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.
Kathie is the owner of VA Directory and is former past President of the Australian VA Association. She founded the Virtual Assistant industry in Australia in the mid 90s, having already been operating a home-based secretarial service. Today the VA industry covers a multitude of office-based services for clients worldwide.