This article is by our guest writer Diana Ennen, who is also the Author of Virtual Assistant: The Series, Become a Highly Successful, Sought After VA, & The Corel Word Perfect Office Ready Virtual Assistant Solution Pack. She also owns a website: http://www.virtualwordpublishing.com
Virtual Assistants (VAs) are highly skilled professionals who provide administrative support and specialized services to businesses, entrepreneurs, executives, and others who have more work to do than time to do it. Examples of services a VA can do include web design and maintenance, word processing, meeting and event planning, desktop publishing, internet research, e-mail coordination, business start-up consultations and so much more. This can be the perfect work-at-home opportunity for many with good computer and Internet skills. Following are several Do’s and Dont’s to keep in mind for starting and operating your Virtual Assisting business.
DO — Decide on a targeted market and initially focus your marketing efforts in that area. By developing a “niche” in your field, your reputation spreads quickly and soon you become a recognized expert. Several specialties include: publicity and marketing, website design, article writing and distribution, press release writing and distribution, medical, legal or business transcription, medical billing and coding, resume consulting, transaction coordination — real estate industry, desktop publishing, manuscript preparing, academic typing, e-mail support, internet research, etc.
DO — Be creative about where you can find business. The Internet offers a large variety of potential for clients just waiting for you to contact them. Actively network and don’t limit your marketing to simply placing a few ads in newspapers or the Yellow Pages. You want to find where there might be a need- and go fill it.
DO — Write a complete business plan and marketing plan. Too many leave out this vital step and waste valuable time unorganized and without a clear-cut goal and direction for their business. When starting a business you will have tons of ideas floating around. You need to materialize all these and put them into a workable plan of action.
DO — Develop a website that looks sensational! Your website is often the first connection a potential client has with your services. It must immediately let them know that they are dealing with a professional. Your site must then have the POWER to draw them to you and contact you. Let them see that you value quality by the look and feel of it. Additional tips include letting them know what services you offer and why you are qualified to offer those services by mentioning your experience and education. Be sure to include points on why you stand out among the rest and are the BEST! For example, if you have been featured in articles, radio shows, etc., have them listed with the dates.
DO — Learn everything you can about starting a business. Knowledge is power and the more you know, the greater your chances for success. Look to online services and message boards and chats to talk with other Virtual Assistants operating a business. Remember these are often run by pros who have been in business for years and are willing to share their experience.
For example, I mentor and manage virtual assisting boards on HBWM.com, Momspreneursonline.com and VAnetworking.com. With 23 year’s experience, I often know what works and what doesn’t in starting a business and staying successful, so my experience can prove beneficial.
DO — Join associations that are targeted for our Industry. A few of the more popular ones are IAVOA.com and IVAA.com, but there are many others. By connecting with these associations and being active, you learn from them what works and what doesn’t and you are able to post your questions to associate members via list serves often getting answers to your questions within minutes.
DO — Read, read, read. By frequently continuing to increase your skills and your knowledge of your profession, the end result is a more confident satisfied you. Every tip you get from a book can be a new tool in your business. I recommend highlighting areas from several books and adding them to your library. Keep in mind that you might not use that idea today, but it might apply to specialties you might add down the road. We encourage you to purchase our book, Virtual Assistant the Series, Become a Highly Successful Sought After VA with its accompanying workbook. It has everything you need to succeed in your own business.
DO – Enjoy. There’s no greater feeling than landing that first client or finishing your first big project. Plus, wait until you get the opportunity to tell someone you own and operate your own virtual assisting business. It sure beats I’m a secretary at …. Plus, when you enjoy your business it shows. Your clients will sense your positive attitude and want to be a part
of your team.
DON’T — Underprice your services. The average virtual assistant today makes $35 to $100 an hour, depending on their skills, services offered, location, and years of experience. Don’t make the mistake of assuming if you charge the lowest prices, you’ll get the most work. You won’t. Instead, you’ll end up working outrageous hours for peanuts! Clients will pay more for professional services. When a potential client discovers you’re charging a lower rate than standard, they often feel they will receive a quality of services that is also lower.
