Inspired by this article: http://www.vapromag.co.uk/5-reasons-why-its-ok-to-keep-your-va-business-small/ I thought I’d share a couple of my own insights into why small is beautiful when it comes to VA businesses…
Firstly, let me put it out there – I started my business with BIG ideas. I wanted to be the biggest and best VA out there. I had visions of a franchise. I loved my branding being stamped all over everything. I was a big media whore with no shame about doing anything to get my name in print… (Well almost!).
But over time I’ve realised that big isn’t always better – as well as for the reasons which Sarah lists in her article, such as losing the personal touch. There’s a very good business case for remaining small.
1) VAT threshold: I’m no bookkeeper, but the VAT threshold where you need to start becoming a tax collector for the government is currently £82,000 – if you go over that, you need to add 20% onto your bills. Which is fine for big clients who are already registered for VAT, they simply claim it back off their own VAT bill… but your smaller clients will hurt having to pay an extra 20% on their admin fees, and you will potentially lose some of your more interesting clients. That quirky theatre company? The lovely guy who is starting up his own golf business? And then there is the headache of having to account for all the VAT and doing quarterly returns… YAWN!
2) Admin time: So often when I speak to VAs who have gone down the outsourcing route, they complain “I would have been quicker to do it myself”. Yup, our inner control freaks are alive and well, and they are outing themselves when it comes to using subcontractors. But even the most laid back amongst us will still need to set aside time each day to check the outsourcers’ work. And on top of that, you’ll need to make sure you have a system for checking their availability and dealing with their admin such as billing clients, processing their invoices etc. When I ran the call answering business, I spent most of my day dealing with squabbles on the team about who had taken a particular message or what shift they each wanted to work… It drove me completely BARMY! Which is why I no longer do it!
3) Nobody does it better: Yes, another bit of control freakery. But when it came to expanding the business and experimenting with franchising, I found it incredibly hard to get people with the same amount of drive and commitment as I had. We tried franchising particular services or areas, but it boiled down to my name being above the door, rather than theirs. Perhaps it’s because admin is such a personal service or maybe the people I chose weren’t as committed since we didn’t charge them for their licence as they were guinea pigs… Who knows? I remain unconvinced by franchising models working for being a VA – there isn’t enough unique knowledge which can be replicated easily to be able to sell it. I can’t even think of that many “expert” VAs who I would pay for business training from in the UK… Maybe one or two from the USA. Why would anyone who has the ability to sell admin services themselves, pay someone else for the privilege of working under their banner? Can you think of any VA business who is that well known that clients would prefer working with them over another VA? There is no McDonalds of VAs.
4) How much profit is there: Another learning from the call answering business – our turnover was great but in terms of profit when you factored in my time, it was dire. I worked out that each client was actually losing me £36 a month… We put up the prices but there was a ceiling to how much we could charge for that service since so many other competitors were offering the same service for less money. Plus, it didn’t really interest me – it was a service I felt I had to offer to be a proper VA, and which I’d hoped people would take in addition to other services. There really was very little crossover between two services, so there wasn’t any fallout from simply giving the whole business to the VA who was running it for me by that stage… She enjoys it and it works well alongside her other activities, I got someone I could happily recommend to clients, and lost all the headaches. In fact, as she pays me a referral fee for any clients she gets, it still makes me money!
Share your story: Did you downsize your business or take a step back from outsourcing?