How Much Should I Pay a Virtual Assistant?

A virtual assistant is a person who works remotely in your business. This means that they could be on another floor in your office building, down the street, or across the globe.

I know virtual assistants who charge $100 per hour, and virtual assistants who charge $4 an hour.

Typically, as you might expect, the more specialized a person’s skills, the more you will pay. Also, if you are hiring in the western part of the world, where the cost of living is high, you can expect to pay more. If you hire from somewhere like the Philippines, South America, or India, you can expect to pay less.

There are lots of misconceptions about these rate differences.

Misconception #1:

Paying someone less than $10 per hour is unethical.

False.  If you hire someone in the Philippines, for example, understand that the cost of living there is much less than in the USA.  The infographic below shows just how different the cost of living is:

For the small business person who can’t afford to pay $25+ per hour, especially at the start, this is a perfect solution.

But the key to success for the business owner and the VA, and what we teach in our program The Front Row CEO, is that it’s important to 1) guarantee hours/use a salary model  2) include bonuses or profit-sharing opportunities.

The salary model:  After a trial period of a week to one month, paid hourly, it’s a good idea to start paying your virtual assistant on a “salary model”. (It’s not *really* a salary, as your VA in the Philippines is not recognized as an employee of your company. They are technically freelancers. But you basically pay them the same amount each week.)  This will go a long way in instilling confidence and trust for both of you. For the VA, this security will almost guarantee that they will stay with you for years, rather than just weeks or months. The mindset here is that the CEO is more concerned with the work getting done, rather than policing the clock.  

Bonuses and profit sharing: As your business grows, everyone grows. When you and your team have success from a product launch, for example, consider rewarding everyone with a cash bonus. Setting goals, with cash rewards, is also a wonderful way to keep morale high. For the VA, this creates a true sense of ownership in your business.

Misconception #2

“The pay is less, but the quality of work is not as good”

False! You can expect to find highly skilled, fluent-in-english, hard-working, dedicated, professional VA’s in the Philippines and all across the world.  If you’ve ever hired a virtual assistant and ended up disappointed, there’s a good chance that 1) your hiring process was not set up to screen out those who were unqualified 2) your onboarding process didn’t include the components necessary to set him/her up for success or 3) when he/she started working for you, there were no systems and processes in place, or, those systems weren’t clear.

A common pricing model for the Philippines would be to start at $5 per hour for a trial week, or a trial month, paid hourly. 

Once hired, if a full time position, the salary would be $200 per week, or $800 per month.

If part time, $100 per week, or $400 per month.

You can read more about why I recommend a salary model over hourly, here.

If you are hiring in the United States, you can find a general virtual assistant for $25-40 per hour. For 40 hours per week, you should expect to pay $1000 per week, or $4000 month.

The cost of living in the Philippines is much less than in the US. Small business owners can leverage the exchange rate to create a win-win for VA and CEO.  If you offer a salary model, and supplement that with generous performance bonuses, holiday bonuses, and profit-sharing, it can be life-changing. The idea is to hire an assistant who will be with you for years, not weeks or months. This is someone who will grow with you, and together, you will grow your business. Over time, the idea is that your VA can be paid the equivalent of a VA anywhere in the world, because your business will have scaled to a level that makes it possible.

Are You Ready to Hire a Virtual Assistant?

What is a virtual assistant?

A virtual assistant is a human being (I’m not referring to Siri, or Alexa, or an operating system akin to what you may have seen in the movie, “Her”). This is a person who works remotely in your business. They could be on another floor in your business, or on the other side of the world.

When I talk about virtual assistants, I’m referring to a generalist. This person will likely have expertise in one particular area, but their role in your business will be broad.  When looking for a specialist assistant, I think more of “project manager”. 

“Am I ready for a VA?”

More often than not, I am inclined to say “yes you are”.

How can that be? How can I be so sure that you are ready when I don’t know you or your business?

Because, when set up correctly,  two heads are better than one. It’s that simple. 

I don’t need to know your revenue  in your business, because you can start with a virtual assistant, part time, for about $100 a week. (If you cannot spare $100 a week in your business, I would argue that you don’t have a business, you have a hobby.)

