I am always curious and have asked lots of people.  I am wondering just how you pay yourself.  Do you pay yourself sick/annual leave?  Aside from overhead costs, do you deduct taxes?  What kind of taxes do you face, ie, self-employment, FICA, etc?  Your help is greatly appreciated. –SH

Seems like such a simple question, doesn’t it?

You don’t mention what your business formation is and that’s going to be very relevant to how you pay yourself and what your tax and reporting legal obligations are.

The very, very first and most important advice I can give you is that you need to get yourself–quick–to an accountant or bookkeeper. And I don’t want to hear any whining about how that would cost you money. Yeah. Business costs money and you are simply going to have to spend money on important professionals and advice if you want to be successful. Not doing so now could end up costing you far more later. And given how you’ve asked the question, I can tell there are some significant gaps in your business knowledge that will do you great harm if you don’t get the right professional guidance and advice.

In the meantime, here is some general information when it comes to paying yourself in business (and, understand, this is for U.S. based business; you’ll have to bone up on your own country’s laws and taxing requirements if you reside and operate elsewhere)…

The first thing people need to understand is that they are either an employee or they are a business. I see so many people who decide to “work from home” or “freelance on the side” or become an “independent contractor” who don’t realize this. There is no third classification. If you are working for yourself, no matter what you call it, you are a business. Even if you might have an actual job as an actual employee somewhere, whenever you are wearing the hat of “freelancer” or “independent contractor” or whatever you want to call it, you are operating a business during those times. You MUST understand this because there are legal implications and obligations.

So that’s the first thing to understand, and the reason I mention it is because the way you ask the question, I’m not sure you entirely understand that.

If someone doesn’t have this understanding, it’s pretty safe to bet that they haven’t done any official or intentional business formation. When that’s the case, they are by default running a sole proprietorship. In a sole proprietorship, which is the simplest and most common business formation to operate, you simply take money when you want and how much you want. For bookkeeping purposes, these are recorded as “owner’s draws.”

The question about sick leave and vacation pay is moot in this circumstance. You simply pay yourself when you want and how much you want (well, that is, if the money is there, lol).

I would always advise you to keep separate accounts for your business. (In fact, there are some circumstances where you are required by law not to comingle your business and personal funds). Either way, at some point, you will want to “pay” yourself from the monies you have earned in your business. All that is entailed is simply withdrawing funds like you would any other account. So, for example, if you went to the ATM and took out $X dollars for your personal use, you would simply record that as an owner’s draw. Same thing if you transferred funds from your business bank account to your personal bank account or if you wrote a check for something for personal use. Anything that goes out of the biz accounts that is not related to the business is recorded as an owner’s draw.

That said, being in a sole proprietorship doesn’t mean you are exempt from paying employment taxes. It’s just that you pay and report them differently than you would if you were an employee, where actual paycheck processing is required by law. In a sole proprietorship, you will pay what are called “self-employment taxes” and they are to be estimated and paid/reported at certain, specific intervals.  You’re going to want to set aside a percentage of funds every time you receive client monies so that you have enough when it becomes time to pay these taxes. Here again is where an accountant or other kind of financial advisor can give you guidance.  (For more info on U.S. based self-employment tax reporting, start here)

While a sole proprietorship is the simplest/easiest business formation to operate, it also is the one that puts you at the greatest legal liability should a client sue you for any reason. All your personal income and assets are at risk in a sole proprietorship. This is why many folks opt to go into some kind of corporate business formation where personal assets are not at risk (or are, at least, at less risk). There are many kinds of corporations which also involve varying complexities: corporation, LLC, PLLC, S-Corp, and partnerships to name just a few (consult with a business attorney to get the right guidance in selecting the formation that is best for you and your business circumstances).

This is where paying yourself becomes more complicated and where you will definitely want to seek the advice and guidance of some kind of accountant or financial advisor.

For example, in some corporate formations, you are required to pay yourself as an employee or as an owner/operator. When that’s the case, formal employment payment processing is required which entails a whole host there is a whole host of accounting, processing, reporting and taxing obligations you must abide by and be knowledgeable of. There may be some minimal salary requirements you must payself as an owner/operator. You may be required to pay out profits to partners and shareholders in dividends. Or you may need to know how to record reinvested profits back into the business. In other formations, while you report otherwise as a corporation, you may be allowed to elect to pay yourself in owner’s draw instead of with an actual employment check.

See how much knowledge is involved? And if you do things incorrectly according to your particular business formation, it could cost you big time later. So this is why it’s always, always best to seek the services of the right qualified professional–not other Admin Consultants or VAs–when it comes to these kind of matters. And if you do go with one of the corporate business formations and don’t have a thorough understanding of bookkeeping yourself, hire a bookkeper (one that also has paycheck processing knowledge for your state/locale) to handle that work for you. It’s just too important.

I do hope this helps you get going down the right paths though.

Is it possible to start a business like this nights and weekends if you are totally self-supporting and work Monday through Friday, 9-5? Thanks for your advice! –JN

Well, anything is possible. It’s just that there are some practical things as well as some caveats to consider.

First, you want to get clear about your goals and intentions for having a business. Are you looking to create a real business, one that will earn well, take care of you and your family, and support your dreams, goals and lifestyle? Or are you just looking to earn a little bit of a side income while you continue to work as an employee?

Either way is perfectly fine, but the former will require some real work, effort, education and commitment while the other is more of a hobby. Understand that running a real business and freelancing on the side are two completely different things.

And, of course, my advice is always focused on those who are looking to create real businesses. So when that’s the case, the other thing to consider is the client. How much of a commitment do you have to offer clients if you are working part-time? How much time and energy will you have left over for them during the evenings and weekends after you’ve already put in a full work day and week? How long do you think you can sustain that pace? What will you have left over for yourself and your family, friends and other interests? How might the lack of time for self-care impact the quality of your support and ability to grow your business successfully?

