Protecting your business interests is a must. Always remember that you are not running a not-for-profit organization. That means getting paid late by your clients is a â€œNo, noâ€! How can you avoid payment problems with your clients? Look at the three tips listed below.
1. Sign A Contract
A contract is an agreement that safeguards you and your clients. This is the first line of defense to protect yourself from client who may be trying to avoid paying you. Your terms as a service provider must be made clear in writing. Clients should know exactly what services they are paying for and how much they will owe you. Additionally, your contract should include when payment is due and what constitutes a late payment. Likely, you have heard the term, â€œthe pen is mightier than the swordâ€. When you have terms and agreements in writing, life if much easier than fighting to get someone to pay you for services that you have already rendered.
2. Get 100% Pay Up Front
When you work with a new client, do not feel bad about receiving your fee in full before you start to work on his project. When payment is made up front, there will be no money matters to squabble about during the working relationship. In fact, you as a service provider will be able to work with a clear mind and laser focus because you now have to deliver on the promise that you have been paid for. Your work is positively affected when you do not have to worry about when or if your client is going to pay on time.
3. Monthly Retainer
A great way to manage your cash flow is to work with clients on a retainer basis. For instance, you may have a 3-month retainer as your policy. That means, when your prospective clients agree to work with you, they know that they are locked in for a minimum of three months. When the agreement is signed, you both understand that the relationship is established for three months. This will surely minimize late payments, especially if you get paid before you start working. How would your cash flow change if you have three to five 3-month retainer clients?
As a Virtual Assistant, you are providing valuable services to your clients. It is part of your duty to ensure that your clients pay you on time so as not to disrupt the working relationship that you have created. Implement these three business-building habits into your practice and notice the dramatic improvement in your income and client relationships.
There is a fundamental truth about construction.Â Any building that is constructed has a better chance at lasting on bedrock than on sand. That is a guarantee!
This is why it is so important that your business has a solid foundation.Â How can you make sure that this is the case with your business?
What are some of the benefits and amenities that you enjoyed at your last place of employment?Â Perhaps you had a great insurance policy which included health, dental, disability and life insurance.Â Without a doubt you received a paycheck during the month to compensate you for the hard work that you put out. Somehow every January without fail, you received a little document that enabled you to file your taxes before mid-April.Â When you walked into your job as an employee on the first day, you did not have to worry about a thing, except doing your share in building the company.
Now, it is your turn to build a solid business by making sure that your infrastructure is set up to ensure your success.Â Following are a few things that you should have in place before you walk into your company, not as an employee, but as a savvy entrepreneur.
- Incorporation: Creating a corporation for your business will safeguard your personal assets in the event that you have a professional dispute with someone.Â The chances of this happening are slim.Â However, your business entity should be completely separate from your personal affairs.Â It is a protection for you, your company and your clients.Â You will have a bedrock foundation by legitimizing your company.
- Insurance: It will take diligent effort to find the right insurance for you and your household.Â Seek out insurance agents from people that you already know and trust.Â There are many insurance resources for entrepreneurs.Â It is important that you apply and qualify for and enroll in the insurance plans that are necessary for your family and your business before you leave a current job.
- Operations: Systems are critical to the successful business.Â What processes will you have in place for enrolling new clients into your practice?Â How will they pay you?Â Having contracts in place will protect both your company and your clients.Â Another note on operations is to separate your business expenses from your personal finances.Â Will expenses for your mobile phone and home phone fall under your business operations?Â Bank accounts should be separated as well.Â This will make it easier to file your taxes.
- Technology: As a virtual assistant, technology is your means of running your business.Â You must have reliable hardware and software.Â Trust me, you do not want to run a business using your neighborâ€™s WiFi.Â Some free services and tools may be handy.Â But when it comes to the day to day functioning of your business, you want the most reliable technology available and will need to know how to use it to best serve your clients.
- Financing: This is where many people ask, â€œCan I start a Virtual Assistance company with no money?â€Â My answer is, â€œif you find a way to do that, please let me know.â€Â I will shout that from the rooftops.Â The truth is that it takes money in order to make money.Â You need office supplies, software, hardware and savings for back up.Â I would never encourage an individual to start any sort of business with no money because I personally have no experience in that area.Â There are a number of ways to generate the capital to cover your start-up costs for your business.Â Research is the key!
