Archive for November, 2011

Dear Danielle: Should I Get Payment Up Front?

Dear Danielle:

I have a billing question. Should I ask for payment up front or after the work is completed? –KH

You don’t mention whether this is for project work or retained services. Either way, I have some advice for ya. 😉

If you’re doing project work, it’s definitely a good idea to get some kind of up-front payment. Here’s how I do it in my business… if it’s under $500, I tend to require full payment upfront. If it’s anything over that, I require 50% upfront.

Remember, you aren’t a client’s bank and they need to have some skin in the game. They’ll take you and the work you are doing for them more seriously. Plus, getting at least some payment upfront will not only help mitigate your losses should you end up with a dead-beat client, but it will help avoid working with flakes in the first place.

When it comes to providing ongoing support work, clients are usually charged an upfront fee called a retainer. By it’s very nature, it is upfront because they are retaining your services in an ongoing relationship and guaranteeing your time and their place on your roster. There is no deposit or 50% when it comes to retainers. It’s in full, upfront.

Here are some older posts related to this topic that I think you’ll find useful as well:

Help! Client Not Paying!

How to Avoid Getting Stiffed on Payment

You want to also check out these categories on my blog here:

Getting Paid

Hope that helps!

How Billing by the Hour Is KILLING Your Business

When your income is tied to how many hours you can sell, you automatically limit your earning potential because there are only so many hours in the day. This is exactly what you’re doing by charging by the hour in your business.

What I bet you didn’t know is that the hourly billing model is a relatively new artifice. In fact, there was a time in the not too distant past when everyone charged for their services based on value, not by the time it took.

Administrative Consultants and virtual assistants are giving all this wonderful support and expertise to clients and helping them succeed, while they are just barely scraping by in their own businesses.

I know how little people are earning in this industry and how much they struggle to stay afloat because of it, and it’s evidenced every year since 2006 in our annual industry survey.

This is when we start to see them grasping onto straws or making a mass exodus into another business entirely. They think, “I just need to turn the work into a factory and hire all these subcontractors to do the work. Then I’ll make more money.”

But they soon find out that that is a much bigger, more complicated and involved business to run than the one they had, one they might not have bargained for or enjoy. It’s also not necessarily one that earns any better because the profit margins have decreased further while overhead, administrative time and expenses have doubled or tripled.

This new video explains all the many ways that billing by the hour is keeping you from earning well and serving clients better and what to do about it.

I am here to tell you that it is ABSOLUTELY possible to create a beautiful, well-earning (even into six figures) solo or boutique administrative support business that doesn’t have you killing yourself or feeling icky in any way.

If you’re ready to get out of the hourly billing trap so you can stop trading hours for dollars and start making the kind of money you can actually live on and sustain your business, be sure and check out my Value-Based Pricing & Packaging Toolkit. I can show you how to change all of it around in your business AND create a simpler, easier business to run on top of it!

What You Need to Know About Subcontractors

I see so much confusion and ignorance about subcontractors in our industry. I say “ignorance” because so many aren’t so much confused as they are completely uneducated or misinformed about what a subcontractor is and how you work with one.

The very first thing to understand is that subcontractors are not part of your team.

There are legal implications to saying someone is part of your team. And the fact is, no one is legally part of your team unless they are an actual employee.

So what is a subcontractor?

A subcontractor is no different from you–an independent business. When you hire a subcontractor, you are a client to them, just like any of their other clients. They are not part of your staff. They don’t “report” to you. You don’t manage them. You don’t supervise them. You don’t “train” them. You don’t get to dictate their schedule or how they do the work in any way. There is no special “employee I don’t pay taxes on” privilege here. This is the law, plain and simple.

It’s only called subcontracting because they are doing work on behalf of your company. That is, you have outsourced (subbed) your own company’s service (the thing you are in business to do for clients) to another company. It’s sort of like ghost-writing. They are doing something for you as if they were you. They don’t get credit for the work because it gets delivered to your client as if it were your work.

It’s also typical that they accept the work at a reduced rate because the clients are yours, not theirs, and you need to maintain some kind of profit margin.

