was of the impression she could be making a full-time income within a short time of starting up. Unfortunately the clients she was attracting I wouldn’t really call clients, more scammers, and I steered her away from potential trouble. The comment was that she needed the money right now because of something she needed to do. I advised her to find some temping work or a part-time job as the reality is that it will take her months and even more than a year before she had a reliable income from her VA business.

There are VAs who do pick up great permanent clients very early on in their business, but this doesn’t happen for everyone. Often the clients are ad-hoc, small jobs here and there or only 1 or 2 clients initially – certainly not enough for a full-time income… yet.  But spend time getting to know other VAs at the forums, ask questions, become a regular participant and let them get to know you. Many VAs will outsource to other VAs they’ve come to know and trust.  And if you need to, get some part-time work, or keep your job, till your VA business has begun to establish itself. You will be grateful for having done so.

The Faceless Ones in Social Networking

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As many of you would know, I’m an active networker, both online and offline.  I love connecting with people, learning things, sharing my own knowledge and experience and helping others move forward with their businesses.

There are times when I come across people who don’t really seem to get what networking is about.  For some it’s about how much business they can get, but they’re missing the other half of the equation – developing relationships and building a list of resources for their own businesses and for others they meet.  After all, networking is about building relationships and often you will benefit in the long term, if you refer people you meet to others you know… even if you get no business out of that meeting in the first instance.

What amazes me is that people often leave their profiles online incomplete, and for that matter, their business cards too. Why not tell the whole story? Make it easy for people to get to know you and contact you.

facelessOn some business cards people don’t include a postal address, just an email address and perhaps a phone number. Sometimes not even a surname – just a first name. If you don’t have a postal address you can share and don’t want to give your home address, then perhaps a suburb is useful. Some clients need to know roughly where you are before considering whether to do business with you. And the more you can tell them about you, the better.

And on social and business networks online it’s important for people to be able to identify you. That means adding a photo and letting people get to know who you are.  If you were meeting people face-to-face you wouldn’t hide your face. Well, you could try, but people would think you were weird and probably avoid you 🙂  Online, if you’re in business, you need to make people feel comfortable with you, and especially with networks like LinkedIn, it’s important to complete your profile, share your past experience as this will validate what you are currently doing, and add your photo.  Old contacts will remember and recognise you, new people will recognise you if they later meet you in person, and over time, people feel they’ve gotten to know you. Which is what relationship building is about.  Using someone else’s image (like a famous person) or an animal or a cartoon really doesn’t cut it either. Let people see who you are as well as learn about the type of person you are through your profiles and contributions online.  These will help you build relationships and grow your business, over time.

I know when I get people asking to connect with me via LinkedIn, if they have no image and only a small number of connections, I will ignore them. If they have an image, even with low connection numbers I will take the time to read their profile and consider their request. But no photo and that indicates to me they haven’t completed their profile and they’re not yet ready to network.

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