I came across something utterly heartbreaking a few weeks ago.
I’ve been sitting on it for awhile, going back and forth about whether or not to have a conversation around it.
I never want to discourage anyone from this business or have anyone take things the wrong way. Because if you set things up right, it is an AMAZING business and lifestyle.
However, it’s a cold, hard truth that no one ever talks about in our industry.
And the problem with not talking about things that are uncomfortable, that aren’t all “rah, rah, kumbaya” all the time, is that you can’t fix what you don’t acknowledge.
What was this thing I came across? An ad for a “Virtual Assistant Business For Sale.”
And what is this cold, hard truth I speak of? It’s that most people in our industry are not profitable and not making the kind of money they can actually live on.
You see, the sad thing about this ad is that it isn’t an exception. It’s actually a very accurate example reflective of what most of the businesses in our industry look like.
Now, before I dissect this for you, I first want to make it absolutely clear: It is not that people can’t make more money in our kind of business; they absolutely can! YOU absolutely can!
It’s simply that they are being taught by the industry at large in all the worst possible ways to price, operate and market themselves (like calling yourself a “virtual assistant”). And it’s keeping them poor, overworked and overwhelmed.
The fortunate thing is that YOU always have the possibility to learn better so that your business can do better for you.
And that always benefits your clients because you can’t take good care of others if your needs aren’t taken care of first.
Here is the ad:
Let’s examine the problematic issues here:
- We see that the business has been around for 11 years. Great! After that amount of time, you’d expect them to be earning really well.
- Yet in the first bullet we see they are only making £1900/mo (British Pound) which is $2363.98/mo USD. After that many (11) years, why are they still making that little money? Those are poverty-level wages. Did they mean perhaps that this is the average value per client?
- Unfortunately, no, we see in the next bullets that after 11 years they have only 1 retainer client at only £350 GBP/$435.39 USD per month. The rest of their revenues come from 15 regular (but uncommitted/non-retainer) clients and 20 ad hoc clients, which I’m interpreting to mean an average of 20 project clients each month. The problem is that at this number of clients they should be making several thousands of dollars per month! I can’t even imagine (well, actually, I can) how overwhelmed and overworked they are… and for such a paltry sum on money! To give some context/frame of reference, I make more with just one of my retainer clients than they make in an entire month from 36 clients.
- They also mention having relationships with two typists. This business owner is barely making ends meet at these figures, where on earth is there any margin to pay anyone else? (Answer: there isn’t.) It means that they are doing all this work at a loss! Especially at gross figures that don’t even account for expenses, operating costs, taxes, etc.
- This is not a profitable business in any way, shape or form. What has most likely happened is that burnout caught up to them (no wonder!) and they are now trying to unload the sinking ship. But there are no assets of any value to sell here. The clients it has are being charged such an ungodly little amount, there is almost no way in hell to ever reset those kind of expectations. They’ve branded and positioned this business as “cheap” and there is just nowhere you can go with that. It would be faster, easier and less costly for you to create a business from scratch and establish the brand based on properly set foundations and expectations and charging higher, ore profitable professional fees.
Don’t misunderstand me. This examination is in no way a denigration of the business’s owner.
Rather, it’s utterly heartbreaking to me that they have made so little money working with too many clients with basically no commitment and constant churn. I wish I’d had the opportunity to help them early on.
When we talk about these things, there are always a certain number of people who don’t understand why it’s so important to have these conversations.
But bringing this consciousness to the fore is integral to being able to improve things so you can better earn in your own business.
It’s why I’m always talking about money, how you are marketing and positioning your business and brand, how not charging profitably sets you up for failure, about how the expectations and perceptions you create in clients directly affect your ability to charge properly and earn well.
These are the topics that will make or break your business.
It’s this fundamental business education — and not the latest, greatest software or tools — that is key to creating a profitable, sustainable business where you can get, work with and keep great clients (clients worth having who value you, not cheapos looking for a free handout), make great money and that works around and enriches your life and what’s important to you (instead of the business running you).
What could this person have done differently?
- Business planning. Going through the exercise of business planning forces you to think through and get clear and conscious about all the important details of your business such as your needs, goals and intentions around money, what kind of clients you want to work with and are worth working with, and what business standards, policies and procedures to establish accordingly.
