Dear Danielle: How Is the Economy Affecting Our Industry?

Dear Danielle:

I am considering starting an administrative support business.  I have been self-employed for 10 years and know about the hard work and research which goes into embarking upon entrepreneurship. I would like to know how the economy has impacted this business. On one hand, I can see businesses downsizing employees and benefiting from hiring administration support without the extra costs of taxes and providing benefits, which is more cost effective to their bottom line. On the other hand, I can also see how some businesses would think hiring a virtual assistant can be another added expense to their bottom line. Any feedback from you would be greatly appreciated DA

Thanks for the question and I’ll do my best to help shed some light so you can look at this another way.

You see, I always struggle with questions like this (which is why it has taken me this long to answer) because… well, how do I say this… it’s not the right question to ask. Not that you are wrong for asking. I’m here to help. 🙂

So let me try to explain…

The first thing I want to help you get a clearer understanding about is the fact that virtual assistants are not “outsourced help,” replacement staff or contract workers (a contract worker is a legal term for someone who is an employee of a staffing company).

In fact, if you read any of the back posts on my blog, you’ll see that I don’t like the term “virtual assistant” at all as it miseducates clients and industry newcomers alike and sets wrong expectations and perceptions right from the get-go (this is why we use the term Administrative Consultant).

On top of that, when you are running a business, you are not anyone’s assistant any more than, say, an attorney is an assistant to their clients or a coach is an assistant to their clients and so on. Just because you “assist” people, doesn’t make you an assistant. You see?

As someone in this profession, you are providing a skilled professional service, no different than an attorney, an accountant, a bookkeeper, a coach, a designer or what have you.

All of these professions, ours included, requires a high degree of specific skill, experience and expertise. We aren’t replacement workers. As administrative experts, we are providing an expertise—the expertise of administrative support—to businesses that require our particular skills and knowledge.

Once you understand things from that perspective, the question isn’t about how the economy is affecting companies that are downsizing. Those aren’t your clients. Because anyone who is simply looking to replace employees at a cheaper cost is not looking to value the skills or the relationship and is only interested in saving money. If you make those folks your clients, you can bank on always being on a hamster wheel trying to fend off competitors willing to work even cheaper than you.

Which leads me to my next point. You will need to educate yourself about who you are seeking to work with and what their motivation is in hiring you.

When you seek the right clients, the economy has no bearing on anything at all. Because by working with the right people (and you only need a handful of ideal retainer clients to do really well financially in this business), you will be creating your own economy.

You want to focus on a market that truly has a need for the expertise you offer, not the ones whose initial motivation is looking for cheap right from the get-go. So let me walk you through this thought process…

Who is going to truly need and value having an administrative partner? Is it the big company who can afford their own employees or who is only looking to reduce their bottom line? Or is it the solo and boutique companies who run smaller scale operations, often from home offices of their own, that don’t warrant employees  or don’t have anywhere to put them even if they wanted them, but who still need the support and understand how it will help them run a more profitable business and make faster progress? Who do you think has the greater need for what we do and will therefore place a higher value on it because it has more meaning to their business success?

This is why the economy has no bearing once you understand who your market is. Those who need and value what you are in business to do will pay because people who want or need something, prize it more highly and place greater importance on paying well for it. Which again, makes the whole question about the economy irrelevant because you are only going to seek a market and ideal clients who need and value the expertise and are able and willing to afford it.

So your task as a new business owner in this profession is to find a target market who a) has the highest need for what you are in business to do, b) can be found easily enough in order to market to them and fill your practice, and c) earns enough money to pay for professional level fees.

Always remember, you can’t afford to work with anyone who can’t afford you (not my quote, but one I love a lot although I’m not sure of its origins).

Hope that helps!

2 Responses

  1. Laura Murphy says:

    Above, you listed one of the criteria for good clients as, “earns enough money to pay for professional level fees.” Is there a way to suss out this information? Is the Administrative Consultant supposed to perform a credit check on the company, or is it more a process Q&A? I’m not in the biz yet but am extremely appreciative of your no-nonsense approach to it, and I thank you for sharing what you know!

  2. Hi Laura. Great question 🙂

    It’s true that it’s always the task and homework of every business to suss out that information. And it can be done in several ways.

    One way is to make sure you are focusing on a target market that can afford you. What is meant by that is they must be earning well or at least sufficiently enough that they have enough of an income that it’s not going to be difficult to pay for professional services.

    For example, I often hear people in our industry (typically new) who say they want to focus on mom-and-pop shops. “Those people REALLY need me!” Well, they might really need someone like us (and honestly, that’s something they determine, not you). The problem, however, is small mom-and-pops are often the poorest businesses out there. If they can barely keep their own head above water, what makes you think they’re going to be able to pay you?

    So it’s a matter of choosing a profession/field/segment of a market that actually has money. Otherwise, you will go broke trying to squeeze blood out of turnips and there is nothing more de-energizing and demoralizing as having to constantly chase after your money to get paid.

    So that one area where the homework comes in… you’ll have to do some research on any target market you select to educate yourself as fully and knowledgeably as you can about who they are, what they do, how their businesses are set up, how much they typically earn and so forth. The bottom line, is it a healthy industry where there are enough folks who are doing well enough that they could afford to be your clients?

    The other way to help ensure you are only dealing with folks who can afford you is to prequalify clients. Your website content helps do some of that by being clear about who you are in business to serve and who you are looking to work with. If it’s doing it’s job well, it will speak the language of and attract just the folks you are specifically looking to work with.

    Simply requiring a consultation is another way to screen clients. Those who are more serious about seeking your support will be amenable to the process and it will help deflect those who aren’t. Of course, you only want to conduct consultations with the most serious of prospects, so adding some kind of questionnaire or form to your consultation process (either on your website or something they need to fill out and email back) is another way to glean the information you need about them (which could include whether or not they make a certain income level, for example) to determine whether this is someone who can afford to work with you and meets any other criteria you may have for those you choose to work with as clients. Their answers will inform your next steps which might be scheduling the consultation or providing them with other of your information resources (e.g., a client guide or video that explains a bit more about your business). With regard to the latter, for those who are only “looking” and not quite at the level that they are seriously looking to partner with someone, this will help educate them and move them further along in the process without requiring your own hands-on time.

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