There’s a place for subcontracting. Just not in the way that many are doing it in our industry.

First, many are flat out violating the law. You do not get to work with what amounts to an employee, but pay them as an independant contractor. And if you are operating what you term a “virtual staffing agency” or similar, you are running nothing more than a temp agency, just like any other. And unless those “staffing” people you are hiring out are your employees, you are violating the law.

Second, even when using subcontractors correctly, you make it far more difficult to command professional fees and earn well because you have commoditized the work and devalued the relationship. When you do that, it lowers the perceived value in clients’ minds and they are less willing to pay well.

If you must use subcontractors (and like I say, there’s a time and place for them in any business), here is my advice:

  1. If your business model is one where you are merely farming work out to other companies (i.e., subcontractors), that’s certainly a viable business model. But it’s not one of administrative partnering. It’s the low-quality, assembly-line, McDonald’s of service models. Get clear about that.
  2. To be in compliance with the law, do not call subcontractors part of your team because they are not. They don’t need to be on your website and they don’t need to be given credit for the work. Anyone who subcontracts for you needs to understand that as well. Subcontracting is generally just a means for people to supplement income and revenue streams in their business. If they want to be recognized and get credit for the work, they need to get their own clients. 😉
  3. Never outsource your core competencies. You can’t outsource a relationship and this is the very core of administrative partnering. It’s part of what makes it so valuable and why clients are willing to pay more for it. You can’t build with a client the kind of shared body of knowledge, intimacy, intuition and understanding of a client’s business if all the work is spread out over many subcontractors.
  4. Rather than turn into a McDonald’s subcontractor farm, and being forced into becoming a people manager and volume-driven, assembly-line style business (what Seth Godin refers to as “racing to the bottom”), partner with your own Administrative Consultant. Just one client can pay for the investment, and it opens all kinds of income and freedom possibilities for you. When you get support for yourself in your business just like your clients are getting support from you, you create more “space” in your business, more time to work on your business, you can take on more clients if that’s what you want to do or just have more time away from the business. All without the issues of reduced profit margins, multiplied and complicated administration, and need for volume of clients that a subcontractor farm comes with.
  5. Set everyone straight who comes to you wanting to “add you to our virtual work team.” Whether that’s a colleague who wants you to subcontract or a potential client, that kind of language is your first clue that they don’t understand the nature of the relationship and what they’re really looking for is an “employee they don’t pay taxes on.” If they are to be salvageable, you’ve got to have a frank discussion with them about the fact that while you might be very happy to work with them, you are not part of their team, you are an independant business just like their attorney, their accountant, their web designer, etc. This is really important because of the legal ramifications of clients talking about you as if you were part of their company, and it is both irresponsible and unethical to let them continue to believe or understand otherwise.

You Are Not an Assistant

From both a legal and practical standpoint, the fact is when you are in business, you are not anyone’s assistant.

The term “assistant” is a term of employment, not business, and shouldn’t ever be used in your business relationships and conversations.

When you stop calling yourself an assistant, you’ll get less pushback from clients when it comes to your fees.

People automatically equate “assistant” with employment. So when you call yourself an assistant, you predispose clients to balking at your fees because they don’t understand why they would pay you more than they would any other in-house employee/assistant.

You can talk until you’re blue in the face about your standards and boundaries and that you are a biz owner, that you have your own taxes and expenses to pay, yada yada yada–but you negate all of that when you call yourself an assistant.

It’s all about positioning and using the right words to pre-set proper expectations and mindsets–all for vastly easier conversations and more successful relationships with clients. You’ll always have more problems when you call yourself an assistant.

When you frame yourself instead as an expert in the art of administrative support, it’s a whole other ballgame. People EXPECT to pay experts professional fees. Instead of looking at you as an employee they don’t pay taxes on, they view you as a professional who is hired for a particular expertise that will help them meet a solve, solve a problem and move forward and improve their businesses–in our case, that’s the expertise of administrative support and guidance.

Another reason to stop calling yourself an assistant is to reduce the likelihood of the IRS (or your country’s similar governing agency) determining you are an employee and going after the client for back taxes and penalties for misclassification of employees.

