Episode 150: How to Run a Profitable Virtual Assistant Business

Full Episode Transcription:

(00:07):
Hey, y’all. Welcome back to another episode of Quick Tip Thursday on the Ditch the Classroom Podcast. Today’s question is, how do I run a profitable virtual assistant business? Now, there are a few core components you need in order to have a profitable VA business, and I’m gonna cover that, but first I wanna break down what does it mean when I say profitable. What I mean is that you’re generating enough revenue or income every single month to pay yourself the amount of money that you need to make to do life. Whatever amount of money that is for you personally. To make investments into your business, make enough money to pay taxes, and to have enough money left over to set aside for emergencies, ebbs and flows in your income, or just to give yourself a bonus. When you’re deciding how much to charge for your virtual assistant services, you have to keep those things in mind.

(02:16):
This income number will be different for each and every one of you, and those numbers are gonna be very unique to you and how you run your business. Yes, we want our virtual assistant businesses to be profitable, but we also need it to be sustainable. And sustainable means that you are not overworking, you’re not burnt out, you’re not emotionally, mentally, and physically drained. You have time for yourself, for your friends, your family. You have space in your days and your weeks for other things other than your virtual assistant clients, okay? Profitability and sustainability go hand and hand. You cannot have one without the other. Now, while it’s possible to be financially profitable, it is not sustainable over the long term to operate your business in a way that causes you to have to constantly book new low paying clients in order to generate enough revenue, because the level of effort to manage all of those clients, the volume of marketing, and then the consultations or discovery calls that you’ll need to book in order to actually land those clients, not to mention doing the actual work.

(03:35):
It’s too much and it’s just not going to be sustainable. So the first thing that you need to do in order to make sure you have a profitable virtual assistant business is to make sure you’re pricing yourself well and not undercharging. Now, most virtual assistants that I see are undercharging by at least 50% less than what they could be charging. If I asked you, would you offer to pay 50% of that project fee for your client, you’d be like, “no, Arianna, of course not.” But that’s what you’re doing when you’re undercharging. So you can’t have profitability without sustainability. You can’t have sustainability without profitability. And you can’t have either of those if you are undercharging. So even if your business is profitable on paper, but you’re working constantly and feeling exhausted and overwhelmed and resentful, it’s not gonna be sustainable.

(04:34):
Secondly, you need to know the amount you need to make in order to be profitable. Those numbers are unique to you, and they should also be realistic. I know so many of you come to me and you say, I wanna make $10,000 a month and make multiple six figures a year. It’s totally possible to do that, but you have to start with where you are today. Set a goal that is attainable and doesn’t seem way in outer space. So some key questions to ask yourself are, if you have a partner or someone with whom you share your household expenses, what are you expected to contribute to those expenses? How much money does it take for you to pay for today’s life and lifestyle? How much are you gonna be investing every single month in the tools that you need to run your business? Things like web hosting, your client management systems, your tools, your trainings, your subscriptions. How much will you be investing in courses and training and mentorship to continue growing your skills?

(05:38):
Or are you just gonna burn all of your time on YouTube University? That’s kind of an issue too, but that’s a topic for a different episode. So let me give you an example. If you wanna pay yourself $3,500 a month, 3,500, and you wanna spend a thousand a month on tools and training and mentorship, that’s a total of 4,500. Then you also need to factor in taxes. Now, I’m not a CPA, so please refer to your CPA for their suggestions, but I can tell you what I do. I take the total income I make from my clients, subtract my business expenses, and then I multiply that in that amount by 20%. So if my total income was 4,500, but I spent a thousand on business tools, my income was actually 3,500. So 20% of 3,500 is 700. Are you following me?

(06:41):
Lemme say that again. 20% of 3,500 is $700. Now, again, remember, I’m not an accountant. I’m not a CPA, not a tax professional just telling you what I did, and this is how it’s worked for me. So now we know that we would wanna make at least $5,200 every month to pay ourselves 3,500, invest a thousand dollars in tools, training and mentorship, and set aside $700 a month for taxes. So this is a very basic formula that I use every single month to figure out my target income goal. You have to know those numbers because then you have an understanding of how much money you wanna make every month in order to just do life, and then you just do the math. So this is where pricing comes in. Again, if you’re only charging $500 a month per client and you would need 11 clients in order to make your business profitable, that’s a lot of clients to juggle at once.

(07:44):
That’s not sustainable. So what’s the answer? The answer is raising your prices and working with less clients. The big secret to a profitable sustainable business is quality over quantity. You want to find a few high quality, high paying clients rather than a lot of smaller paying clients. If you charge $2,000 a client, then you would only need three clients and you would already be exceeding your goal of 5,200. So to recap, in order to run a profitable virtual system business, you have to charge higher prices for your clients so that you can earn enough money every month to pay yourself, invest in tools, training and mentorship, pay taxes, and have that leftover for savings and bonuses. So if you wanna have a profitable virtual assistant business where you’re not working 24/7, and you actually want to enjoy the freedom and the money you’ve created, you have to have sustainable pricing.

(08:53):
All right, guys, I hope you found, found this episode helpful. I wanna invite you again to our free workshop that’s coming up here in one week called The Number One Way to Leave Teaching and Replace Your Income From Home in Six Months orLless. I’m so excited to teach you guys the five Ps that you need in your virtual assistant business, and again, it’s gonna be building even more on this episode, so I can’t wait to bring this to y’all. Check it out at ariannavernier.com/free-workshop. You can also find that link in the show notes. Get registered. There will be a replay available, but only if you register. So make sure to do that. And if you have a question that you would like for me to answer here on the Quick Tip Thursday episodes, go ahead and come to our free Facebook community that’s at facebook.com/groups/ditchtheclassroom.

(09:47):
Scroll to the Quick Tip Thursday post, leave your comment with your question, and I would be more than happy to answer it for you. All right, I love you so much. Can’t wait to see y’all at the workshop a week from today, and we will see you next time.