Net Advantage? What’s that?
When starting out in business it can be tempting to focus on income – or revenue. But you also have to take care of the outgoings – or expenditure. Because what really counts is how much you have left once you’ve done the sums. That’s your net income. This may sound really basic and obvious but even the most established VA can take their eye off the ball with this. You are not just a service provider. You are running a business. It’s important to know where you are with your money. There’s a saying ‘Cashflow is King’.
It’s a well-known saying for a reason.
Many companies, even well-known brands, are experiencing the angst of not having the money coming in to cover their costs. Around the world, it has led to redundancies and a threat to thousands and thousands of jobs. You’re not a corporate or famous High Street name. But as a VA you are in business – whether you’re a limited company, or you call yourself self-employed or freelance.
There are two ways to maximise your net income.
Earn more. Spend less. The greater the gap between the two, the bigger your net income. It’s really easy to fall into the trap of getting a little excited when money comes in – and then instantly thinking how you’re going to spend it. (We’ve probably all been there). To generate more income, you can do one, more or all of the following three steps:
- Get more clients or customers
- Get clients paying more for your services
- Get clients buying more often
Step #1 is about marketing – knowing your audience (or audiences), finding them and sharing the right kind of messages with them. Step #2 is about reviewing your prices – and charging more for what you do. The more you can demonstrate your value, the more you can charge. Step #3 is about coming up with new offers, developing packages and creating more profitable ways of working. If you are doing regular work for a client, you could propose a monthly retainer. Let’s say you do 30 hours a week, just as an example, and you charge £20 per hour. What if you raised your fees to £22 per hour? That’s an extra £60 per week or £240 to £300 per month. Push it to £25 per hour and that’s an additional £150 per week, or £600 to £750 extra each month. You might be work more hours than in the example above. You might be working less. Your rate may be higher or lower. Whatever the case, it’s a simple way for you to generate some extra income.
When was the last time you put your prices up?
Think about how you can make more each month, giving yourself more stability or the means to take on your own assistant (to help with client work, your own admin or to assist with your marketing). And there are plenty of ways to reign in what you spend and save on those outgoings.
Here are some suggestions.
Have one less coffee out a week and you could have an extra £100-150 in your pocket within a year. Is there a newspaper or magazine you receive but barely read? It might be time to review or cancel the subscription. Many people have a gym membership yet never or rarely visit the gym. If that’s you, think about other ways you could exercise and save yourself hundreds a year in the process. It’s also amazing how the weekly food shopping all adds up over time. If you could save £5 or £10 a week, that gifts you between £250 and £500 in a year. In five years, that could amount to a £2,500 nest egg – for a nice holiday or home improvements, or towards a new kitchen or car.
And let’s not forget.
You could even use some or all of that saving to invest in growing your business. A new website, marketing or taking on an assistant so you can focus on your priorities more. An online course to develop your skills. Even more reason to look for opportunities to improve that net income. Some savings will be easier. Some you will have to fight for. There seems to be little or no reward for loyalty when it comes to your household energy, broadband or mobile phone bills. That was certainly the case from my time in the UK and it may be the same where you are. It pays to shop around, compare offers and negotiate better deals. It shouldn’t have to be that way, of course, but it seems to be the way these kinds of companies operate. Do the same with car insurance, household insurance and other premiums where you have a choice.
It all adds up.
When you really go for it, annual savings could be in the hundreds or higher. Over several years it can tot up to thousands of pounds. That is, for most people, a significant sum of money. It’s why everyone should be looking at opportunities, not just for a new business but also to streamline those outgoings. As an IT trainer and trainer in MS Office and Microsoft 365, naturally, I’m going to share a specific word of advice.
Check your tech.
Give some thought to any subscriptions you pay for software, tech tools and applications. If you already have Microsoft Teams, do you really need to be paying for Zoom Pro, Business or Enterprise? You can hold video calls, virtual meetings and training sessions just with Teams. Paying for Survey Monkey? You can run surveys, quizzes and polls through Microsoft Teams. Quit both Zoom and Survey Monkey and you save at least £35 a month. That’s £420 over the year, each year. If what’s stopping you from using Microsoft Teams to the full is not knowing how to do stuff in it, then it’s time to learn and build your ‘how-to’ confidence. That’s where somebody like me can help you in a number of ways. Learn in your own time and at your own pace with my online courses in Microsoft Teams. Ask questions and make use of the personalised support offered in my flexible, high-value yet very affordable Trainer in Your Pocket membership. Need more focused or deeper 1:1 training? We can work together on whatever aspect of MS Office or Microsoft 365 you want. As more and more training, mentoring, coaching and presentations are being conducted online, many people are turning to Teams. But they want to ensure their events and sessions are not jeopardised by naivety with the tech side. It’s why I created a Teams course specifically for trainers, speakers and coaches. Whether you’re just starting out, well established or advanced in your VA career or business – you have to be business-like.
Keep an eye on your numbers.
What’s coming in? What’s going out? How is it flowing now? What’s the forecast ahead? Remember, you’re looking to earn more and save more. If things are a bit flat, in limbo or a struggle right now – take a look at your outgoings and see where savings can be made. Stay connected with your existing clients. How can you help them? What else can you offer them? Do they know anyone else who might value your services? Have they given you a wonderful testimonial or would they be willing to be a case study? If your business is strong right now, how will you keep it that way? How will you develop and grow it further? You may be in a good position to raise your fees or negotiate a better package. Alternatively, you may want to explore how you can incorporate support for a charity into your income model.
Do what works best for you.
Consider your values and what’s important to you in the world – or your local community. Could you set aside a small percentage of your sales or net profit to help a cause that’s deep to your heart? Yes, of course, income and earning money is important – to pay the bills and allow us to lead the life we want. But business is also a way for you to share your values, connect or reconnect with what’s important to you, and give something back. The greater your net income, the more choices you have. What will you do in the month ahead to save and earn?