These are a few of the important aspects of setting up your business that will allow you to have a bedrock-like foundation.Â If you have already started your business, you can still implement these components to strengthen your business.Â Do not to become overwhelmed by the list above.Â Every business goes through changes.Â The same will be the case for you.Â You will find that some aspects of your business work very well while others could use adjustments. This is perfectly okay!Â The learning process is continuous.
One thing is for sure, you do not want to construct a business on a sandy foundation.Â If you do, you will find that the tides of change and trouble will wash your business out to sea.Â Just like footsteps on a sandy shore are soon to disappear, without a bedrock foundation, your business will quickly fade. By implementing the points that I am teaching you in this lesson, you will be sure to have a foundation that is built to last and on which you can build a successful, sustainable business.
Build on bedrock!
Iâ€™ll be sharing additional details on these topics and the other 4 steps of my proven business building system on a FR*EE training call next Thursday, July 28th. Visit http://vasuccesssecrets.com for details!
One of the most important lessons I learned in my business, early on, was how important it is to have and maintain a strong foundation in your business.Â In order to support your growth and efforts to achieve your goals, your business needs a solid infrastructure on which you can build.Â If this infrastructure is not in place, you could find yourself in a position where you are growing too fast too soon and not serving your clients nearly as well as you should be.Â This in turn will create unnecessary stress and frustration, which equals a not so happy Virtual Assistant who is working harder and making less money than she should.
So, itâ€™s important to take stock of your business periodically and see how your foundation is holding up and what improvements you need to make.Â And if youâ€™re just starting out, youâ€™ll do yourself a HUGE favor by setting up a strong business foundation from day one.Â This is the perfect time of year to consider these points, as we are heading into summer.Â If you set aside time now to analyze your business operations and start making adjustments, youâ€™ll be primed and ready for fall 2011, while most everyone else is still trying to come back from summer vacation.
The following are my top five tips for assessing your business and strengthening your foundation:
- Review and revise your business plan â€“ Many times business owners create a business plan when they are first starting out, get excited about it, but then file it away and never look at it again.Â Sometimes new entrepreneurs donâ€™t even take the time to develop a simple business plan.Â This is a BIG mistake!Â Going through the steps to create a business plan is a terrific way to get all of your ideas down on paper and to create a roadmap to follow to grow your business.Â Itâ€™s easy to think one can keep all of their ideas, goals and strategies locked safely in their memory.Â But there are two things wrong with that.Â 1) You absolutely canâ€™t remember all of the details and 2) youâ€™ll have a more difficult time working towards them because you havenâ€™t committed your thoughts to paper.Â So schedule time on your calendar NOW to review and revise your business plan. Think about all that youâ€™ve accomplished thus far in 2011 and map out your goals for the rest of the year and then how youâ€™ll achieve them.
- Take stock of your financial situation â€“ For some this can be the least â€œexcitingâ€ part of running a business – having to deal with all of the â€œnumber stuff.â€Â But, most of us start our companies to make a profit and support our families â€“ not to unintentionally be running a non-profit organization where we work for free.Â You wonâ€™t know which category you fall into if you arenâ€™t clear on the financial state of your business.Â If you are not already doing so, ask your accountant or bookkeeper to start running monthly reports of your expenses and income so you can see how profitable you REALLY are.Â You may be surprised to find out which of your services are actually most profitable and then start focusing more attention on those.Â Also, youâ€™ll see clearly how your expenses are affecting your bottom line and what adjustments need to be made.
- Review your business standards to see if they are still working for you – One of the things my coach helped me to do when I was first starting out was to create a set of standards for my business.Â This included the hours I would work, my fee structure, how I would handle different clients, different situations, illness/vacation, etc. â€“ basically ALL of the details of how I would run my business.Â I highly recommend that you take the time to outline your standards as well.Â Itâ€™s your business, so the way you work and operate your business should be reflective of and work for you.Â After doing this youâ€™ll be clear about your boundaries and can then easily (and tactfully) share them with your clients to ensure that you are supported and protected to do your best work.