I don’t need to know what industry you are in, because whether you are B2B, B2C, brick and mortar, or a professor at an ivy league school, a virtual assistant is going to help you get where you need to go, FASTER.

But there are certain things to consider before you take the plunge:

The first and most important question to ask yourself is, “Am I ready to let go of some things?”.

I have a friend who runs an online business who told me that she left her corporate job because she was sick of managing people. She loves being alone in her business. She loves the feeling of freedom that comes with that. She knows her business would grow faster and that she would be more profitable if she hired someone, but to her, it’s not worth it. She’s happy with the slow but steady growth of her business. So obviously, it would not be a good idea for her to hire a VA.

You need to make sure that you WANT the help. That you WANT to share the highs and lows and twists and turns with someone else.

It may be that you’ve hired someone before, but it was more trouble than it was worth. Either they didn’t perform as well as you had hoped, or you spent so much time trying to keep them busy, you didn’t get anything done! You fell into the “might-as-well-do-it-myself” trap. And this is very common.

The good news is, once you make up your mind that you want to hire a VA, the pre-work you need to do ahead of time to set yourself up for success  is not as overwhelming as you imagine. 

You don’t have to have perfectly organized Drop Boxes, meticulous spreadsheets, a content calendar, or a color-coded Trello board.

But you do need to take these next steps: 

1. Define : What is it you need help with most immediately? Social media posting? Email management? Research? If you don’t know what you need help with, you won’t be able to set success metrics for your new VA. Everyone needs to know what success looks like.

Completing the following sentence will help you to hone in on exactly your expectations are: 

I need help with _________(social media management)_________ so that I can___________ (increase new leads by 20% each month)________.

Now that you know why you need a VA and what you want him/her to help you with, it’s helpful to put in place a few systems or processes so that once you hire your VA, they can work without you, or with minimal oversight.  The more you can remove yourself from the process, the better.

Here’s an example of a simple social media management process.

Click here to access our Trello board and make a copy.

Click here access Social Media Management Document.

Here’s an example of a newsletter process/system.

Click here to access our Trello board and make a copy.

Click here to access our newsletter process document.

2. Guide: Often I hear from people who were disappointed with their VAs because they started the journey assuming that once they handed things off to the VA, they could peace out. Not only is this not true, you don’t want it to be true. Guidance is where the magic happens. No, you don’t want to be holding your VA’s hand all day long. Of course not. But with your feedback and guidance, your VA will become a better VA, you will become a better CEO, and your business will become exponentially more efficient and a place where you and your team will thrive for years to come. 

How to give guidance and feedback without eating up all of your time?

3. Weekly team meetings: each week it’s a good idea to have a short meeting via Zoom or Skype to review what’s ahead. My team meets every Monday at 9am EST. Our agenda is always the same: 1) we review the calendar 2) I review our newsletter via screenshare 3) Each person shares anything they need feedback on, or any announcements that the team needs to be aware of. This meeting is usually between 15-30 minutes.

4. A daily shared Google Doc.  This sounds so basic and that’s because it is. Don’t be fooled, though. It’s really powerful.  I share a Google Doc with each of my VA’s. In other words, each VA shares a Google Doc with me that is just for the two of us. 

There are 3 questions on the document:

1. What did you accomplish today?

2. Do you have any questions?

3. Do you have any suggestions?

We always stay inside the one document, and the VA updates it daily and submits it to me at the end of her shift. We are literally on the same page and I’m able to give feedback and guidance without interruption throughout the day. By asking “do you have suggestions”, I am able to tap into hidden talents! The feedback you will receive from this one question can transform your business.

Quarterly reviews. It’s very important to set time aside for your quarterly reviews. Everyone needs feedback to improve. Leave room in this meeting for your VA to give you feedback, too. 

Final thoughts:

You are ready for a VA if you are ready to scale your business by handing over tasks that are keeping you from focusing on the work that only you can do. If you can slow down long enough to create some simple systems and processes before you hire, define what it is you need help with, and give structured guidance to your virtual assistant, you are ready to hire a VA. And remember, you don’t have to have it all figured out at the beginning. Your VA will ideally be with you for years and as time goes by, your business, and your relationship will change and grow and flourish.  It’s a worthwhile journey!