This is one of the many, many reasons we as an organization moved to the term Administrative Consultant.

If you’re not comfortable with the word “consultant,” call yourself an administrative partner or administrative expert or administrative specialist… ANYTHING but assistant.

Dear Danielle: How Do I Get Over Blogging Writer’s Block

Dear Danielle:

There are so many things to consider in starting or re-starting a business, as I’m sure you know. At this point, there are so many different marketing avenues to promote our business and the industry as a whole.  Let me tell you, I am so excited about this up and coming ‘virtual’ profession.

One of the areas I was going to start off with again is a blog. And you are correct – sometimes it’s difficult to come up with ideas or topics to talk about. Frankly, sometimes I even think before I start to write ‘What could I possibly have to say that may make a difference in someone’s life?’ or ‘Do I really have anything to offer to benefit the VA industry – individually and as a whole?’

Do you have any suggestions on how to overcome this writer’s block or how to research what topics would be interesting to my peers and potential customers?

Oh, you know I do. 😉

My first bit of clarity for you is to stop thinking you need to write for your peers and the industry. You are wasting your business building time and energy.

I can’t tell you how many people I see and mentor who complain about not having clients and needing to get more clients–and then waste all their time and energy talking to and blogging for each other instead of their would-be clients!

You may have heard the phrase “wasted real estate” when experts talk about how business owners waste valuable website space with content that has nothing to do with anything when it comes to attracting clients and being of interest to them.

In the same way, you don’t need to be writing for your peers or for the industry. They are not your clients. If that’s what you’re doing, you’re wasting one of your most valuable pieces of marketing and networking “real estate.” If you are starting your business or trying to grow it and attract more clients and be of service to them, write your blog for them.

And my second bit of advice for getting over writer’s block is to get a target market.

(For those who don’t know, a target market is a specific field, industry or profession you focus your business support on.)

Of course you will be at a loss as to what to write about when you don’t know who you are talking to. When you try to write for anyone and everyone, you end up being interesting to no one.

This is yet another way having a target market helps you:  it gives you clarity, focus and direction. When you know who you are talking to, it’s easier to know or figure out what is going to be of value, use and interest to them. And this is what will help make your content far more interesting, useful and compelling.

A few other little blogging tips:

  • Make sure you have several ways for your target market to subscribe to your blog. First and foremost, use a service like Aweber which will help you build your list and automate the distribution of new post notifications to these subscribers. Make the subscription form your most prominent feature in your upper right sidebar (“above the fold”).
  • There will be people who prefer to subscribe by RSS or with things like Networked Blogs. Give them those options as well. However, if you are interested in building your list, you may want to feature those options less prominently.
  • Give your blog a title and/or tag line so that your target market knows instantly that your blog is especially for them.
  • Survey your subscribers periodically. Pick their brains. Ask them questions. Your blog isn’t just a way to connect with clients. It can also be an excellent research tool for getting to know them better and find out more about what their challenges and common goals and interests are in business–which is going to help you in your business and offerings to them as well as knowing what to write about for them.

Dear Danielle: Will Certification Make Me Look More Professional?

This question comes up frequently. And I often see  newcomers to the industry being preyed upon due to their mistaken belief that “certification will make me look more professional.”

The fact is, no one’s little piece of paper is going to make you look more professional.

The only thing that will make you look more professional is by DEMONSTRATING your expertise and competence and skills in everything you do.

That includes how your website looks, how you speak, your message, your business operations and processes… These are the things that make you look more professional.

In over 14 years of business, I have never once been asked by a client if I am certified. They simply do not care.

And it’s not something that ever occurs to them to ask when every other demonstration to them indicates that you are professional, credible, trustworthy and competent.

Sadly, many people will waste their precious time and money on certifications that will have absolutely nothing to do with getting clients and whether they succeed or fail.

I’ve written about this topic extensively on my old blog and have just moved all these posts over to the new blog here under their own category called “Certification Is a Joke.”

If you are thinking about paying for certification in our industry, read the posts I’ve written on this subject first.