I’m not saying it’s impossible. But peoples’ stuff is important to them. And it can be really, REALLY difficult, not to mention overly stressful and exhausting, to provide a professional level of service and care to clients if you are still working a full-time, or even part-time, job. It really depends on how badly you really want this and how smart you go about it.

So here’s what I recommend…

1. While you are still working, set up the foundation of your business. That means, a) getting clear about what you intend to be in business to do and b) who you intend to work with (your target market and ideal client), c) start establishing your policies and procedures and d) getting your contracts and other forms together. All of this will be honed and adjusted over time, but you’ve got to at least get the start first.

2. Start working on your website. The more professional the better. Your business website is THE most important marketing piece in your business so don’t be penny wise and pounds foolish. Clients equate the professionalism of your site with the level of your skill and competence. If you aren’t the right person to design your professional site, hire a professional to do it.

3. Simultaneously, begin working out your job exit plan. This endeavor will affect your whole family so make sure you discuss the decision/goal with your spouse or partner and have their buy-in. There is nothing more difficult than starting a business when you have to also battle a resentful, unsupportive family.

Imagine your life while supporting a full roster of clients and how you will establish boundaries for clients, family and even yourself. The goal is to help everyone understand when it’s business time and when it’s family time. And for yourself, the goal is to honor your standards and boundaries–because we have equal culpability when we resent others by allowing them to step over those things in the first place. So those are going to be really important.

At some point, once you have your foundations in place, there will come a time when you simply have to make the leap and decide to commit to the business. But you never want to start broke. Magical thinking doesn’t pay the bills. So you want to figure out now how you will finance the business until it becomes self-sustaining and profitable. Do you have another income in the household you can live on while the business gets established? Do you have savings (or perhaps a severance) you can use to finance the business? Where else can you get capital for the business?

You want to understand that generally it takes any business about 5 years to get there and most fail in the first three years. This is probably the biggest mistake new business owners make. They don’t calculate what they need to earn and they don’t realize that they MUST not only earn a living, but actually a PROFIT, in order for the business to survive. I can’t stress this enough.

You want to go in with no illusions that you’re going to become an overnight millionaire sensation. Hey, I won’t say that’s impossible, but it’s not likely. It simply takes time. Go into it with your eyes wide open about that fact and you’ll be far better prepared for your success.

The good news is that the need for what we do as administrative experts has no shelf life. EVERY single business requires administrative so there will always be a need for what we do. And it’s one of the most inexpensive kinds of service businesses to operate because the overhead is so low.

“I am just starting out and doing lots of research. I was wondering if anyone has tried using classified and Yellow Pages for advertising. Also, if anyone could let me know other forms of low budget advertising, I would greatly appreciate it.”

Here’s what you have to understand about such advertising:  the amount of money you’d have to spend in order to make those forms of marketing pay off for you in terms of real clients (we call that “ROI–return on investment”), you would have to spend the kind of money–repeatedly and for a great length of time–that most new business owners simply don’t have. And even then, the ROI/conversion rate on that kind of advertising is generally as low as 1%.

That’s not a very good return for the money and effort expended. AND it won’t necessarily bring in specific clients you want to work with.

The good news is that there are alternatives to marketing professional services that actually work FAR better than classifieds and cost very, very little beyond your time and education. It’s called relationship marketing and it’s really very simple:

1. Get really clear about what you are in business to do.

2. Determine a target market. This would be a niche within a profession/industry/field that would have the most need and want for what you are in business to do.

3. Profile your ideal client.

4. Once you know very clearly what you do and who your intended audience is, you can gear your message specifically for that market on your website so that it attracts and draw to you exactly the clients you seek to work with.

5. Knowing who your intended audience is also helps you figure out where to reach out and connect with those likely prospects, both online and off. Once you find those avenues, you begin interacting. Speaking up and participating is what helps people get to know, like and trust you. You’ll begin to build relationships this way, people will send referrals your way and all the while you are creating rapport and establishing trust and credibility, which leads to more prospects contacting you.

Of course, this is where work and effort is involved. And while the steps are simple, getting them done does take some help. I’ve created a step-by-step guide to help folks accomplish this much faster and easier called Articulating Your Value: How to Craft Your Own Unique & Compelling Marketing Message. It’s helped a lot of people make huge hurdles in their business so check it out.

How exactly do referrals work?  Does the client recommend their colleague and I call them?  Do they contact their colleague and send them my way or what?  Thank you so much for your anticipated response. –TA

Well, basically, they work any way you’d like them to work.

Referrals come from lots of different places and come in many different forms.

Sometimes colleagues will refer clients to you. According to our annual surveys, the overwhelming majority of Virtual Assistants and Administrative Consultants follow the “what goes around, comes around” philosophy and don’t charge for referrals.  Others do charge referral fees or will want a percentage of any earnings from a client for a certain time period. You’ll want to get clear with the referring colleague as to what their expectations or requirements are.

You can also formally ask clients for referrals. For example, you could make it a standard question as part of your feedback process to ask clients for the names of folks they think would benefit from your support.

Your networking becomes a sort of referral source as well in that it helps you develop your word-of-mouth recognition. As you contribute and people read your posts, you become someone they come to know, like and trust. This leads to folks referring and recommending you to others.

You might have some sort of formal referral program that rewards people for referring prospects to you. Although personally, I really don’t recommend this for a professional service practice. There’s really no need and keep in mind, you would just be adding yet another burden to your administration and management workload.

Those who genuinely know your work and feel it’s worth recommending to other will do so of their own accord. Your evangelists aren’t looking to be paid–they simply believe in what you do and they want to be a resource for their own audience. Those who do end up giving great referrals to you, you can thank by sending referrals their way as well and maybe once in awhile sending a little gift.