- Fine tune your marketing systems – Some Virtual Assistants have a bad habit of only marketing their business when they need a new client.Â That is a big no-no!Â As a business owner, you should only be spending your time on two things â€“ 1) serving your clients and 2) marketing your business.Â If you donâ€™t have a marketing system in place â€“ meaning a strategic plan for how to consistently present your services/solutions to your ideal clients and enroll them in your practice, then now is the time to implement one.Â You should be regularly attending networking events where your ideal clients hang out, following up on leads, engaging in social media and pursuing other effective marketing strategies.Â Map out a plan of how you will market your business for the remainder of 2011 and then commit blocks of time on your calendar to work on your marketing efforts.Â Marketing your business will be a lot easier (and much more effective) if you consistently and comfortable share what you have to offer instead of operating from panic mode because you need a new client.
- Start implementing systems in your business – You likely do some of the same tasks over and over again in serving your clients.Â At the very least, each week/month youâ€™re doing bookkeeping, marketing, reporting to your clients on project progress, etc.Â As such you should be developing systems for every aspect of your business.Â A system is simply a list of guidelines or instructions about how to handle a particular task or project.Â Itâ€™s a way for you to implement quality control into your Virtual Assistant practice so that you consistently deliver high quality results for yourself and your clients.Â Itâ€™s a way to save time, because you wonâ€™t have to think about or try and remember how to handle a particular project.Â And itâ€™s a way to make more money.Â â€œHow so?â€, you may ask.Â Because you can easily delegate certain tasks to someone else, freeing up your time and mental energy to pursue your high-payoff activities.Â The more you systematize your business the more organized and profitable you will be.Â So, start today in outlining the steps you take to operate your business and serve your clients.Â Compile the instructions into one central document or binder and create your own operations manual.Â As you continue to grow youâ€™ll have all of the information you need to run your business right at your fingertips.
Likely, you set out to be a Virtual Assistant because you wanted to pursue a career that would give you more control over your schedule and earning potential.Â So make it easier on yourself to achieve your goals, by taking steps to tighten up your foundation and get clear on your goals.Â Running a successful business obviously takes effort and dedication.Â And having a strong infrastructure and a solid plan to follow will ensure that you are spending your time and energy on the activities that will get you the results you want!
YOUR ACTION PLAN FOR THIS WEEK:
- Pull out your business plan and schedule time to review and revise it by June 1st..Â (If youâ€™re just starting out, set aside time to create your plan by the same date).
- Pull year-to-date reports on your financial situation and review them with your bookkeeper or accountant to see what adjustments may need to be made.
- Outline the details of how you will run your business so that it is working for YOU, not the other way around.
- Review the strategies that have been most effective in marketing your business and then create a plan around how you will consistently implement these tactics to attract new business.
- Start creating systems for EVERYTHING you do in your business and compile the information in one central location.
Everybody likes a good deal and to save money.Â Perhaps you clip coupons to use at the grocery store.Â Or maybe you go out to eat on family nights when kids eat free.Â You may look for “out of the box” or gently used items to get that new electronic gadget you want.
But one thing you should remember as a Virtual Assistant and a business owner is that your fees are not negotiable.
Despite the fact that the economy has changed, that isn’t a reason to reduce your rates.Â Likely, you have continued to invest time and money into improving your skills and building your expertise that will allow you to provide more value to your clients.Â Your clients need to understand that by choosing to work with you, they are working with the BEST of the BEST, and that your rates are simply a reflection of that.
Admittedly, dealing with the question, “Can you lower your rates?” can be challenging.Â While you might feel like you want to reduce your rates, you should stand your ground.Â It doesn’t have to be as difficult as you think it might be.
Here are some tips to handling the conversation if a prospect tries to negotiate your fees:
- Be confident! â€“ You should firmly believe in your rates and your expertise.Â If you donâ€™t, your clients wonâ€™t either.Â Nothing is more professional than someone who is self-assured and confident in their abilities and their value.
- Have a standard response – Knowing what to say in this situation before it happens will help prepare yourself for the conversation.Â Don’t let yourself be caught off guard.
