What Aussie Virtual Assistants Pay Themselves
Last week I shared a blog post with you all about setting our pricing and how it can be super hard to do when not many people talk about money.
In the last year or so I’ve gotten to know two people who are really big on talking about money and I think it’s fantastic.
One of those is Courtney Rogers who helps people work out pricing and value and reduces the stigma around talking about pricing and not being the cheapest available.
Courtney talks money all day every day and is so open and easy going about it – make sure you follow her.
The other person is Tracy Brockhoff of Nourish Your Numbers. Tracy is a certified Profit First Professional and is passionate about helping online service businesses achieve their business and personal wealth goals. Recently she conducted a survey with Virtual Assistants about their financials and the data was really interesting – but also worrying.
Tracy has shared some of her stats with me so I can help spread the word about some of the issues being faced within our industry.
The reported income from those who completed the survey were as follows:
75% $0 – $100,000
11% $100,000 – $200,000
7% $200,000 – $300,000
7% above $300,000
Of those surveyed, 79% reported not having staff and the same amount reported not utilising contractors in their business.
This was a bit of a red flag for me because I’m a passionate advocate of ‘practicing what you preach’ – we know businesses achieve more success when they tap into the skills of other business owners. We can’t do it all ourselves and expect things to be profitable and streamlined. We need to step out of the fear and do what we insist our clients do – let others in.
When it came to getting outside advice and mentoring, the results showed 67% had used a mentor or coach, 29% had not and 4% didn’t want to. Again, we can’t do this alone and we learn so much from those who have ‘been there and done that’.
Interestingly, those surveyed reported that their profit looked like
54% Profitable with good cash flow
18% Profitable but cash flow a problem
22% Roughly breaking even
7% running at a loss
Running at a loss in the first year or so can be expected and I don’t know if there was a correlation between length of time in business and the outcome of those questions. I’m going to assume that that’s why some are running at a loss.
However, one of the most important questions was this – Are you happy with what you pay yourself?
35% were happy with what they paid themselves
65% either didn’t pay themselves at all or wanted to be paid more
65 percent! That’s massive. And that’s why exploring cash management systems like Profit First could be really useful for so many. I’m encouraging Tracy to run some Profit First sessions for the members of Virtually Yours so stay tuned about that!
In response to some of these figures, Tracy Brockhoff stated ‘I’m a big believer that your business should be able to sustain your personal lifestyle. If you are putting personal funds into the business to keep afloat there is an issue and that hole needs to be plugged. Start by knowing what your personal expenses are, what you need to take out of the business at a minimum to support the lifestyle you want.’
These figures are all really interesting. For there to be so many who are not paying themselves anything, or not enough, totally supports the idea that VAs are not charging enough.
I’ve mentioned previously that when I started in 2004 (17 years ago!) my starting rate was $27 per hour and I quickly increased it to $38 per hour. 17 years ago!
Yet we are stuck with a massive number of VAs still charging that sort of rate. Our expenses are so much higher now than when I started and our rates need to factor that in. Yes we need to consider how to keep our business running AND our lives happy and healthy. Where we live is a factor.
Offshore don’t have the same expenses and they will charge less. Yep. So what. You need to accept that if you offer your services in the same model as offshore you won’t survive because you can’t compete with their prices. You have to step up and you have to be able to support your clients with much more than just ‘doing the doing’.
Know what makes you more valuable. Know what clients need that is above the ‘doing’. Work out your true calculations and stop running a charity that doesn’t serve anyone.
Another insight Tracy shared was ‘As a business owner you can’t afford to be offering your services for what you would get as an employee (or less in some cases). Think about developing packages or certain service prices – Time for money doesn’t make sense. Why would your expertise at doing something more quickly (which means you are probably better at it) mean that you get paid less?’
Thanks so much to Tracy for sharing her figures with me – I’m so looking forward to chatting with her further in some webinar sessions about the Profit First cash management system. Implementing Profit First gives you complete clarity and control over your finances. You can see immediately with a glance at your bank accounts whether you are profitable or not and pay yourself the wage you deserve. You can check out the first 2 chapters of the fabulous Profit First book for free here.
Plus don’t forget to follow Courtney Rogers to learn more about pricing – she even does consultations to help you out if you’re at a bit of a loss.
To work out what you can offer above and beyond the ‘doing’ make sure you check out the Virtually Yours Stellar Business Course. From the Offering Module or the full packaged course, you’ll learn how to step up and gain the confidence you need to ensure you are one of the 35% who are happy with what they pay themselves.