Archive for the ‘Business Categories’ Category

Do You Understand the Difference?

Sometimes I’ll read things from other people in our industry, and I have to wonder whether they understand the difference between a project and providing support.

In case you’re confused, I thought I’d talk about it here…

A project is something that is basically one-off, one-time work. It has a start and a finish.

Web design is a good example of project work. It’s a one-time gig where you are hired specifically to do that one thing and that one thing isn’t ongoing because there is an end date, which is the completion of the site design.

Support, on the other hand, is something that is ongoing.

In the case of administrative support, it’s a body — a package — of any number of administrative tasks, roles and functions in a business that are recurring and continuous throughout the life of that business.

For example, you don’t just return one customer’s call and that’s it, you never have to call another customer in your life, right? Of course not.

So customer service is just one aspect, one area in a business in which you will have to engage in any number and kind of tasks and actions throughout the life of the business. There is no beginning and ending like with project work. It is ongoing.

When you understand the differences clearly, you can begin to better distinguish categories of work and services in your business so that you can create more revenue streams and make more money.

That means you can group all kinds of administrative support into retainer packages and then charge separately for specific projects and other work unrelated to administrative support.

Adding to that Thought

In our group last week, I shared a fun story from the blog of one of my favorite marketing guys — Mark Merenda — about the cost that do-it-yourselfers and micromanagers incur in their businesses.

A sign his auto mechanic keeps in his shop illustrates the light-hearted point perfectly:

Labor — $95 per hour
If you watch — $125
If you offer advice — $150
If you worked on it already — $175

How many clients have we all known who need a little sign like this from us?

I took this idea a step further and added my own twist:

If you want me to show you how to do it yourself — $5,000 tuition and $500/hr after that.

This is sort of related to my post last Friday (That Is Not Your Client’s Burden) where I was talking about the real reasons your fee is your fee and why what it costs you to be in business shouldn’t be part of your conversation with clients.

You can’t put a price tag on all your years of unique talent, experience, training, continuing education, etc., that went into (and continues to go into) you being great and smart and expert at what you do.

And, for me at least, I’m not in the business of training.

If that’s what I wanted to be doing, that’s what I’d be offering in the first place. ;)

Dear Danielle: What Is Your Start-Up Advice?

Dear Danielle:

I am starting a Virtual Assistant business to augment my income. I have a full-time job that I am intending to keep. I’ve been working remotely with a client for more than a year (limited hours; I have a lot more on my hands). I consider that as a Virtual Assistant client. I want to expand. I want to have a couple more clients. I do tech stuff (web/blog set-up, SQL server database, report development, computer upgrades, etc). Is there any advice you can give me? —RM

The first thing I’d advise you to do is get clear about what category of business you are in.

Just because you work “remotely” doesn’t mean you are Virtual Assistant.

The kind of work you just listed is not Virtual Assistance. Virtual Assistance is administrative support. The things you listed are more IT/tech support.

Here’s what I mean:  If someone needs a plumber, they aren’t going to go looking for one in the Yellow Pages under “lawyer,” are they? Of course not.

You have to use the proper terminology so people will understand instantly what you do and where/how to find you.

Also, consider how much of a commitment you have to offer clients if you are working part-time. Their business is important to them. How much time and energy for them are you really going to have after working all day? How long do you think you can keep up a pace like that?

I’m not saying it’s impossible, but it can be really difficult, not to mention stressful and exhausting, to provide a professional level of service and delivery to clients if you are still working a part-time job.

I will tell you that if IT stuff is what you do, one of the biggest advantages you could have over other IT freelancers is starting an actual, real live committed business.

One of the HUGEST frustrations I’ve had in business is trying to find and work with IT pros on a freelance basis. They were so flaky and inconsistent most of the time. And because they weren’t in actual committed businesses, they didn’t have business-like policies and procedures in place and their service was really spotty and it took them a long time to get things done.

And if their priorities or interests changed, I was left holding the bag when they decided to move on to other things.  I’d have to start all over again with someone new (after pulling my hair out once again just trying to find someone else).

(Knock on wood–I’ve got a FABULOUS, WONDERFUL programmer and IT pro now.)

As an IT pro, you would give your would-be customers so much more trust and peace of mind if you offered them a committed business, one that wasn’t just working for some extra side money and they could rely on being there today and later down the road whenever they needed you.