As you become established with a happy roster of clients, they tend naturally to refer you to others when they get a chance. This is another form of word-of-mouth advertising that leads to referrals. But I would definitely recommend being proactive as well in specifically asking clients periodically for the names of folks they think could use or would be interested in your services.

Another thing I would recommend you get conscious about is your calls-to-action. In your signature lines and in your “About the Author” text (such as when you publish articles you’ve written), include a line that says something about welcoming referrals. This puts the conscious thought in people’s head and tells them that you are actively seeking clients.

Be clear as well about who makes an ideal client for you so folks know who to refer to you. “Any warm body” is not an ideal client. Just because folks refer people to you doesn’t mean those prospects are going to be the right fit. So you have to tell people who is the right fit for you.  “I’m looking for solo practice attorneys who would like to leverage some skilled administrative support in their business.”

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I have a client who only sells wholesale products with an occasional retail customer. I have convinced him to think about sending a mass email marketing campaign/newsletter for his wholesale customers since his previous website designer never even introduced this idea to him. His response was that he only sells to wholesale customers and is not sure what to send to them.  My suggestion was to send loyalty rewards, small one-time bonus, or a small gift thanking them for their business. Do you have any suggestions for a marketing campaign from a wholesale company to its customers? –LN

Nah, I don’t get into advising clients on how to market their businesses. That’s not administrative support and marketing consulting isn’t the business I’m in.

I might offer my views and suggestions from an administrative standpoint. I would also provide them with the administrative support related to executing and implementing many of their marketing activities and initiatives.

But beyond that, how they market their business is up to them. Or between them and their marketing consultant.

I think too many VAs are pressured into thinking that they have to fill ALL these other roles in their clients’ businesses. And that’s just not the case. The ONLY role you have to fulfill is the one you are in business to fulfill–administrative support. You will burn yourself out really quick trying to be all things, do all things, for clients, not to mention greatly diminish your effectiveness with all the constant switching of gears.

I mean, would you ask a plumber to fix your car? Of course not. They’re completely different kinds of expertise and lines of work.

Have opinions. Share ideas, resources and suggestions. Being a partner to clients means they get the benefits of your experiences and input. That’s definitely of value and they might learn or hear about something new because of that that they wouldn’t otherwise. But don’t feel like you have to take on roles you aren’t in business to take on.

And definitely don’t expend your time and energy being more invested in helping with something that the client isn’t even interested in. You can’t care more about their business than they do themselves.

I am just starting out as a Virtual Assistant. What software do I need? –JD

I get some form of this question three or four times a month–at least. And sometimes it’s the simplest questions that are the hardest to answer.

Long, exhaustive lists really aren’t helpful. Because one person’s preferences in software are not necessarily going to be the same as the next person’s.

It also matters what kind of business you will be in. For example, someone in the administrative support business (which is what we talk about here) is definitely going to need all the usual office types of software. That should be common sense, right? But someone who does design work and creative services will have more of an emphasis on that kind of software and probably more of it. You see?

Also, you don’t have to have every kind of software in the world to start out. The kind of work you support your clients with is going to dictate what software tools you’ll need. But beyond the basic office software, you won’t necessarily know what you need until you start working with clients. That’s when you start picking up additional software and tools–as you go along and determine you need them. So relax–you can stop stressing about this.

What I can give you isn’t a comprehensive list of what everyone in the industry “needs,” but rather a list of the software tools I use in my practice.

Basic Office Software

• Microsoft Office Suite:  Word, Excel, PowerPoint, Access, Publisher, OneNote. Honestly, I would just get all of these if you can. They will all serve you well throughout the life of your business. And they are the group of software that is most used throughout the world for business. You need to work with the programs that are predominately used by your clients and the rest of the world and these are them.
• Open Office (free). This is a great backup to the Microsoft line of products. I especially love the Draw component for diagramming. But there are still enough quirks that make it an unsuitable suite to rely on entirely. For example, I have all kinds of problems in OpenOffice when I’m dealing with any kind of legal pleading. For that reason, I can’t use it at all for my work with attorneys.

Email

• Microsoft Outlook. This is usually part of any Microsoft Office suite you purchase, but I wanted to list it under it’s own heading. There are other email clients out there that folks will recommend, but I absolutely love the ol’ tried and true Outlook. It’s versatility and functionality is beyond compare–most people only know of and use a fraction of what it’s capable of. I use it for everything.

Remote Access

• LogMeIn. Oh, I can’t forget this one! I seriously could not live without this. With this software service, where I have Internet access, I can log in remotely to my main home office computer and work as if I was sitting right there. This is how I continue working with my clients and taking care of my business when we go on road trips or when we’re in Germany. I don’t have to lug around thumb drives or external hard drives that can get lost or stolen, and I never have to worry about syncing computers because I’m always working on the one main computer–I just might not be actually sitting right there, LOL. Of all the remote access services out there (and I’ve tried several), this one to me is the easiest to install and use. I even get my clients set up with their own accounts and have frequently use this to log onto their computers to install something for them or troubleshoot.

Telephony

• Vonage. I absolutely LOVE Vonage. It’s a VoIP service, meaning it uses the Internet to deliver the phone service. Of course, that means if your cable or broadband is down or your computer is off, you won’t have service. But if you can overlook those two trade-offs, it’s truly fantastic. Not only does it give me a dedicated business line, but I can bring that line with me on my laptop anywhere I go–including Germany where we also live–and make and receive calls at no extra charge just as if I was still at my home office. There is no long distance or roaming in your service area (which is huge), and you can’t beat the fact that all the features you have to pay extra for with regular land line phone companies, come standard in Vonage. And you pay one set fee each month–you are never surprised with unexpected bills or constant nickel and dime charges. I will NEVER go with any of the big name, land line phone companies ever again.
• RingCentral. LOVE this service. I have two separate toll free numbers and my fax line through them. And what’s even more fantastic is that I can record custom greetings for each number and set controls to play certain greetings at certain times of day (like one during the day and one for after business hours). I can also set the controls to keep those lines from ringing on days that I am closed or after business hours. Fantastic!
• FreeConferenceCall (free). With an account, I get a set bridgeline with its own dedicated phone number. I use this when I do teleseminars or as a quick, easy way to have a conference call with two or more people at the same time.