5 Ways To Organize Your Finances for Year End

2020 is literally right around the corner. New year and new decade! Before you pop that champagne, take time to prepare your business for the end of the year.

I know I know. Yuck. But it’s important, and doesn’t have to be all that bad. End-of-year prep makes tax time easier, makes sure all your financial info for the current year is accurate and up to date, and lets you start the next year out on the right foot. So your business keeps earning and you stress less in the year to come.

That sounds pretty good, right?

Here are five steps you can take now to prepare your business for the end of the year.

1. Organize your bookkeeping

Getting your bookkeeping organized for the year that’s ending will help you rest easy at night. You’ll know that all your numbers for the year add up, and that the information on your year-end financial statements is correct. 

One of the easiest ways to take care of your bookkeeping is to sign up for a remote bookkeeping solution. My secret weapon is Bench. They take care of my bookkeeping year round. 

Double check all your transaction categories

Go back and make sure that every transaction you’ve recorded for the year is correctly categorized. If you made a categorization error in February, and then kept repeating that error, it could have a major impact by the end of the year.

For example— say you’ve been incorrectly categorizing credit card processing fees for your biz as part of your overhead. That could give you a fluctuating monthly overhead expense; if use it to make financial projections for the new year, and your numbers will be off. Fixing the problem now will save you trouble once the books are closed.

Balance the books

If you use the double entry method of bookkeeping, it’s essential that all your credits and debits match up. Otherwise, some accounts may actually hold less value than your books say. 

You can do this at the same time you’re double checking your transaction categories. Make sure that each time an account is credited, another account is debited the same amount—and vice versa.

Reconcile your bank accounts

When you reconcile your bank accounts, you make sure your bank statements match up with your books. It’s how you ensure your books reflect reality—the real, tangible cash you have to work with.

Reconciling bank accounts isn’t complicated, but there are steps you need to follow to do it accurately. Bench has a helpful guide to bank reconciliation for your business.

Talk to a professional

Especially if this is your first time filing taxes for your business, it’s wise to enlist the help of a CPA. They can double check your books and make sure everything adds up, so your tax filing is accurate. What’s more, they may be able to identify tax deductions you’ve overlooked. That means your business will save more money in the new year. Close the books on Dec. 31st.

On the last day of the year, close the books. That means adding up all your numbers for the year, making sure everything is balanced, and preparing year-end financial statements. You’ll use those statements to file your tax return.

If you have a bookkeeper, they’ll close the books for you. They’ll also complete other preparation steps, like checking transaction categories and balancing the books. Again, I don’t really worry about this because Bench does it for me.

2. Back up your itemized deductions with paperwork

If you’re claiming itemized deductions on your tax return, you need to make sure that each tax deduction is backed up by documentation. In the event that you’re audited, you’ll need those receipts to support your claims. If you can’t prove that your deductions were valid, the IRS can penalize you. #NotFun

Make sure you hold on to the following:

• Receipts

• Cash register tapes

• Deposit information (cash and credit sales)

• Invoices

• Canceled checks or other proof of payment/electronic funds transferred

• Credit card receipts

• Bank statements

• Petty cash slips for small cash payments

• Accounts payable and receivable

• Payroll records

• Tax filings

• Previous tax returns

• W2 and 1099 forms

• Any other documentary evidence that supports an item of income, deduction, or credit shown on your tax return

Saving receipts

Receipts for business purchases are one of the most common types of business records. You should hold on to every receipt for at least three years. That’s the length of the statute of limitations—the amount of time the IRS has to audit you. 

On every receipt you keep, be sure to list:

• The date

• What you paid for

• What the purchase was

If you’re writing off a business meal, be sure to list on the receipt who attended the meal, and the business-related topics you discussed. 

The best way to keep track of expense records

Guess what...a shoebox is not a filing cabinet.

If you’re forced at the end of the year to sort through all your receipts and put them in order, it’s time to switch to a new system.