DON’T — Overextend yourself. One of the common mistakes many virtual assistants make is to accept too much work and then not be able to accurately complete it. Learn to say no or have a back-up helper who can assist you with any overflow work. Remember one of the most important ingredients for success is keeping your clients satisfied. If you overextend yourself and make a lot of errors, it will jeopardize your business.
DON’T — Get discouraged. It takes time to get a business going. Plan ahead and have money saved in reserve. Don’t buy items until you have found the best possible price and there is an absolute need. This advance planning takes the pressure off of having to make money NOW. If things are slow and the phone just isn’t ringing … MAKE IT RING!! There’s plenty of work out there, you just need to aggressively pursue it.
Finally, the most important ingredient for success is your belief in yourself. If you believe that with your skills and experience, you can own your own business, then there’s nothing stopping you. DREAMS DO COME TRUE.SOMETIMES YOU JUST NEED TO MAKE THEM HAPPEN.
Category: Starting Up
Categories
Starting Your Own Business
Some people would think that in order to start business, you need to work and that you need to accumulate capital.
There are two parts to this. The first is yes, you do you need a lot of experience to start a business. The second part is you do need a lot of capital.
A question people ask, do you need a lot of experience in a certain business to start a business, I would say yes, you do.
But people say I’ve never worked before and they ask, “Where did you get the experience from”.
Well here’s some of my personal experience that will answer this question.
Well I did work. It’s just that I started very, very young. And in fact a lot of the work that I did was voluntary work. I was not paid but yes, I did.
Like for example, the first business I ever started was the mobile disco business. I started at 15 years old and for those of you who do not know what a mobile disco is; basically you own a set of equipment, lighting, sound system. And when people have got parties, like for example birthday parties, functions, dinner and dance, you go up there, you set up the disco.
And in fact, before I set up that mobile disco company, I learned it from another company by working for them part time as a DJ. Even before that, I went to my own parties and that’s how it started basically
The next part is about capital. Well, do you need a bit of capital? It took me $2,000 to start my mobile disco company. A lot of people have this mindset, that you need hundreds of thousands and from my personal experience, no you don’t, you can start with just a few thousand dollars.
In fact, if you asked me, I think having a lot of money to start a business is a curse sometimes. You know why? Because when you have got a lot of money, you tend to spend it. In fact, out of all my businesses, the only business which I truly invested a lot of money in was my interior design business. I invested a quarter million dollars only to lose it in a year.
The strategy is that when you’ve got no money in starting a business, it forces you to be creative; it forces you to think of ways to do things without needing money. And when I started, all the costs were kept variable. We didn’t rent our own place. We couldn’t afford it, so we worked out of our house and other people’s company.
When we had no business, we have no costs and all the costs were variable and most of the staff we hired were freelancers or interns or people we paid on a project basis so all the costs were variable. There were no risks at all. A lot of the stuff we use were our own personal computers so again there was no costs at all.
Therefore sometimes it requires a willingness to learn as well as thinking out of the box. So hopefully these personal experiences will help answer the questions of those of you who are seeking to start your own business.
You’ll pay too much in taxes if you don’t understand that cash in minus cash out does not equal profit.
This is the most important thing you need to know before you start keeping records for your business…cash in minus cash out does not equal profit. It simply equals cash left over. Or, in many cases, it’s a negative number, so it equals cash you owe somebody.
What this means is that you’ll need to understand the IRS rules and keep your records according to those rules so you report your profit correctly and take (and be able to prove) all the deductions you’re allowed to take. Because you want to pay the least amount of tax possible, right?
The way you’ll need to keep your books will be different depending on whether your business is a sole proprietorship, a partnership or a corporation. The rules for calculating income and deductions (and therefore profit) and the forms used for reporting to the IRS are different for the different business types.
What counts as income? Most or all of the money you take into your business will count as income. This includes fees for services and/or product sales.
But not all the cash that comes into your business counts as income.