Dear Danielle: How Much Can I Expect to Earn in this Business?

Dear Danielle:

I’m still in the market research phase of starting my administrative support practice. Recently, a colleague and I were discussing yearly salary and work hours with her practice, and I was wondering if your experience has been similar to what she’s explained, before you got into training and from what you know of others in this business. Here’s what she said:

“I consider myself well established now. Despite this, I work between 15-25 billable hours a week and another 20-40 non-billable hours each week (on marketing, accounting, non-billable matter, etc.).”

My research suggests that someone who’s been in business for five years could anticipate gross earnings of approximately $30,000 per year. However, very specialized people make far more (in the range of $40,000 to $55,000).” –RD

If after 5 years someone is still only making $30,000 a year, there is a something seriously wrong in their business. They haven’t done proper business planning, are not charging appropriately and most like are charging hourly rates (selling hours/time) instead of setting fees based on value and results.

If you base your income on how many hours you have to sell, you will always limit your earning potential. I teach people how to use value-based pricing methodologies instead. Once you increase your business knowledge around pricing and how to price, package and present your fees and support plans, your earning ability goes up dramatically. In fact, you can earn more working with fewer clients that way.

Before we talk about what you can expect to make, I want to first make sure we are on the same page about what this business is about. This is important because your understanding of this will directly impact the profitability of your practice.

You mention the word “specialize.” What this usually indicates is a fundamental lack of understanding about what administrative support is.

Administrative support is already a specialty in and of itself. An Administrative Consultant is someone who specializes in providing ongoing, right-hand, across-the-board style administrative support. That’s an important distinction to understand for a few reasons.

For one thing, it’s a completely different business model from, say, a secretarial service, which is in the business of providing individual, transactional, project-based secretarial services.

They’re the Kinko’s, so to speak, of the administrative world. And the reason it’s important to understand the difference in these business models is because the businesses earn money in very different ways, they operate very differently, they have very different labor and administration needs, expenses and operating costs, and they market very differently and attract a completely different kind of clientele.

However, the very most important reason to understand the distinction is that these two business models deliver completely different solutions.

Administrative support is a relationship, one where you’re providing a long-term, more impactful and integral solution that supports the client’s business as a whole and where the focus is the ongoing dynamic and evolving work relationship.

A secretarial service is more like a one-night stand, where what is provided is a quick transaction where the focus and sole purpose is the completion of a single project or task at hand.

As you can see, then, administration is a specialized function already. It’s also work that is inherently ongoing. So going back to what it means to specialize, we already have a specialty: ongoing administrative support for clients we work with in continuous, collaborative relationship.

If someone specializes in some other function, then they are something else completely. For example:

  • If someone specializes in marketing, they are a marketing professional.
  • If they specialize in web design/development, they are a web designer/developer.
  • If they specialize in bookkeeping or accounting, they are a bookkeeper or accountant.

Your colleague is confusing specialization with categories of business. What you specialize in IS the business. If you specialize in administrative support, you’re an Administrative Consultant.

People in our industry also commonly confuse specializing with the tasks involved.

When we talk about specialization, what that really refers to is not the work or tasks, but rather a target market.

Those who specialize in a target market (which is simply a field/industry/profession you cater your administrative support to) have a much easier, quicker time getting started and gaining clients. That’s because it provides them with greater focus and direction.

Now, that’s not to say that you can’t offer additional related services and support. The point I’m making is just because you offer something else doesn’t make it all administrative support. Web design is web design. Bookkeeping is bookkeeping. Marketing is marketing, and so on. These are each their own separate and distinct professions and categories of business.

There are lots of folks who offer creative and technical services in addition to their administrative support. But that doesn’t make those additional services or divisions or specialties in their practice the same things as administrative support.

They are still distinct from one another.

This is all very important because your understanding of these distinctions will directly impact how you structure and charge your fees to earn well.

Is this becoming clearer to you?

If so, you can begin to see that your ability to charge well doesn’t have to do with specializing in any one task.

As an Administrative Consultant, you already have a specialty (that of ongoing administrative support).

What earning well in this industry has to do with is your view and understanding of your value and the solution you are in business to provide, how you frame and portray yourself as a professional,  how you effectively articulate your value to your desired clientele in the context of their needs, goals and challenges, and the pricing strategies you employ to focus them on the value and benefits rather than hours.

