Episode 335: How to Make Sure Your Virtual Assistant Business is Profitable

Full Episode Transcription:

Arianna Vernier: I received a question recently asking how You This person can actually run a profitable virtual assistant business. So I wanted to break that down for you guys in today’s episode. There are a few core components that you need in order to make sure that your virtual assistant business is profitable. Now, what do I mean when I say profitable? What I mean is that you are generating enough revenue every single month to pay yourself the amount of money that you need to make in order 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. So when you’re deciding how much to charge for your virtual assistant services, you have to keep those four components in mind. This number is going to be different for each and every one of you. And it’s going to be really unique to you and how you run your business. So we want our virtual assistant businesses to be profitable, but we also need it to be sustainable.

Sustainable means that you are not overworking. You’re not burnout. 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 weeks for other things other than your virtual assistant clients. Okay? So profitability and sustainability, they really go hand in hand. You cannot have one without the other. So while it is possible to be financially profitable. It’s not sustainable over the longterm 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. And then to have the level of effort to manage all of those clients, the consultations that you would need to book that many clients, not to mention doing the actual work. So the first thing that you want to make sure to do in order to make sure you have a profitable virtual assistant business is making sure you’re pricing yourself well and not undercharging. Most virtual assistants that I see are undercharging at least 50 percent less than what they should be. Now, if I asked you, would you offer to pay 50 percent of the project fee for your client?

You’d be like, no, Ariana, of course not. But that’s what you’re doing when you’re undercharging. So you cannot have profitability without sustainability and you can’t have sustainability Without profitability, and you can’t have either of those if you are undercharging. So if your business is profitable on paper, but you’re working constantly and feeling exhausted and overwhelmed and resentful, it is not sustainable. Secondly, you need to know the amount you need to make in order to be profitable. So these numbers, again, they’re unique to you. They should be also realistic. I know so many of you come to me and you say, I want to make 10, 000 a month and make multiple six figures. And while it’s possible to do that, You have to start where you’re at today. So some key questions to ask yourself. If you have a partner or someone that you share household expenses with, what is your expected contribution to those expenses? How much money does it take for you to pay for the life that you’re living today? How much are you investing every single month in the tools that you need to run your business?

Things like web hosting, client management systems, all your tools, training, subscriptions, all of those things. Also, how much are you investing in courses, training, mentorship, or are you just burning all of your time on YouTube university? So let me kind of break down an example of this for you. So if you want to pay yourself, 3, 500 a month, and you want to spend 1, 000 a month on tools, training, and mentorship. That is a total of 4, 500 you would need to make every month. But 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 multiply that amount by 20% .So if my total income was 4, 500, but I spent 1, 000 on business tools and all the softwares and whatever. My income was actually 3, 500. So 20 percent of 3, 500 is 700. Remember, I’m not an accountant, I’m not a CPA, I’m not a tax professional, I’m just telling you what I do. So this is how it works. So now we know that we would want to make at least 5, 200 every month if we want to be able to pay ourselves 3, 500, invest 1, 000 in tools, training, and mentorship, and set aside 700 a month for taxes. So this is a really basic formula that I use every single month to figure out my target revenue goal. You gotta know these numbers and then once you know them, you have an understanding of how much money you need to make in order to do the life that you want. That you want to do again. This ties into pricing.

So if you’re only charging 500 a month per client, you would need 11 clients in order to make your business profitable. And that is honestly a lot of clients to juggle at once. So what’s the answer? The answer is raising your prices and working with less clients. The real true 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. So if you charge 2, 000 per client a month, then you would only need three clients and you would already be exceeding your goal of 5, So, to recap, in order to run a profitable virtual assistant business, you have to make sure that you’re charging higher prices for clients so you can earn enough revenue every month to pay yourself, invest in tools, training and mentorship, pay your taxes, and have that leftover for savings and bonuses. Now, if you want to 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, it has to be sustainable. Again, profitability and sustainability. Go hand in hand like yes, you can have an amazing income month But if you just work yourself to the bone and you don’t think you can do that again the following month It is not sustainable. So make sure you keep that in mind Alright, if you need help with like figuring out your pricing even figuring out what services you want to offer or Where to find these amazing clients that you can charge a high amount to, I invite you to my free workshop at ariannavernier.com/free-workshop. You can also find that link in the show notes, but I break this down even further for you in there. So go get registered for that. Can’t wait to see you there. Thank you so much for tuning in to this episode and we will see you next time.