Going paperless cuts down on clutter and helps make sure nothing slips through the cracks. Apps like Expensify allow you to photograph and categorize your receipts, then upload them to the cloud—where they’ll be organized by type, and protected from hazards like sudden gusts of wind. Or you can just use Evernote, which is one of my favorite apps of all time. 

3. Set aside money for taxes

When you’re self-employed, it’s up to you to figure out how much you owe in taxes, and pay it to the IRS. 

That may sound like a big responsibility. But don’t worry: A few shortcuts can help.

This is the part where I have to tell you about Profit First, which is actually a book by Mike Michalowicz. His system has completely changed my business, for the better.

Finances really aren’t my strong suit, but I’m a systems girl.  And his system is very straight-forward, even for the most financially illiterate (like me!). In short, you routinely move money each quarter into separate bank accounts...most importantly, taxes/profits/and operating expenses. Kind of how your grandmother or great grandmother used to take the paycheck and put the mortgage in one envelope, money for groceries in another, utilities in another, and so on. What was left over was left over. In the Profit First system, this guarantees that you actually see a profit because you are moving it to your profit account. He also spells out how to figure out what percentage of what goes where.

But generally speaking, if you aren’t using the Profit First System, you want to follow the 30 % rule. You want to be prepared to pay about 30% of your gross income to the IRS as taxes. If you’re going back retroactively to put together money for tax payments, get together 30% of your income for the year. (This is when it’s handy to have year-end financial statements—so you can easily see how much you earned for the year.)

Next year, save yourself the hassle of sorting out taxes retroactively: Set them aside as you earn.

Set aside taxes well in advance

There are three methods for setting aside taxes as you earn income: Per-payment, monthly, and yearly.

Per-payment works well if you invoice clients. Every time a client pays you, take 30% and set it aside for taxes.

Monthly is best if your business goes through a lot of transactions every month—for instance, if you run a bustling ecommerce business. In that case, each month, set aside 30% of your gross income.

The yearly approach only makes sense if your business is small, you earn income infrequently, and you don’t need to make estimated quarterly payments. If your business is still in its side hustle phase, it may be okay to go back and set aside cash at the end of the year. Still, there’s no reason you can’t start using the monthly or per-payment method now—it’ll establish good habits for later on, when your business grows and your income is higher.

Create a separate account

Dipping into your tax savings is a major no-no. You don’t want to come up short at the end of the year, unable to pay your taxes. The best way to keep your tax withholdings separate from the rest of your income is to create a separate savings account. That way, you’ll know exactly how much you have—and you’ll be less tempted to spend it.

4. Get up to date on tax reforms

*Yawn*...fight the urge to nod off. “Tax reforms” may not be the most thrilling pair of words in the English language, but they’re important. 

That’s because, every year, the IRS makes changes to tax laws. That could mean you’re no longer eligible for certain tax deductions, or the deadlines for filing certain forms have changed.

For instance: The most recent major change to taxes was the Tax Cuts and Jobs Act, in 2018. It set a new tax rate for C corporations—so if your business was incorporated, you’d end up owing less than you may have planned. It introduced a new deduction for so-called “pass through entities”—so if you ran a sole proprietorship or single-member LLC, you had a new way to write off expenses. And it made changes to which deductions businesses could claim across the board.

These changes are important to stay on top of. Every year, the IRS puts out Publication 5318. It tells businesses what kinds of changes to tax law they can expect in the coming year. Make sure you read it when it’s published. 

You may want to hire a CPA to file your taxes. It’s their job to stay on top of the latest changes in tax law, and make sure you’re in compliance. 

I’ve been using the same local firm for years and have developed a relationship with them so I’m sticking with them. But Bench just added tax/accounting services, too. Your bookkeepers will work one-on-one with tax professionals to get your taxes filed and 100% compliant with the current year’s tax laws.

So you don’t need to bring your books to a CPA, and explain how your business works. Since your Bench team produces all your financial statements throughout the year, and has hands-on knowledge about your expenses, they can work with professional tax filers to make sure your return is prepared accurately, and taking advantage of write-offs.