Earning well also doesn’t have to do with how long you’ve been in business or how many billable hours you have at their disposal.

(And if after five years someone is still only earning $30,000 a year, there is something seriously wrong and need to get the help of someone like me).

Those who intimately and more deeply understand the solution they provide and its value to their target market have much more confidence.

This understanding, in turn, allows them to have more effective, resonate, compelling conversations with clients and command professional fees.

Those fees can earn them well into six figures, but you only get there by doing things smartly and strategically. It will require some shifts in thinking about the pricing you offer clients. People who are still stuck selling hours in their retainers don’t commonly earn into six figures.

I really recommend you get my marketing guide. It will walk you through a systematic, step-by-step process of understanding more deeply and clearly the solution and value you provide to clients, choosing a target market, profiling your ideal client, and then putting it all together to come up with your own unique value proposition.

You can also get off the hourly rate merry-go-round (which drastically limits your earning potential) by learning how to implement value-based pricing and how to focus clients on value and results rather than selling hours.

Dear Danielle: Should I Provide Bookkeeping or Not?

Dear Danielle:

I purchased some of your business products this week and Love Them. One question, in the price section of services and throughout some of the contracts it states this contract does not include bookkeeping. Is it normal to charge more for the bookkeeping service? —IK

There’s no “normal” way to do things. The great thing about being in business is that you get to decide whether or not you want to include something in your administrative support.

What I wanted to do by separating bookkeeping in the contract template was bring it to your attention that bookkeeping is a different service, skillset and business altogether from administrative support.

You see, a lot of people in our industry (dare I say, most of them) struggle to earn well. A lot of times that’s because they don’t understand what they specialize in (i.e., administrative support).

And what they do when they don’t understand this is they lump everything together.

By not differentiating that administrative support is a skill and value that is separate from other categories of business, they deprive themselves  of the opportunity to create another stream of income in their business.

So you can decide whether or not you want to provide bookkeeping in with your administrative support.

Maybe you decide that bookkeeping is a category of training and knowledge (and value) that is completely separate from administrative support and therefore warrants a separate charge to clients for that work.

You might even decide to offer a completely separate retainer or add-on fee for that work.

On the other hand, you might not be a bookkeeper at all and decide not to provide it whatsoever (it does require special knowledge, skills and training and there’s a great deal more liability when you are dealing with someone’s money and finances after all).

In that case, you would simply let clients know that bookkeeping is a separate industry/profession from administrative support and refer them to some fabulous bookkeeping experts you know of (it’s always a good idea to connect with experts in other fields so that you can refer clients to each other).

Hope that helps!

Dear Danielle: What Bookkeeping Software Do You Recommend

Dear Danielle:

I am contemplating starting my own virtual assistant service run from my home office and specializing in tax preparation and bookkeeping. I have been looking at software, namely Quicken, Quickbooks and Peachtree, and I can’t decide on which one to use. Is there a popular one that is used by others in this profession? —AC

The questions I focus on in here mainly have to do with helping folks understand business concepts and principles, particularly as those things relate to the Virtual Assistance business, which is a unique model in and of itself.

However, your question does bring to light the fact that you are not understanding what Virtual Assistance is.

The business you are thinking about opening isn’t Virtual Assistant business. It’s exactly what you called it–an accounting/tax preparation/bookkeeping business. That’s not the same thing as Virtual Assistance.

True Virtual Assistants (that is, those who practice the business as the model and profession was originally conceived) do not focus on one service. What they’re “selling” isn’t line-items services nor is it one specialized kind of service such as bookkeeping or transcription for example (those would be called Bookkeeper and Transcriptionist respectively).

The specialized service that Virtual Assistants are “selling” is an ongoing, continuous, collaborative (most often retained) relationship in which they support clients in some kind of across-the-board administrative capacity. So what makes something Virtual Assistance is that the service is:

  • Administrative
  • Ongoing, continuous
  • A package of across-the-board administrative support
  • Conducted within the framework of a collaborative relationship

From a marketing standpoint, it’s very important to call yourself what you are. If your focus is on bookkeeping/accounting, then that’s what you want to call yourself. That’s how your prospective clients will find you and how they will know and understand exactly what you do.

PS: Get hooked up in the bookkeeping/accounting profession listservs, forums and organizations. Since that is the profession/specialized service you are talking about entering; they will be your best source for current industry knowledge regarding software and such. :)