Running a VA business isn’t cheap and cheerful – you need so much more than just a computer and a WIFI connection to work effectively, and there are a number of costs involved in the day-to-day running of a successful and professional VA business, including:
Insurance – it might be that you require Public Liability Insurance, Professional Indemnity Insurance, Cyber Insurance, Income Protection Insurance, etc. so seek advice from an insurance broker to determine exactly what you require in order to work safely. This may seem costly at first glance but is significantly cheaper than paying out legal fees or replacing damaged or stolen equipment!
Tax, NI and Pension Contributions – as a self-employed individual, you are responsible for paying these from your business income, so make sure that you set aside an appropriate portion of the money that comes into your business so that you aren’t faced with an unexpected (and/or large!) tax bill at the end of the financial year.
ICO/AML registrations, etc. – if you handle or process data, registering with the Information Commissioner’s Office is highly recommended; similarly, some VAs who carry out bookkeeping work need to register for HMRC’s Anti-Money Laundering Regulations. If you are unsure whether you need to apply, seek advice directly from ICO or HMRC.
Hardware/Software costs – for the vast majority of VAs, work would be impossible without computers and mobile phones as well as a whole host of software programmes that either require an annual or monthly subscription. These can soon add up, so make sure that if you are contemplating adding a new service to your business that you know the full financial cost that this would have on your business.
Professional Memberships – many professionals from a range of sectors decide to join an industry-specific organisation to gain access to advice, training and a support network of like-minded individuals. This is an acceptable business expense and doesn’t need to come out of your personal purse.
Marketing – membership to networking groups, website and hosting costs, and promotional materials for your business are all necessary when you are trying to share the details of your business with potential customers and need to make a good first impression! You don’t have to spend hundreds of pounds for this to be effective though – try out different marketing approaches for your business and see what works the best before investing heavily in anything.
Training – a VA is only as good as their knowledge and experience! Keeping up to date with software developments, and undertaking professionally accredited training in certain topics can really help to ensure that you are a VA who is at the top of their game in their field and is a knowledge leader! Comprehensive knowledge of software or particular programmes can really help ensure that customers are satisfied with the work that you carry out and that you are able to complete work quickly, efficiently and to a high standard.
Utility Bills – if you work from home, don’t forget that your utility bills are likely to increase; you might need faster and more reliable broadband or need a dedicated work telephone number for customer enquiries. Gas, electricity and water may also increase if you are working from home rather than working in an office.
Last year, we compiled a graphic that compared the most common hourly rate charged by VAs (as recorded in our 2017 Members Survey and again in our 2018 ‘Time to EleVAte’ survey) to the necessary business expenses that most VAs have, and determined that if a VA charged an hourly rate of £25 then they would only be taking home approximately £18 of that after expenses. As you can see, it’s not cheap running a professional and reputable company, but the rewards (not just financial, but personal and professional) can be significant!