- Don’t grovel or waiver from your response – If a potential client reacts negatively or asks you again, don’t cave.Â Stand firm with your rates and your decision.Â If they can’t afford your rates or don’t want to pay them, then they are clearly not your ideal client and wonâ€™t ever fully respect your working relationship.
Here’s an example of what I have said to people who have tried to negotiate my fees, â€œNo, my rates are not negotiable.Â They are a reflection of my skills and experience.Â So if you would like to benefit from the services I provide, that that is the fee structure I have in place.”
That’s it – don’t say another word.
There will be a kind of uncomfortable silence (perhaps uncomfortable for the prospect, NOT you) that will force the person either to say yes or no.Â If they say yes, then they understand the value you can provide their business.Â If they say no, then they are not the client for you and let them go.Â Again, don’t grovel or waiver and don’t be uncomfortable.Â Don’t underestimate your value for anyone.
When you are meeting with a potential client, it’s not just about them interviewing you — you are interviewing them to see if they deserve a place in your practice.Â Remember, taking on a new client is starting a new relationship.Â So you want that relationship to start off in the best way possible and with mutual respect.Â NOT with the client trying to de-value what you offer from day one.
What has your experience been with clients who have tried to negotiate your rates?Â Did you lower your rates for them?Â What was your experience like with this client? Post your challenges here so we can learn from each other!
One of the expenses you have to account for each year is software purchases and upgrades.Â While you don’t necessarily have to have the latest and greatest version, it can be beneficial to take advantage of new features that are released. And when you do find it necessary to upgrade your software, it’s nice to know how to get a discount.
Here are some quick tips to check out to see if you can get a discount on software:
- Employee Purchase Programs – If you or your spouse work in a corporate environment, check to see if the company offers an employee purchase program.Â Many companies are large users of software like Microsoft Office, so the company can extend their discount to their employees.Â This type of program allows you to purchase some of the most popular Microsoft titles at a significant discount.Â In some cases, as low as $20.
- Student Discount Programs – If you are in college, or have a child of school age, you can be eligible for some student discount programs.Â For example, Adobe has several student versions of their software available for up to 80% off – all you have to do is show proof of student enrollment.Â These software titles are available online or for purchase on college campuses.
- Purchasing older versions – When a new version of software is released, the company usually tries to clear out their existing inventory to make room for the new versions.Â If you are on the company’s mailing list, you’ll probably receive advance notice or even special “pre-release” prices.Â This is your sign to start looking for the deals.Â If there’s reallyÂ something you want, it might be worth your time to check every day – sometimes the popular titles go fast!
If you need to purchase software, make sure you do your research to find out if you qualify for any discounts.Â While it may take a you a little time to do the research, or even some extra steps to “prove” you qualify, the savings can be well worth it.
Just a special note about purchasing software:Â I highly recommend that you purchase your business software directly from the manufacturer or approved reseller.Â If you ever have a problem with the software, you know that you’ll be covered and can get a replacement if necessary.Â When you buy a copy from a friend, or eBay, or wherever, there are no guarantees, no support and little chance you can claim that purchase on your tax return.
This is not a purchase you can afford to “go cheap” on.Â If for any reason, the software is not usable, you can’t work.Â Which means you aren’t earning money.Â How can that be good for business?
Dealing with the accounting aspect of your business is a necessary â€œevilâ€ of being an entrepreneur.Â Whether or not you are a â€œnumbersâ€ person, keeping accurate records, billing your clients and paying your taxes are tasks that you will need to handle regularly in order to stay profitable.
These weekly processes can be simple if you set up a system to handle them.Â What is a system? It is simply a matter of documentation.Â A system is documenting the steps you take to complete a task. For example, when you get ready to bill your clients each month, you may tally up the hours/tasks you completed for them, compile a report, prepare an invoice and bill their credit card.Â What else do you do?Â What software do you use to track your time? Do you have a format for the monthly report?Â How do you prepare invoices? What steps do you take to bill their credit card?Â If you have systems for billing, you will accomplish this monthly task in a matter of minutes.Â If no systems are in place, it could result in hours of wasted time and much frustration.Â (You could be using that time to make more money in your business or take a well-deserved break).
Here are a few tips on creating systems around your monthly financial tasks that will save you precious time, money and sanity:
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