If you get a rebate for a purchase you made at your local office supply store, that’s cash in, but it’s not income. It’s a reduction in your supplies expense.
If you get a refund of part of your insurance premium at the end of the year, that’s cash in, but it’s not income. It’s a reduction in insurance expense.
If you borrow money (and it doesn’t matter if it’s from your brother or the bank), that’s cash in, but it doesn’t count as income.
What counts as expenses? Most of the money you spend for your business will probably count as expenses. This includes advertising, postage, office supplies, and similar items.
But not all the cash that goes out of your business counts as expenses.
When you buy business property like cars, computers, and furniture that will last longer than a year, you’re not allowed to deduct their entire cost as an expense in the year of purchase (except in special circumstances).
These items are called capital assets. Sometimes they’re referred to as fixed assets.
You have to depreciate them over several years. Basically, depreciation is a process of spreading the cost of an item over its useful life.
You might have cash of several hundred or thousands of dollars go out the door when you purchase fixed assets, but you can’t deduct the entire amount of the purchase price as an expense when you buy them.
Some things that your business pays for might only count as partial expenses. An example of that is business meals and entertainment where you can only deduct half of the cost.
That doesn’t mean that your business can’t pay for 100 % of the cost, but only that you’re limited in the amount of the tax deduction you can take. This is another example of cash out that doesn’t translate directly to expenses.
Some things your business pays for might not be tax deductible at all.
An example of this would be a contribution to a Political Action Committee. That doesn’t mean that the business can’t pay for it, just that it’s not a deductible expense on your tax return.
Some more examples of cash that goes out the door that doesn’t count as expenses are: draws for sole proprietors and distributions for partners or S corporation shareholders.
There’s also one type of expense that can be more than the amount of cash that the business actually spends. It’s the home office deduction that some sole proprietors can take.
So you see why it’s so important to understand that cash in minus cash out does not equal profit.
Unfortunately, the IRS rules and regulations don’t always make logical sense; they might seem complicated and unfair. One thing is certain. They are the way they are, so we have to deal with them. Learn what you can. And get help when you need it.
Sheryl Schuff, CPA, is a Certified Public Accountant, author, and consultant who teaches entrepreneurs how to get their businesses organized, keep good accounting records, and maximize their business tax deductions. She is President of Schuff & Associates, PC and has been in private practice for over 30 years. She recently started an information products company www.TaxesForSmallBusiness.com to provide individual training materials for small business owners.
Categories
5 Business Plans Help
The Closet Entrepreneur: You can use any word-processor to create your business plan, yet the urban sprawl of text that results after your second or third page is enough to render the plan useless. Your business plan is supposed to be a tool that effortlessly tracks the tasks and details of your business, yet word-processors create page after page of static text which makes accessing, organizing, and updating the different sections of your business plan slow and cumbersome. Of course you could always add bookmarks, hyperlinks, and a table of contents to access the sections, yet even these items require extra work.
Finding A Better Solution
The first thing that can make your business plan more useful is separating the various sections by tabs. For example, you can create a separate tab for your vision, branding, to-dos, advertising, financials, et cetera. This way, instead of digging through several pages to find the section you’re looking for, you simply click that section’s tab.
The second thing that can make your plan more useful is the ability to prioritize specific items and reorganize sections on a page – in essence, the ability to create your own to-do and task lists.
Last but not least, being able to collaborate with business partners is a bonus as well as being able to send a Word or PDF version to a VC, Angel Investor, or Bank.
By the way, fans of GTD are probably already using something that does all these things so please feel free to share any recommended apps in the comments!
Five Applications That Will Make Your Business Plan More Useful
Taking the aforementioned wish list into account, here’s a list of readily available applications that make your business plan more useful.
1) Microsoft OneNote
2) Microsoft Word for Mac
3) 37signals’ Backpack
4) Google Notebook
5) PlanHQ
5 Apps That Make Your Business Plan More Useful [The Closet Entrepreneur]
When most small business owners think about taxes, they think about Federal income taxes. But there are other taxes that I want to let you know about, so you’re not surprised if you have to pay them.
