Since the Covid-19 shutdown, we’ve seen a big influx of inquiries coming in at IVAA from people who want to know how to get started as a VA. If you’re looking to become a virtual professional or an online entrepreneur, congratulations! You have started an amazing journey. Now, you just need to decide where you want this journey to take you by answering one question…
Do you want to run a business or just do the work?
Most of us become a VA because we want freedom. Generally, that means the freedom to work from home and set your own schedule. But a lot of times, I see people get into the virtual world and they are overwhelmed by the amount of behind-the-scenes work that is required.
There are a lot of factors to consider when you are trying to determine if you actually want to be a business owner or if you are more suited to being a worker bee. Even if being a business owner sounds attractive to you, you might be better suited to being a subcontractor if you don’t like doing the work that’s essential to running a business.
What it takes to run a business – knowing your numbers
There are certain key numbers you need to know to successfully run your business. Do you know:
- How many new contacts you need to make to get a new prospect?
- How many sales conversations it takes to close business?
- How much it costs to onboard a new client?
- How much money you should be leaving in the business?
- How many billable hours you can expect to work?
Getting new business
Each month, I try to meet 40 to 50 new people. Of the 50 people I meet, about 25 become opportunity or sales calls.
It is important to recognize that you will not close every sale. A good number to reach for is closing three new clients for every 10 sales conversations. If you can close 4, you’re really doing well, and if you can close 5, you are in the realms of greatness. And by close, I mean you get a signed contract and money in the bank.
How much you want to work
It’s also critical to understand your bandwidth. How many hours can you dedicate to client work? How many hours must you devote to running your business?
Most successful VA business owners work about 50 hours a week. If you want to work 40 billable hours a week, you can expect to dedicate about 10 more hours a week to running your business. Many VAs start out thinking they can bill 8 hours a day, and that time spent working on their own business will just be a few minutes a day. They soon discover that’s not realistic.
Being realistic with the hours you can work, the number of clients you can effectively serve, and how much free time you need for your personal life and health will help you determine everything from bandwidth to pricing.
Keeping track of business finance
Being a business owner means making a distinction between your business revenue and your personal income, knowing how much money you’re spending, and how much you need to leave in the business.
Regardless of whether you’re going to be a business owner or a worker bee, you’re going to be self-employed, which means you must set aside money for taxes. If you’re in the U.S., you should set aside at least 30% for taxes (get the advice of an accountant), then another 10-20% for business expenses. That means you will save between 30% and 50% of your revenue each month, and you’ll need even more for expenses if you plan to build a team. What’s leftover is your personal money.
Which path is for you?
Being a business owner is not for you if:
- You don’t want to do sales
- You don’t like to negotiate contracts and have trouble saying “no”
- You want to keep most of the money that comes in for yourself
- You don’t want to keep up with financials
- You don’t want to work many non-billable hours
What kind of VA you become is completely up to you. Being a business owner can mean more money, but it also means less freedom than being a subcontractor. If freedom is more important to you than money, you may not be happy as a business owner, and there is nothing wrong with that. Don’t feel pressured to run a business if it doesn’t leave you enough time to live the kind of LIFE you want to live. The most important thing to remember is that whatever path you choose, you have value, and people will pay you for it.
Dionne Thomas is IVAA’s Membership Director and Founder of The Zeva Group.
Learn more about Dionne at zevagroup.com