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As a virtual assistant, we deal with many different customers, using varying systems and programs to complete all sorts of tasks. If you offer book keeping services you will have come across everything from basic spreadsheets, to complex systems such as Sage, we’ve seen it all. My personal favourite has become KashFlow. It’s incredibly simple and designed specifically for small businesses.
KashFlow is an online system which has several overriding benefits, firstly your accounts are held online so you can access them from any computer with a browser (after entering your secure login details). This means several things; if your computer should crash you haven’t lost everything, you can give live access to your client and you can give access to your clients accountant to compile their required information. As there is one live copy of the accounts, the changes are available instantly to everyone given access so you don’t have multiple out of date copies everywhere.
Secondly, as you pay a monthly subscription for KashFlow, rather than a large upfront software cost, it is easier to budget as a small monthly fee. Critically within this fee the software upgrades are included. Anyone who has purchased accountancy software in the past will know that purchasing upgrades is necessary when you have several people updating your accounts at different locations. Generally the software is not backwardly compatible so as soon as one person upgrades, you all have to and upgrades can be very costly.
What is more, you get to try before you buy. You don’t even have to give a credit card number that you might later forget to cancel should you decide to use an alternative program.
Business advisors will tell you that one of the main reasons small businesses fail is cash flow. That is either they are not financed correctly in the first place, with sufficient funds to see them through the start-up phase, or that slow paying, or worse non-paying customers are destroying the financial health of the business.
When running a solo or small business there are two main reasons given as to why collecting payments from your clients can become an issue. Firstly it may be that you are so busy doing whatever it is that you do in order to make money, that you simply lose track of who has paid and which payments are late. Secondly, particularly if you are a solo business, there can be a level of embarrassment when the only person that can call the customer asking for the invoice to be paid, is the same person who provided the service.
Whatever the reason, it is imperative that you manage your cash flow effectively or you will soon be out of business. You should have a cash flow forecast that is made up of expected receipts and disbursements for the following 3 months (as a minimum) with some room for the unexpected factored in. With this information to hand you can easily see any potential difficult spots.
Once you have put together your cash flow forecast, it’s a good idea to take a close look at the expenses part of the forecast. Look for where you can cut some costs or find alternative suppliers, and think about what items are ‘nice to have’ but not essential to your business.
With the expenses under control you must make sure that the receipt part of the equation is taken care of with an effective collection system. Whichever system you use for issuing your customer invoices, set up a system for following up late payments. Get into the habit of issuing statements and following up by email, telephone or letter depending what is appropriate for you and your business.
So here we are, fast approaching another financial year end. It’s around now that I run a bit of a review of how we’ve done over the past year. What has worked and what hasn’t, what’s up and what’s down.
So if you haven’t done it yet, why not spend a couple of hours reviewing how you have done, and decide what changes you want to make in the coming 12 months?
Being a Virtual Assistant, just like any other business, is a numbers game. How many contacts you have made over the last year? Of these, how many have you turned in to prospects? And, how many clients you have secured as a result? You should also know the average value of your clients and their average lifetime value. These figures can tell you some really interesting things.
For example, if you know that over the previous 12 months you made:
- 300 contacts, of whom
- 100 became prospects (by showing a real interest in what you offer), which resulted in
- 15 new clients, each of whom spent an average
- £15,000 per year, and stayed with you for an average duration of
- two years
You will know that your clients have an average lifetime value of £30,000. And, to generate each client, you need to make 20 new contacts (15 clients from an original 300 contacts: 300/15). Suddenly, the prospect of attending a few networking events over the next couple of months to find 20 new contacts does not seem such a drag, as you know that, on average, you will make £30,000 for your efforts.
What you can also do is add up what you have spent on marketing, networking and other business-generating tools during the year. This will show the return on investment these have made. If you spent £2,000 on marketing your business and generated 15 new clients (with an average lifetime spend of £30,000), you know that that £2,000 has resulted in £450,000 worth of sales. That’s a return of £225 for every pound spent. Excellent! You can break that down further if you have monitored where these contacts learned of you. You can then identify exactly which marketing, networking and advertising methods have given the greatest returns.
When it comes to planning for the next year, armed with this information, you can invest more in your most effective marketing methods, and less on the less effective. So, if you spent £1,000 on a networking group, which achieved one client, but only £50 advertising in an online Virtual Assistant directory, which resulted in three new clients, it does not take a genius to work out that spending more on advertising in the directory might be a better idea than renewing the membership of the networking group.
Also, take a long hard look at your ‘sales funnel’ – the process that people go through from being contacts to becoming clients. What are your conversion rates from contact to prospect and from prospect to client? Where are you losing people? If you find that you have lots of contacts but few prospects, are your contacts fully aware of what you do? Are you tailoring your offering to appeal directly to these people? If you have lots of prospects, but they are not turning into clients, are you following up properly? Do you need to set up a better relationship-building system to develop their confidence in you? As you identify these gaps and plug them, you will need to spend less on generating contacts, as more of your existing ones will become clients? Happy days!
As a virtual assistant you need to share files in some way with your clients. Often you will find your clients are happy to email latest versions of documents and spreadsheets backwards and forwards and some even have a file-sharing system in place that you can have access to.
But what happens if your client doesn’t have their own systems and you will be both updating a ‘live’ file such as a contacts database or an expenses spreadsheet? How do you both have access to the same current version of the file? You can purchase file sharing software such as Microsoft’s Sharepoint, or you can use free software such as Google Docs which, not very helpfully, interferes with the formatting of some documents and limits the size and/or formats of the files you can upload.
Well now, there’s a free option that not only works brilliantly, but also has many other features including access to 30 days worth of back up copies, in case you accidentally delete or ruin a file. You can also access your files remotely when you are out of the office so there’s no longer a need to take that laptop on holiday!
You should allot a certain portion of your day to email and to regular mail. For example, allot one hour in the morning and one hour in the afternoon to handling all your written communications. Unless you dedicate specific time slots to the handling of email and post, you will soon find yourself on the downward slope of decreased productivity as you constantly check and respond to email to put off whatever you should be doing.
In a nutshell, the success of your VA business is entirely and completely reliant upon you and the decisions that you make. Success is within your reach, if only you can stay focused on your goals. You must decide to reach for your goals, and then, you must have the discipline necessary to reach them.
Don’t permit your friends and extended family to put on you. Many people are under the misapprehension that if someone works from home then they are not actually working. They may believe that you are fair game for a social call during the day or that you may be able to run errands that would otherwise mean them taking time off work.
It’s really important to set the ground rules early and then stand firm. You must make certain your friends and family understand that when you are working, then you ARE working and that when your time is interrupted, you will not be earning. You are the only one who can stand up for you. Your friends and family will seldom be able to appreciate your dedication to your business, unless you make the effort to make sure that they have the same respect for your business that you do.
When you are dealing with family in the course of your workday, it is important to schedule your activities as much as possible. With small children, you must take time when you need to, but you should also work hard to make sure you dedicate a specific number of hours to your workday.
With older children, it is much easier to tell them that you will be working between the hours of x and y. Then your children, and even your friends, must understand that certain hours of your day are devoted to the activities of your business.