Browsers

• Internet Explorer 8 (free). I really hate Internet Explorer and haven’t liked it since IE6. But I don’t like how any of the other browsers store/organize Favorites so I keep it around for that. Plus, if you do any kind of web design work, you need to test your sites on all the main browsers (of which, IE is still the leader) to make sure they render properly and are cross-browser compatible.
• FireFox (free). I really don’t care for FireFox that much either. I know. Everyone else loves it. Me, not to so much. But it’s the lesser of all the other evils so I use it.
• Google Chrome (free). This one is okay. It’s just a good, basic browser without any frills. Let’s put it this way, I don’t hate it. My programmer says it’s best for viewing videos, but it does sometimes crash when I use it for that. Not often, just sometimes. I sort of alternate between all three of these browsers to meet various needs. Too bad there isn’t just one good one out there that does everything well.

Media Players

• Real Player (free). This one is my favorite because it plays just about all audio and video formats.
• Windows Media Player (free). I think this comes automatically with Microsoft systems these days. All I know is I’ve had it on my computer from day one, but I really don’t use it at all.
• Quicktime (free). Same thing–I just keep it around for GPs. It’s sort of like browsers–each one serves a different purpose and it doesn’t hurt to have them all on hand in case you need’em. Although, the pro version apparently has some nifty video editing tools that I plan to explore (some day, LOL).

Computer System Maintenance

• AVG (free). I actually use the pro version which only costs the ridiculously low price of something like $60 for two years. However, if you are bootstrapping it, they have a free version that will keep you as protected as the Pro version. Norton and MacAfee are notorious resource hogs and definitely not worth the price. I’ve never once had a virus in my entire business life using AVG. Not once!!! (Knock on wood, LOL) But I’ve known plenty of people who got computer infections while running on the cumbersome Norton and MacAfee programs. Why those programs are even still in existence, much less that anyone uses them, is beyond me. Get the light, nimble and infinitely superior AVG–you won’t be sorry.
• CCCleaner (free). Love this. I don’t use it very often, but it’s a great tool for cleaning up those old, unneeded registry files that often get left behind and sometimes gum things up.
• Adaware (free). This gets rid of stuff that your built-in cleaners miss and that slow your system down. I couldn’t live without this. Definitely a must-have!
• Windows Defender (free). On my  main desktop computer, I’m still on Windows XP so this has been on there a long time. Not sure if it’s still the program Microsoft uses to automatically alert you to updates and downloads if you are on one of the newer operating systems. I’m pretty sure it’s different because on our various laptops that are running on the latest versions, I could swear it’s called something else, but don’t quote me on that. I think it’s even automatically installed so you don’t even have to sign up for it if you are on newer systems. But if you don’t have it for some reason, follow the link and you can download it.
• Belarc Advisor (free). This program is awesome! What it does is scan your system (when you tell it to) and it comes back with a full report of your systems and all the various software you have installed. Very handy when you are moving over to a new computer and need to make sure you’ve installed all the software you own and need.

Virtual Office Collaboration/File Sharing/Project Management

• HyperOffice. NONE of those other services out there offers the real time, actual document editing/saving/sharing that HyperOffice’s Hyperdrive does. Not Basecamp, not Central Desktop, none. The only thing you can do with those as far as docs go is download them to your computer, open and edit, then reupload them back to the service. That’s just SUPER ridiculously slow if you are dealing with lots of document work throughout the day. With HyperOffice, I can open documents, edit, then save them–all as if they were right there on my computer. No tedious, annoying uploading or downloading involved whatsoever. Badda bing, badda boom.
• Airset (free with a very nominal monthly fee if you need more space). You could use this for everything, but I only use this with my clients expressly for the calendar feature because you can set a series of reminders that will send automatic emails. I sure wish HyperOffice would do this, but it doesn’t unfortunately. Also, I haven’t been able to figure out a way to create subgroups in Airset like you can in HyperOffice. Yet another reason why HyperOffice offers the superior solution.
• DropBox (free). AWESOME program with far too many uses and capabilities to list. Just get it. Seriously.

Electronic Signatures

• Echosign (free). I only just signed up for an account and haven’t quite learned how to use it yet, but it looks like a real nifty tool to have just in case.

Bookkeeping

• Quickbooks Pro. Hands down, this is one of the best investments you can make in your business. This does everything and keeps it all in one, integrated place: bookkeeping, billing, customer management, tracking, reporting… the list goes on. I honestly don’t understand how anyone can use any of those other piecemeal services out there for billing and stuff like that. And yes, I specifically mean the “Pro” version. That will give you the highest and most functionality and reporting capabilities.

Time Tracking

• Various Time Tracking Tools (free). I don’t bill by time anymore whatsoever, but sometimes it is useful to know how much time you did actually spend on something, if only for business analysis. This is a list of all kinds of free time tracking tools you can use. Heck, even Outlook has a little timer in it.

Payment Processing

• PayPal. I have not needed a formal merchant account in nearly 14 years of business. PayPal does everything I need. Some folks say that a true merchant account is cheaper, but the difference amounts to pennies–something I’m not concerned about in the least. To me, versatility and ease of use is the name of the game and PayPal has it in spades, on top of being trusted the world over. And really, any fees you pay are so nominal as to be laughable. They’re a business expense write-off anyway so what are all those whiners out there complaining about?
• e-Junkie. I adore e-Junkie. If you sell any kind of info products, this is seriously one of the best tools you can use. It will even provide you with a built-in affiliate program.