The first is self-employment tax. If you’ve ever worked for someone else, you know that social security and Medicare taxes get deducted from your paycheck. When you’re self-employed, you don’t actually get a paycheck.
Here’s what happens if you’re a sole proprietor. Following the IRS rules and regulations for calculating income and expense, you report your results for the year on your personal 1040 by filling out Schedule C.
Then you take the net profit and put it on Schedule SE for self-employment tax. After a small deduction, you calculate 15.3 % as your self-employment tax. This is double the rate of 7.65 % that’s deducted from employee paychecks because as a sole proprietor you’re both the employer and the employee so you have to pay both parts.
You get to take half of the amount of self employment tax as a deduction from your income on the front of your 1040. This has the effect of reducing your taxable income.
The self employment tax itself goes on the back of the 1040 in the section called Other Taxes on the line that says self employment tax. For the 2006 filing year that was line 58. This tax gets added to your Federal income tax and any other taxes you owe and is paid when you file your 1040.
If you (and/or your spouse on a joint return) have had Federal income tax withheld during the year that adds up to more than your total taxes for the year (which includes self employment tax), you’ll still qualify for a refund.
If your business is operated as a corporation AND you’re active in your business, you should receive W-2 wages and you won’t be subject to self employment tax on your earnings. Distributions from S corporations are generally not subject to self employment taxes.
If your business is operated as a partnership, you might have some items of income that are subject to self employment tax and some that are not. These items will be reported to you on a schedule K-1 that is part of the business tax return.
Sales tax
Many States have sales taxes. If you sell products to customers, you’ll have to charge them sales tax and pay it to the State. In some cases, digital downloads are considered products as far as the sales tax rules are concerned and certain services might also subject to sales tax. In Indiana, where I live, the rules are put out by the Indiana Department of Revenue. There will be a similar agency in your state who you can contact to find out the rules.
Local Taxes
Some cities and school districts have local taxes that you might have to pay. Some of these depend on your type of business. There might be additional sales taxes, property taxes, innkeeper’s taxes, or food and beverage taxes. Check with the authorities in your area for details.
And then there’s the often dreaded Estimated Taxes
This is a subject that confuses many people.
First, let’s try to understand the reason that the estimated payment system exists. Our system of Federal taxes is a “pay as you go” system. When you think about it, that makes sense. The government needs money all year long to pay for various things.
When you work for someone else, taxes are withheld from your paycheck each pay period, so the government gets its money over the course of the year. If you’re a sole proprietor, this doesn’t happen, so you’re expected to make estimated payments.
As with many IRS rules, there are some exceptions, and some penalties if you don’t pay enough or pay on time. There are some cases where you might not be required to make estimated payments (and you won’t have a penalty if you don’t), but it would still make sense to make them anyway, to avoid having to pay a large amount on April 15th.
If you have another job in addition to your self-employment, you can increase your Federal withholding on that job to cover the amount of the estimated taxes that you would otherwise have to pay. And if you’re married and file a joint return and your spouse has wages from another job, he/she can have additional Federal withholding taken out to cover the estimated payments.
Or, you can make quarterly payments using Form 1040-ES. You can also sign up to make the payments on-line. You might also need to make estimated payments towards your State taxes.
Payroll
If you have employees, you’ll need to pay various Federal, State, and local payroll taxes. But we’ll have to save that conversation for another time.
The most important thing you need to understand is that it’s your responsibility to find out what taxes your business has to pay. And that the laws vary from place to place and by type of business.
A good source of information is an accountant who specializes in consulting with small businesses.
Sheryl Schuff, CPA, is a Certified Public Accountant, author, and consultant who teaches entrepreneurs how to get their businesses organized, keep good accounting records, and maximize their business tax deductions. She is President of Schuff & Associates, PC and has been in private practice for over 30 years. She recently started an information products company www.TaxesForSmallBusiness.com to provide individual training materials for small business owners.