In organizing my financial information, I noticed some really important things. We all know it’s good to keep your overhead as low as is practicable. I was glad to see that while I had a number of expenses, my ongoing monthly expenses are quite minimal. I started my virtual legal assistant business with a goal of being quite frugal. My main recurring expenses include things like my internet, my phone, my webhosting and domain renewals, and my project management application. Altogether these expenses come under $200 per month, which allows me a great deal of flexibility in how I operate. I am free to only take on appropriate clients and I don’t force them to commit to retainer plans. I want them to be able to keep their absolute expenses low too!

Low overhead is precisely one of the main benefits to using offsite contract staff, whether you are talking about a virtual legal assistant or paralegal, an accountant or any similar service provider.  For example, when my clients work with me, they are able to engage my services to any extent necessary, whether that is for one small project in a month or for some dictation almost every single day. When they go on vacation and don’t need any assistance, they don’t pay for it. If they go on vacation and want someone to check their email, they can have that too! It is completely flexible and up to the client to utilize the services to match their needs.

Of course every small business owner, from lawyer to virtual assistant, will have different needs for their overhead. They may absolutely need to operate out of an actual office space or they may be able to work from Starbucks. They may need full-time or part-time help in some capacity or they be able to work with just occasional support from other service providers. The key is to know what things are truly necessary and work within the most appropriate but cost-effective structure that you can, if you want to maintain maximum control and flexibility over your work environment, instead of feeling like a slave to your own business.

Clients

I’ve been in business for approximately 9 months. I still am nowhere near full-time billable hours – and billable hours are the key, as you aren’t being paid for all that marketing time!! You may already have leads on clients, but in all likelihood you need to give yourself at least 6-12 months to really build up a decent clientele.

Also in relation to clients, you need to realize that funds will take time to start flowing. You may choose to invoice on a weekly basis to have some cash in hand, but many virtual legal assistants bill on a monthly business.  Once you send out the invoice it may take a week or two to receive funds.

Startup Expenses

You will always have some expenses, but never quite so much as at startup. You may need to invest in equipment like a good computer, a printer or a scanner. You will want to consider adding specialty software like accounting software or graphic design programs. Then there is the cost of your website, hosting and the design of a logo or marketing materials. For some more detailed info about start-up costs for a virtual assistant business check out this article I wrote for Virtual Assistant Hub – there’s even a spreadsheet to help you plan!

Money in the Meantime

Once you’ve spent some time planning how much money you need to start your business you’ll want to spend some time planning where you are going to get that money. Maybe you have personal savings you can access, maybe you have family willing to loan or invest in your business, maybe you can talk to your bank about a small business loan. According to this article, lack of sufficient start-up capital is the cause of more than 70% of business failures.  Even if you have a supportive spouse, family or friends to back you financially, you will need to keep a close eye on your income versus your expenses, to make sure your new venture does not become a money-sucking pit.

It is wonderful to have a positive attitude and a strong belief in your ability to succeed when you embark on the adventure of entrepreneurship, but don’t let financial issues drag you into reality. Be prepared and know exactly what it’s going to take to help you truly succeed in building your business!

p.s. this post was inspired by a great article at Law Practice Today written by Erik Mazzone. His tips are well worth checking out, especially if you’re starting a law practice. Erik is an experienced practice management advisor who blogs over at Law Practice Matters.