PDF Tools

• PDF Converter Pro. This program is so easy to use with lots of robust functionality. One thing it doesn’t have is the ability to create editable form fields (although, to be fair, I don’t know about the latest version; I’m still on a version or two older). Also, another huge drawback is their customer service. There were a lot of glitches when I first installed this program, and I had to be on the phone with them several times which was not fun–foreign customer service people where English was not their first language, long wait times, etc. Now they charge for support! It’s like, hey, if I spend a bunch of money on your software and I need help installing it because YOU made it with glitches, I’m not gonna feel very kindly toward you for charging me for support when you are the one who forced me to call in the first place. You know what I mean? Such a horrible, customer-hating policy. If you are spending that much time dealing with support calls, it might be time to take a look at the software that is causing them. Eh? Anyway, this program serves my purposes for now, but when it’s time to upgrade (which is soon), I’m going to be purchasing Nitro PDF instead.
• Adobe Acrobat. I have this only because it came as part of a suite of software, but I really never use it. I prefer my PDF Converter Pro.
• Adobe Acrobat Reader (free). It’s free, but I prefer my Foxit Reader much better (see below).
• Foxit Reader (free). Quick, easy and free PDF reader. I have it set as my default viewer and like it very much.

Audio Tools

• Audacity (free). Fantastic program for editing audio tracks. For example, if you work with teleseminar recordings, you can edit out ums and ahs, you can add intro music and sound effects, you can add additional track overlays… there’s just no end to what this program can do!
• Switch (free). Nifty little program for converting audio files to different audio formats. I use this all the time for quickly converting various audios to .mp3 format.

Transcription

• Express Scribe (free). Another fantastically robust program that I can’t believe is offered for free.

Web Work & Design

• Dreamweaver. I use this for soooo many things both for my own business and in the design work I do for clients. I not only design websites with it, it also helps in writing and reading code. I also work up my email and autoresponder templates with this program.
• CoreFTP Lite (free). I use this to upload files and pages up to the various websites I work with or design, both mine and my clients’. There are lots of different ways to do that and lots of different programs out there that do it, both paid and free, but I’ve used this one for years and never really had a need to explore others. I’m used to it, it does the job, has an intuitive interface, and it’s just been very trusty.
• EditPad Lite (free). This is a handy little program for stripping hidden code from text, working with plain text, and also when working with basic HTML and other coding.

Design/Creative Work

• Photoshop. This is professional design standard software (now owned by Adobe and that comes in their Creative Suite packages) that I use to work with photos and graphics.
• Illustrator. This is professional design standard software (now owned by Adobe and is another part of their Creative Suite packages) that I use to design and work with vector-based graphics.
• Pixie Color Picker (free). This is a way nifty tool that allows you to “pick” colors from samples using a virtual eyedropper. Seriously, I could not live without this tool.
• The Font Thing. This is a tool that allows me to easily scroll through all the fonts on my computer system. I use it when I’m doing design work and trying to find the best font for a particular project.
• SnagIt. This is a fantastic screen capture program that does oh-so-much-more. Yet another must-have!
• Screenhunter 5.1 (free). This is a little freebie screenhunter that does a great job for grabbing those quick and easy screenshots.

Video Editing

• Camtasia. Once I get some other things out of the way, I will be doing more video work. In the meantime, I purchased Camtasia and have gotten pretty fluent with it. It is so much easier and intuitive to use than some of the other professional video editing software out there, and less costly as well. LOVE this program!

Video Streaming

• YouTube (free). I opened accounts with many of the different services out there, but in the end am now sticking with YouTube (at least for videos that are under 10 minutes, which is the YouTube limit). It’s established, widely used and is great for SEO. I also like how you can customize the theme and display of your channel.
• Viddler (free for personal use). One of the features that I really liked is that you have more flexible customizing options for players and you can embed your logo with an active link on your videos. They have a free account for personal use, but they recently started charging for commercial use. I really do like Viddler and if I was doing more video right now, I would definitely consider paying for the service. But since I’m not, it’s a little too costly to justify given the little I use it.
• Vimeo (free). I have an account with this one and it’s decent. It doesn’t offer as much customization as Viddler as far as the player goes, but for the amount that I do video, the price is right–free.
• Ustream (free). I don’t actually have an account (yet), but if I was wanting to do some live video shows, this would be the service I would use.

Audio Streaming

• Audio Acrobat. A wonderfully versatile program that will stream both audio and video. Not only is it great for your own business and marketing purposes, it’s very widely used so knowing how it works will be a benefit to your clients as well.

All-In-One List Management/Email Distribution/Autoresponder Service

• Aweber. Honestly, why people bother with free services that don’t scale as their business grows is beyond me. All the time and work they invested in growing their list puts them back in square one when they have to move to a paid service–which they should have just started with in the first place. Don’t be penny-wise and pound foolish! When it comes to purchasing software and services, think with a mind towards what is going to facilitate the growth and success of your business. That’s why this program is an absolute MUST-HAVE as it will help you grow, nurture and keep in touch with your audience and keep those prospective client pipelines moving and shaking.

I have a client who signed a three month retainer which will end next month. The client is a publicist in Los Angeles. Working with this individual has become a job. I work 50 hours a week. The reason being that I have become an assistant vs. admin support. I like this person and it is clear that she needs help. My challenge is how to steer this so that she’s working within my business model and not the other way around. I’m not making nearly what I should be. I took less to build the relationship. Is there a way to bring this around or should I just thank her for the wonderful experience (while frustrating at times, I’ve learned a lot) and move on? –TK

This is SUCH a great question. It’s a common pitfall for so many Virtual Assistants. I’m sorry you are going through this, but on the positive side of things, as you recognize, it’s a really valuable learning experience.

There are so many business concepts this touches on so I’m just going to enumerate things to consider. You may have figured some of this out having gone through this now so a lot of it may  just be a validation that you’re getting on the right track from this point forward.