Ooh lah lah. Sexy, right?

5. Get the new year off to a great start

This New Year’s Eve, make a resolution to run your business more smoothly and effectively than you did the year before. Here are a few simple steps you can take to make it happen:

1. Do an internal audit.

Don’t let the word “audit” scare you. An internal audit looks at your accounting processes and operations, and makes sure that everything is running as efficiently and cost-effectively as possible. 

Taking time to review your standard practices—how and when you record transactions on the books, how you store your business records, your invoicing cycle—can highlight ways to improve. That could mean entering sales on the books nightly, instead of weekly. Or, it could mean putting a whole new accounting system in place. Either way, your business will benefit.

2. Prepare financial reports

If you haven’t been disciplined about preparing financial reports, now is the time to start. Make sure that, by the end of January, you’ve got an income statement, cash flow statement, and balance sheet for the month. Then rinse and repeat: Your aim is to have accurate, up to date financial reports for every month of the year.

These taxes won’t only make it easier to file your taxes at the end of the year. You’ll have all the information you need to make informed business plans—like deciding how to reinvest income, or where to reduce expenses. That could mean more profit for your business in the long run.

3. Put together a financial forecast

When you create a financial forecast, you look at how your business has performed in the past, then project that performance into the future. It helps you prepare for events to come, and see where your business will end up depending on which business moves you make. 

Once you’ve created a financial forecast, you can refer to it throughout the year to help you make business decisions. For instance, a forecast can help you identify your busy and slow seasons, and how investments in your business will pay off. That could affect everything from your operating hours during certain times of the year, to whether you take out a loan to expand your business.

This guide to financial forecasting is straightforward, and includes examples you can use to create your own forecasts.

By taking five straightforward steps at the end of the year, you can make sure next year goes smoothly. 

You definitely want to wrap up the previous year’s accounting neatly, and make sure everything adds up and makes sense. Then you’re ready to file your taxes, or have somebody, or a service like Bench, do it for you. I’m a huge fan of outsourcing, and creating systems in our businesses, (which is why I created Front Row CEO (launching in January).) Financial stuff doesn’t interest me, it gives me a headache, and it’s definitely one of those things I’d rather hand over to an expert.

Did I miss any year-end tasks? Let me know in the comments below.

*Some of the links in this article are affiliate links. That means that I get some sort of small reward for you sharing with you if you end up purchasing. I only recommend products and services that I personally use and love.

How to 10X Your Productivity

My favorite Chrome browser plug-in in the world is called One Tab and you already be using it. Stick with me because I’m going to show you a feature in the app that you may not know about. If you are new to One Tab, it’s a free Chrome browser plug-in that allows you to collapse all of your open tabs into one tab, for future reference.

But that’s just the beginning of the fabulosity! . In the video below, what I show you are some features that allows you to create whole systems with a click of a button. Now, that’s my kind of app!

After you watch the video. let me know in the comments below if you found it helpful. If you aren't already subscribed to my YouTube channel, make sure and do that and you'll never miss one of these tutorials.

How To Use IFTTT TO Automate Your Life and Business

How to Use IFTTT to Automate Your Life and Business.

In this video tutorial I will be talking about how to set up your IFTTT applets. What is IFTTT? It stands for IF THIS THEN THAT. In essence it connects applications and devices together to automate things and make your life just a bit easier. These "applets" as they are called are "recipes" that trigger certain actions between apps and/or devices. 

There are literally hundreds if not thousands of combinations of these applets you can set up to help you manage lots of mundane, day-to-day tasks.

How I Use Evernote to Manage My Biz & My Life

Evernote is one of the most important tools I use in my business, and my life.  Although I do still love a nice sharp pencil and a clean pad of paper, nothing beats Evernote for keeping things organized. The secret to using Evernote successfully is in it's tagging feature. Yes, you can create oodles of notebooks and categories, but if you are anything like me, you will forget where you put something as soon as you put it there. Tags allow you to simple type whatever logical word comes to mind into the search bar, and if you tagged your item, it will pop up instantly. 

I created this video, below to demonstrate.

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How do you use Evernote? I'd love to know!