Avoid These Three Money Pits for Your Virtual Business

When you are in start-up mode, it’s important to pay close attention to the numbers in your business. You will absolutely need to invest money into your new enterprise in order to set it up properly and build a strong foundation. However, there are three categories that could prove to be money-pits if you are not careful. I am an expert in the field of making mistakes and learning from them. Thus, I’d like you to learn from where I went wrong in the early days and avoid making the same mistakes.

1. Start-up Costs
   The first mistake I see many new VAs making is not calculating an accurate amount for start up costs. (I actually made the opposite mistake and spent too much money!) Starting a successful Virtual Assistant business doesn’t require tens of thousands of dollars in capital, but you will HAVE to invest money to get started. So resist the urge to think you can build this business on a shoestring budget.  If you miscalculate the start-up costs of your business, this may lead to you owing a lot more money than you begin to earn.

   Consider what technology you will need to purchase. What are the monthly operating expenses? How long will it take to turn a profit? Knowing this will give you an idea of how much money you should have saved for the first six to twelve months after you open your doors for business. Not counting the costs may in turn cost you a lot of money and  unnecessary frustration.

2. Taxes
   Please do not start your business thinking all of your money will go directly into your wallet. When you had a corporate job, your company happily deducted taxes for you. Who is going to do that for you now? You guessed it. YOU.

   It is YOUR job to make sure that your company is set up so that you will receive the best tax advantage. With that said, you are also responsible for setting aside the proper taxes so that you do not get caught in a whirlwind of back taxes and trouble with the state and Federal authorities.

   Hiring a Certified Public Accountant (CPA) is one of the best investments that you can make as a new entrepreneur. She will help you to avoid many tax pitfalls, keep you updated on your local and federal tax law and help you to file your taxes appropriately and on time. Even if you decide not to hire a CPA on a permanent basis, I highly recommend meeting with one once or twice to setup the financial structure of your business correctly. You don’t want to tackle this on your own, rather you want to create the best possible situation for you and your family.

3. Marketing Costs
   “But, I can’t afford a marketing budget.” Have you said this before? If so, I only have one question for you, ‘How can you stay in business if you do not grow your business?’ I say this with so much care and warmth for you: You can’t expect to hide behind your computer, hoping clients will show up at your door payment in hand. It simply WON’T happen.

   The whole point of going into business for yourself is for you to help other people while being the source of your own income.

   But, if you do not invest in prospecting, how will you earn money? Anyone can start a business. Smart entrepreneurs know the importance of investing in their marketing. Marketing creates awareness for the solutions you provide and attracts prospects. Having conversations with prospects is what converts them to clients. It’s service clients that generates revenue and builds your reputation. None of this will happen if you don’t market what you have to offer.  It would be useless to open the doors of your brand new business only to have zero customers walk through them. Plan to set aside funds to learn how to market your business, create your materials and implement your marketing plan. You’ll need to focus on marketing almost daily, especially in the beginning.

Take the time that is needed to get your business off to a great start. Do the proper research so that you can have a realistic number for your start-up costs. Get a CPA involved in your business as soon as you get started to avoid a ‘tax mess’. Understand that you will need to do marketing for your business and that will cost money as well. Be ready for this expense by setting up a marketing budget. Avoid these pitfalls and you will find your new business is profitable, successful and debt free!