1. Never bargain with your fees. You never want to make bargains with the very thing that earns your living. All you do then is teach clients to devalue the work and the relationship, and give them the idea that everything is up for negotiation.

And really, it amounts to bribery. It’s saying, “I am not worth what I’m charging so I need to bribe you with discounts and freebies in order to get you to work with me.”

That’s a horrible, powerless way to start a relationship and attracts all the worst kinds of clients. I know we see people doing this a lot, but just because we see it doesn’t mean it’s working.   There’s a whole lotta people out there who are NOT making any money and whose businesses are going nowhere due to this thinking.

If what you have to offer is valuable and worthwhile, it’s worth charging fully for right from the get-go. There will be more mutual respect, and your business and relationships will grow more successfully and healthily from there. There are other–better–ways to start new client relationships and make it easier for them to say yes that don’t entail discounting or otherwise bargaining with your fees.

2. Never take on anchor clients. An anchor client is one who ends up monopolizing all your time and energy. They are called “anchor” clients because they weigh your business down and keep it from going (and growing) anywhere.

It doesn’t help that we’ve got Virtual Assistant training programs telling folks that these kinds of clients who hire them for 40, 60 or more hours a month are the bee’s knees. If you are someone who is only doing this work as a side income and more of a hobby, then that’s fine and dandy. But it absolutely does not work at all for those who are trying to build a real business that earns a real, full-time income (and more!) that they could actually live on.

That’s because working with those kind of clients doesn’t leave you the room or energy to work with others and grow your business. I can’t tell you how many VAs I personally know who are struggling because they are working like full-time assistants to their clients. They aren’t making enough money to live on and they barely have any time to think or do anything else.  And they’re definitely not living the freedom and choice-filled life of the self-employed they dreamed of when they first started. If you have read my blog for long, you’ll frequently see me referring to this as “operating and working with clients in ways that don’t give your business room to grow.”

A good rule of thumb is that no one client should make up more than 20% of your business. If you are working with one client for 40-50 hours a week, you’ve got yourself an anchor client who is probably making up 75% or more of your entire business.

You aren’t making the kind of money you want and need, yet you haven’t given yourself room to work with anyone else.

And what happens if that client says bye-bye? There goes almost (if not all) of your entire income. On top of things, you’ve been so busy working with this one client, you haven’t had any time to market your business to keep those prospective client pipelines open. Not that you had any room to take on new clients anyway.

Quite the dilemma and not a good place to be, right? So this is what you do…

3. Recognize when what a client really needs is an employee. As you’ve stated, this has become a job and it’s time to let this client know that what she really needs is an employee, one who can be solely dedicated to that level of workload.

You want to always remember (and tell this to clients, too) that a Virtual Assistant/Administrative Consultant is an alternative, not a replacement for employees. There is naturally going to be a significant difference in the way and when you work together as well as what work you take on. There are going to be many clients and many workloads this simply isn’t a fit for–and isn’t supposed to be.

There are a lot of people out there who just aren’t going to understand this (sometimes folks have to be a little further along in their business for certain things to make sense), but I gotta say it anyway–when a client starts needing you for more than 20-30 hours a month, what they really need is an employee.

Because once you start getting into those kind of hours for one client, the work starts to require more constant, daily monitoring and it overwhelms everything else. And that is a condition that will not only lead to burn-out and keep you chained to your desk every day, more importantly it will limit your ability to work with others and deprive you of the “space” you need to move around easily in the work. Daily on-demand work causes crowding which also leads to poor performance and inconsistent delivery.

The more profitable, sustainable model that also allows you to keep the higher value, one-on-one, true partnering relationship is to work with several retained clients whose individual workloads don’t exceed 20-30 hours a month. It’s a much easier business to manage, it gives you space and leaves room to grow and offer additional services and project work. In that model (and as long as you are also charging properly), it only takes a handful of clients to really do well financially, and because you have “space,” you can supplement that line of business in many different ways.

4. YOU need to set the parameters and the definitions. This is where I’m always saying that being an administrative expert and being an assistant are not one and the same thing. And if you’re a business owner, you aren’t anyone’s assistant.

What I want those two statements to do is help people get conscious and intentionally define their role. You can be an administrative expert without having to be anyone’s assistant. Problem is most of the information you get in the VA industry today is telling people that they have to be assistants. And that’s not a new paradigm whatsoever. It’s just a different name for the same thing–employee.

When you get clear about that, you understand that your value isn’t in being and doing everything for that client. You CAN focus on just the administrative support in your clients’ businesses without being an assistant and instead being an Administrative Expert. If you want to also be an assistant, that’s up to you, but like I say, they aren’t one and the same thing. You get to choose, but understand this–your value isn’t dependent upon also being an assistant. It’s all in how YOU define the work and your role in your business.

Likewise,  you need to define what administrative support is. And the reason this is important is because so many VAs are giving everything away under the administrative support umbrella. So you want to define what kind of work is administrative support and what work logically falls into other categories of business. This will not only help you define parameters, making things more manageable and leaving you room to grow with that client as well as others, but you also create additional revenue sources by charging separately for those things that don’t fall under the administrative support umbrella.

Obviously, I can’t say one way or the other if this is a salvageable relationship. I can tell you, though, that once you’ve spoiled a client and allowed them to have expectations that you can’t sustain and that keep your business from growing, it’s often really difficult to wean them off those things. As you grow and your standards change and improve, always expect that you may lose some clients. It’s just natural that you will outgrow some.

If it’s a relationship you’d like to try to keep, all you can do is be open, honest and direct about the changes that must take place in your business in order for it to grow, and let the client know that you hope she will come with you. Don’t be invested in the outcome beyond that. If she chooses to come with you and accept the adjustments you need to make, great! You can now move forward on more mutually beneficial footing. If not, it just leaves you room for more ideal clients to come into your business.