- Getting off the project work merry-go-round. A business based on project work needs a shit-ton of clients and work in order to stay alive. It’s a constant, never-ending hamster wheel of marketing, even while you already have clients and work to take care of in front of you, and you never know where your next meal is coming from. Nothing wrong with project work, but think of it as secondary income, the gravy to the meat and potatoes where you make your “real” money.
- Expecting a commitment. Retainer clients (clients who pay a monthly fee upfront for a plan of support) are where the real money is at. A commitment of working together each month allows you to do your best work and gives you something to actually work with to achieve a tangible, demonstrable value and results for clients. But of course, if you don’t ever expect a commitment, you’ll never get one. That’s why it’s so important to set standards in your business around what’s important to you. An expectation that clients must make a minimum commitment to be given a place on your client roster is a standard that will serve you (and your clients) well, even if some of them might not understand that at first. (You’ll have a far easier time getting commitments if you learn how to set up and navigate the whole consultation process and pricing conversation.)
- Get clear and conscious about the money. Charging fees based on what you see others charging (who are more often than not just as lost as everyone else) is the worst way to set your fees. It’s not about what everyone else is charging (stop looking at them!). It’s about knowing what your target market values, how you can improve their circumstances with your support and what they gain from working with you, and learning how to articulate that value to them in the context of their business and goals.
- Choosing a target market. This business is all over the map when it comes to who their clients are and the work they’re doing. And that is a huge part of the problem. Very simply, a target market is an industry/field/profession that you focus your administrative support on. This specialization is key to making the big bucks. That’s because when you know who it is you are focusing on, you can determine very quickly and clearly what they do in their business and what their common needs, goals, challenges, values and interests are and then develop your support solutions around those things. Your offerings will be much more interesting and compelling that way, and you’ll be able to charge more (because there will be more relevant, specific, higher perceived value) and get clients more quickly and easily.
- CHARGING MORE! At the poor fees this business would have to charging to account for so little monthly/annual revenue, it’s a clue that the business owner is not understanding the economics of business. You simply can’t charge rates that amount to employee wages and expect to earn well. Business is a completely different ballgame. It’s why I’m constantly reminding people, you are NOT an employee, you’re a business. There’s also this crazy, but nonetheless immutable law of business: The more you charge, the better clients you get. And what do we mean by better clients? Client who value you and what you offer. Clients who are invested and make the commitment to working together. Clients who aren’t looking for the free buffet. Clients who are loyal to you and the good work and results you provide them with, not how little they can pay. When you have better clients who make a monthly financial commitment to working together toward established goals, you can make more money working with fewer clients and have more time for your own life in the process.
- Stop calling yourself an “assistant.” One of the reasons people have a hard time charging more or seeing their value in a different light (and gaining some business self-esteem and confidence) is because so many of them insist on calling themselves “virtual assistants.” This keeps them thinking of themselves as employees and seeing things through that lens instead of from an entrepreneurial/business mindset. Here’s what you need to understand: Assistant is a term of employment, not business. Terminology (just like pricing) is a part of marketing. How you price and the words and terms you use to describe yourself have a direct influence on how clients perceive you and the expectations, perceptions and understandings they come to the table with. When you call yourself an “assistant,” they don’t look at you as a business owner and advisor. You are teaching them to view you as a type of subservient employee, and what they expect to pay is based on that wrong, harmful perception. When you call yourself an “assistant,” you are predisposing them to value you less, not more. If you want to be able to charge higher, more appropriately profitable fees, you have to create the proper context. The verbiage and terminology you use directly impacts that context.
I have a couple of complimentary (as in free) business-building tools that shed a ton more light on all of this and will help you course-correct in your own business. If you don’t have them yet, be sure to go get them now.
How about you? Why did you go into this business? I’m assuming a large part of it is that you love putting your administrative talents to use and helping clients and truly making a difference in their businesses and lives.
I can’t imagine that it gives anyone joy to be broke and working too hard for too little money. So over and above that, how do you want your own life enriched and improved by owning and running your own business? What are your money aspirations? What does “profitable” and “financially successful” mean to you?