What’s More Cost Effective for You as a Business Owner?
So, you’ve decided you need help in your business and are thinking of taking on an employee. But are you aware of the cost involved in being an employer and how much you could save by using a freelance Virtual Assistant instead?
What Is a Virtual Assistant?
Before I even get in to the cost comparison I’m going to briefly touch on what a Virtual Assistant (VA for short) actually is. You see all too often when people ask what I do their response is “a virtual what”? Which is quite funny although it does point out to me a lot of people don’t yet know about this profession and in turn are missing out. Hence my inspiration to pull this blog post together.
In a nutshell, a Virtual Assistant is generally self-employed and provides professional administrative, technical, or creative assistance to clients remotely from a home office. A professional Virtual Assistant will have a Personal Assistant, Executive Assistant or higher-level administration background, so come packaged with the skills you need for your business.
First Let’s Look at Saving Money
Hiring a Virtual Assistant is very different to employing a Personal Assistant for many reasons. First of all, we work virtually so you don’t have to spend money on desk space, computer equipment, mobile phones or stationary as we come packaged with those tools. Secondly while a Virtual Assistant works with you they also have other clients and whilst they are working with other clients they are not billing you. Online Employee Cost calculators usually allow 10 minutes per hour for wasted / unproductive time in the workplace. There is never any wasted time with a Virtual Assistant as you only pay when they are on task.
If you were to employ a Personal Assistant, even on a part time basis you will be required to operate payroll, pay Employers National Insurance Contributions (NICS), pension contributions, statutory sick pay and report on PAYE matters to HMRC. On top of that there may be recruitment costs, training costs, software licenses, mobile phone costs and healthcare. None of these are payable when you work with a Virtual Assistant.
Below are the basic costs of hiring an in-house employee versus a Virtual Assistant.
|Hours Per Week||15||15*|
|Computer and IT Support||£500||£0.00|
|Share of General Overheads||£500||£0.00|
*Minimum contribution as of November 2107
** For illustrative purposes only. In reality, you will use a VA for far less hours.
These calculations don’t take in to account holiday pay (12 days), sick days (2.9 days) or wasted / unproductive time which would equate to 38 days per year on the above illustration. (surveys have found that more than one third of time is wasted, 38 days is based on allowing 10 mins per working hour.)
Take all this in to account and the employee who has a salary of £15,600 actually costs you almost £28,000.
If we talk in terms of monthly cost. A Personal Assistant will cost £2,333.00 and a Virtual Assistant will cost £ 1,437.00
That equates to a Virtual Assistant saving you a whopping £896.00 per month over employing a Personal Assistant.
By only paying for the time you need a VA with none of the associated employee and employer costs, you can see that a VA will save your company money.
Now let’s look at making money
If you charge by the hour, for example a coach, then all the time you spend on admin you’re not seeing clients and when you’re not with your clients you’re not earning.
Delegate a task to a Virtual Assistant, however, and you are free to make money.
For example, let’s say you charge £65 per hour for a coaching session. If you pay a Virtual Assistant £25 an hour to sort out your admin, schedule social media posts, or email marketing, rather than doing it yourself, you are free then to earn that £65. After costs, you have made £40. That’s £40 more than if you spent that time doing your own admin.
Doing your admin is not your key expertise but it is a Virtual Assistant’s. You probably didn’t start your business to spend 15 hours a week writing blogs, raising invoices and managing Facebook.
You won’t require a Virtual Assistant all day, every day. You can just utilise a Virtual Assistant’s services and experience as and when you need; most are happy to do ad hoc projects in addition to the work from their retainer clients.
So, a Virtual Assistant is an investment in your business, helping you to make more money and enabling your business to grow.
Thanks for reading.