I am just starting my Virtual Assistant business.  I am networking and setting things up, but I have a question (hope it does not sound silly)… If you could, please list and/or explain some of the duties/work you in real terms. I hear all these Virtual Assistants talk about “the work,” but I want to know the details. What kinds of things do people hire you to do? –AC

Not a silly question at all. Although I can’t say it’s the easiest to answer, LOL.

That’s because the administrative support that one VA provides to her clients can be completely different from what another VA provides.

It’s impossible to create any kind of comprehensive list because the work we do is so much more than that. More importantly, there’s no way to do that because no two clients, businesses and professions are the same. There might be some general similarities and overlap, but overall “the work” all depends on the clients, the industry they are in, the work they do and what their goals, objectives and challenges are.

So like me, for instance, I work with attorneys and business consultants. HUGE amounts of document work involved in both. I also have a lot of contact with their clients in various capacities, such as interviewing, doing intakes, making calls… I also have to interact with the courts, JAs and use the various filing systems. That’s just the teeniest tip of the iceberg.

What I do for my clients, given the professions they are in, is VERY different from the work VAs who, for example, work with Internet marketers provide. Those two markets do completely different things, have completely different interests and motivations, and the work, therefore, is vastly different.

Instead of trying to identify “the work” in only the most general sense, I would instead have you look at things from a different perspective.

1. You can’t be in business to do everything. So YOU have to define what you are in business to do. How I look at things is that administrative support is a skill, expertise and specialty all its own. As a business owner, I am not anyone’s assistant, personal valet or gopher. I am in business to provide administrative support to clients who need that expertise in their business.

2. Once you know what you are in business to do, you will have a better idea and focus about the kind of work you provide for clients. But that’s not the end of the story…

3. You also want to define what administrative support means to you. The best way I have to explain administrative support is that it is the collection of ongoing tasks, functions and roles that keep a business organized, running smoothly and moving forward. Where a lot of people get confused (including a whole lot of VAs themselves) is thinking that administrative work is simply paperwork.

And administrative support isn’t just about administration (the back-end running of the business). Administration is only one area of a business where administrative support is provided. Administrative support encompasses work in ALL four areas of a business–administration, business development, marketing and networking, and working with clients.

Take a look at the quick video below and see if that doesn’t help you understand a bit better.

4. You also want to define a target market. For the same reason that you can’t be in business to do anything and everything, it is also impossible to try to work with anyone and everyone and create any kind of unique, meaningful, resonate and compelling message at the same time.

As Seth Godin says, “You can be a wandering generality or a meaningful specific.” Once you know who it is you are intending to work with, that right there is going to hugely allow you to identify and define “the work” you want to do with and for clients and separate it from different categories of project work you may want to charge separately for.

(And by the way, when you work with a very specific target market, the work and running your business becomes INFINITELY easier.)

5. Beyond all that, EVERYTHING depends on the consultation. Everything. You can’t begin to know how to support someone or what work is involved until you have spoken at length to the client to learn more about them, their business, their values, goals and the challenges they face.

If you want to get REALLY good at doing consultations and know EXACTLY how to proceed with them (what to talk about when, questions to ask, how to ask, what to look for, etc.), then I highly recommend you get my Client Consultation Process, “Breaking the Ice (GDE-03).” It covers everything from before, during and how to follow-up afterward.

How do you keep your files and information synced between computers and how do you protect your clients’ work or database getting lost in case of some kind of disaster (lost or stolen laptop, fire, computer meltdown, etc.)? –AL

Great question! This actually falls into two topics: systems and backup.

BACKUP

It’s always a good idea to have a backup system in place. There are a couple of ways you can go, which all boil down to personal choice: external hard drive or an online backup service. Personally, I use an external hard drive and do my own backups once a week or more. I just don’t like the idea of having all my personal business information on an outside party’s systems. I think any time you trust an outside third-party with potentially sensitive, confidential client/business info, you increase your liability if their systems become exploited or fail for some reason.

But like I say, it’s a personal choice. If you want to go the online service route, I’ve heard good things about Mozy and it is a lot easier to do daily backups when someone else is doing them automatically. My only caution would be to make sure you know and understand what is being backed up. Are they backing up your entire system (including system files and programs) or just certain kinds of regular documents and files? How easy it is to find and restore files should you need to do so? What are the storage limitations? Are you notified of fee increases for overages in advance? What is the customer service like? Can you quickly and easily get help when you need it or do they abdicate that to forums (where you could wait days for someone to respond)?

As far as backing up clients’ data for them (if that’s what you’re asking), that’s a bad idea. You’re not a storage facility. Don’t take on responsibilities and liabilities that aren’t yours to bear. Clients need to be responsible for their own businesses; it’s not your job to manage their businesses. You have your own to deal with. Their databases should be on their own computers and systems, not yours.

SYSTEMS

As far as keeping your files synced between computers, my best advice is to avoid duplication at all costs. Otherwise, you only invite confusion, mistakes, rework and inefficiency (which in itself creates more work). A business that does not run well also does not earn well. What I recommend is that you get an online virtual office and a remote access service.

I work from several different computers and laptops, but I don’t keep work in all these various places. All my files, my entire business, sits on my main office desktop computer. When I need to access files, I simply login remotely to my home office computer using LogMeIn. I could not live without this service. I can be sitting in our condo in Germany and working at my home computer in the U.S. as if I was sitting right there. No more dinking around and keeping track of portable/thumb drives that are easily lost or broken. It is simply brilliant!

My other best friend is my virtual office collaboration service, HyperOffice. This is a web-based service that allows you to organize clients, share calendars, project managements, documents, etc. and keep everything in a single online location that you both have access to. There is no moving files around or backing up between computers necessary whatsoever. This will not only simplify your work life immensely, it’s a convenience and benefit for clients working with you.

A new best friend that I can’t say enough good things about is DropBox. For those occasions when you do need to quickly and simply move, transfer or sync files between computers or with clients, DropBox is your go-to tool. It’s crazy how versatile it is and I’m constantly finding new uses for it. Super, super easy to install and use.

With these three tools, things are kept organized and not spread out all over the place and I never have to waste time and energy syncing stuff up. It’s a non-issue!

Thank you so much for all of your offerings through the Virtual Assistant Business Store! Getting my company planned and put together has been much easier thanks to you than it might have been.  I just need some clarification:

1. How exactly do referrals work?  I am giving a two-hour free referral bonus to any client that refers another paying client.  What do you think of that idea?
2. What marketing tools have you found the most effective?  I am on unemployment which is not enough to make ends meet, and I have had to get things for my business by raiding my grocery money (maxed out credit).  I am trying to get a micro-business loan, but have not done so yet.  Are online directories and search engines the way to go?
3. How did you find your industries small prospects for sales calls?  Do we have to worry about “Do Not Call” lists if someone uses one phone number for everything?  How much “cold calling” did you do to get started?
4. About your website screening intake form:  I could not find your business website, only the Gritty VA, nor could I find anything in the store about an intake form.  Is there another resource or should I just pull together my own and tweak it through experience?
5. If a client asks for a particularly dicey project that I am not sure I can handle, how do I address that without looking incompetent, undersupplied technologically, or setting myself up to fail?

I apologize if you have already addressed these issues.  Thanks for your help! –AJ

Whew! I’ll do my best to answer these, keeping ‘em short and sweet…

1. I’ve written a couple things on the topic of referral recently:  “Dear Gritty Virtual Assistant: How do I Advertise for Referral Partners?” and “10 Tips for Harnessing the Power of Referrals.” Those should cover your questions on this topic (particularly the part about paying for referrals–not the best thing to do and unnecessary).

2. It’s helpful to be in directories, if only for the added SEO, but in our industry, hands down the most effective marketing strategy is networking. Not ads. Not cold calling. Not direct mail. The great thing is that networking doesn’t cost anything but your time. And the reason it’s so effective is because people look to work with those they have established some kind of relationship with, that they feel some kind of rapport with and have come to know, like and trust because of it. Every opportunity you glean that let’s a group of people get to know, like and trust you is going to make it that much easier for you to attract clients.

3. How did I find my industry’s small prospects for sales calls? I didn’t look. I never did cold calling. People don’t like to be sold to; it’s completely the wrong strategy. Professional services are a bigger ticket item and require more relationship building that that. And I can just about guarantee you, you don’t have the kind of money and energy to ever make cold calling a worthwhile ROI. Even if you get one project, it isn’t going to come close to covering all the time, energy and effort you put into getting it. And think about it–you really think you can keep putting in that kind of work just to get one or two measly nickel-and-dime projects? There are MUCH quicker, more effective means to getting clients and that’s by deciding on a target market to focus on and then getting involved with that group in any ways you can (online forums, business groups, events, etc.). The more you interact, the more they get to know, like and trust you.

4.  My own site is undergoing an overhaul (although to be honest, I haven’t had time to deal with it lately), but I think you are referring to the online form to request a consultation. If that’s the case, I’m not sure specifically what your question is on this, but I use this form on my site to help screen and pre-qualify prospects. I can’t work with everyone and as a Administrative Support Consultant, I’m not looking to work with anyone and everyone.  I want to make sure they understand what I’m in business to help people with, that they belong to the industry/profession I focus on and whether they are ready to find a support partner (or only looking) and can afford it. These are the kind of things that inform me as to what my next action with them will be. That is, if someone is only “browsing,” you don’t want to waste time and effort on a consultation. It’s the wrong approach at the wrong time and you want to reserve those things only for those who are ready. Instead, you’d want to refer folks in that category to a white paper or video perhaps and then ask them to contact you again when they’re more seriously interested in working together. You could also invite them to subscribe to your ezine or mailing list so that you can keep them in your pipeline. The fact is that most clients are not ready to work with us immediately. It’s all a process. But you can read more about the consult form and pre-qualifying clients here: “One Way to Sort the Ideal from the Unideal.” Oh, and I would HIGHLY recommend you get my Client Consultation Process as it walks you through ALL of these things and gives you a system from start to finish for targeting clients, prequalifying them, going through the consultation and all the kinds of questions to ask and how to follow up afterward.

5. Well, first you have to distinguish what kind of business you are in. Are you in the secretarial business where you’re simply doing one-off, transactional, piecemeal project work? Or are you in the business of administrative support? Because the two are entirely different things and once you answer that question, it will help answer subsequent questions about what kind of client needs that work, what work is entailed and so forth. When you know what you do and who you do it for, this kind of thing isn’t as much of an issue. However, let’s say you are in the administrative support business and the client asks if you do X. Honesty is always best so tell them if that isn’t something you know how to do. However, you can always let them know (that is, if you are even interested) that you are willing to learn how to do it. Otherwise, you might look at the thing and realize, you know, this really doesn’t fall under administrative support at all and they really need to be working with an “X” expert. In that case, you might offer to help them locate that kind of expert who is in business specifically to do that thing. Or, you might have a separate division in your practice that does “X” in which case you could charge them separately for that project work. You have to always remember, Virtual Assistance is not a catchall term for “anything and everything.” Just because a client asks doesn’t mean anything. YOU have to decide what administrative support consists of in your business and what it doesn’t. When you have that clear idea yourself, you shouldn’t have any qualms about letting clients know when something doesn’t fall under that umbrella, that you don’t do it because of that, or that you are willing to learn (and maybe charge separately) for it. Always be honest about what’s what; you’re not going to look bad at all about not doing or knowing how to do something if that’s not the business you’re in in the first place. I mean, if you’re a plumber and someone asks you to fix their car, they’re the ones not making sense and you would naturally explain to them that you are a plumber, not a mechanic.