Have you ever thought about running a service-based business online?
I have been working online since 2008—in my college days, as a freelance writer—but have only really gotten into the entrepreneur mindset last year. And boy, did it completely change me!
My business finally grossed its first million pesos (or around $20k), 11 months in. That means an average of $1,800 per month, putting me in as a six-figure business (in pesos).
If you are from the US or other first-world countries, this might not seem much. However, in the Philippines, this is already a huge sum. To put it in context, I was grossing less than ₱30,000 (~$550) as a junior software programmer, working for about three years.
Which leads us to today’s post…
WHAT EXACTLY DOES IT TAKE RUN A SEVEN-FIGURE BUSINESS?
Well, I can tell you, it is no easy feat.
I’ve had my share of ups and downs: financially, mentally and emotionally. In fact, just last month, I lost one of my highest-paying clients (to no fault other than my own), which resulted to my income dipping by half of the previous month.
Let’s take a quick look at my financials and take a deep dive into everything I’ve learned so far this past (almost a) year or so…
NOW BEFORE ANYTHING ELSE, YOU MIGHT BE ASKING: WHY AM I EVEN POSTING MY NUMBERS ONLINE?
I am a huge fan of income reports and after much deliberation and going back and forth about this decision, I’ve finally decided to cave in and share my numbers on a more regular basis from here on out.
Two main reasons:
- It keeps me accountable. Keeping track of your numbers regularly let’s you see how you’re doing and helps in figuring out which aspects you are good at and which ones need improvement.
- It inspires people. I know a lot of people who are just waiting for inspiration to get themselves from point A to point B. I know because I’ve been there, too, and I hope these posts are what propels you to move forward.
NOW LET’S GET ON TO BUSINESS…
What does it take to run a seven-figure business?
1. NOT EVERYTHING IS FROM MY OWN EFFORT
About four months after starting a virtual assistant business, I quickly learned that in order to maximize my time and energy, I had to eventually learn to outsource certain tasks, especially those that resulted in carpal tunnel syndrome (haha kidding).
I am thankful that I have reliable VA friends around whom I can message right away and assign tasks to when I run short of time or when I feel like my time is best spent somewhere else.
It is still a mindset I need to work on more, to be honest.
But the gist is this: if you earn $50 an hour but can assign your work to someone else for $25 and use that hour to work on something else, then you will have earned $75 for that hour. And even if you did use that extra hour to work on non-business related things, you will still have earned $25 in the process.
Currently, I am building my VA agency on Upwork and I have one VA under me and one part-time client with us.
2. DIVERSIFY YOUR INCOME
True, my income isn’t as diversified as I want it to be right now but I’m working on it.
The past few months has definitely got me thinking a lot. We went through two weeks of travel and an entire month of home renovations (with me single-handedly wrangling the kids + breastfeeding the baby) and I realized how hard it can be to have all your income rely on just your services.
As such, I’m adding more things under my belt including:
- honing in on my skills and niching down further, and raising my rates in the process
- growing my VA agency and adding more clients and more people into the team
- producing an ebook, a course and a coaching service for those who would like to learn to become a VA
- working on increasing my affiliate income (possibly doing other content marketing related projects)
3. IT TAKES MONEY TO MAKE MONEY
If you asked me to spend $1,200 on courses or $470 on software or say goodbye to $1,800 on fees, I’d have given you that look and walked away. (If you’re consider enrolling in freelance writing courses, check out this post.)
It’s surprising how much money I’ve spent on these things; most of the courses I purchased at the first quarter of this year which is crazy! This figure amounts to around two monthly paychecks from my corporate job.
But without it, I never would have grossed my first million.
One of the biggest benefits these things did for me was mindset. I enrolled in a VA course at the start of my business (October 2017) and within a day or so, I was able to close a contract which more than paid for the course fee. All because it helped me get the right mindset and because it provided me with the tools I needed to get past a client objection.
Some of the tools I heavily invest on include:
- Dubsado – this is a CRM which helps me manage leads, organize emails, send proposals, contracts and invoices, and automate the process (especially helpful for recurring payments)
- VA Leads via Horkey Handbook – this is a membership that provides me with solid leads for my business; it is worth the cost as my monthly fees resulted to contracts 10x more than I have paid them for the entire year
I also found myself upgrading to a brand new laptop about six months into my business. What’s amazing was that I chose it with *nearly* no max budget limit – I got what I wanted with the exact specs that I wanted.
Unfortunately for freelancers/service-based business owners in the Philippines, there is no way to get around exorbitant fees from job marketplaces and payment gateways.
I currently source my clients from Upwork apart from my direct clients, and get my payments through them or through PayPal.
The only way to win against Upwork would be to encourage repeat clients so you could lower fees from 20% to 10% to 5%, or to bring them outside the platform which is actually against their Terms of Service. PayPal also has cheaper alternatives such as Payoneer and Transferwise but they are unfortunately lesser known platforms.
You will just have to make sure that you have built in your fees into your rates so you still find yourself smiling after these platforms take their cut.
4. RUNNING A BUSINESS IS A CRAZY RIDE
Entrepreneurship is a crazy ride. It takes you on a crazy ride, emotionally and financially.
I’ve been keeping track of my freelancing/business cash flow for two years now (missed a few months though), and you can see how much it differs every month.
But, what’s worth noting are the orange bars, which was when I started to seriously regard my work as a business. It had drastically changed my finances and, while it’s still a rollercoaster, I did manage to get it upwards of $1,000, which was my main target (because this was how much the partner and I earned gross as employees back then).
5. TIME FREEDOM IS THE BEST BENEFIT
Another thing I monitored while running a business was my hours at work. I used Toggl and Upwork for this.
On Upwork, I was able to record 332 hours for all my hourly projects since October 2017 while Toggl gave me 540 hours, which is not really accurate as there are still times I’d forget to turn on my timer.
All in all, I’d say I’d have spent this much somewhere between 1,200-1,500 hours online from October 2017 – and this already includes the hours I work on my blog(s) and pitching and so on. That puts me to around 7 hours of work per day, 5 days per week, for the last 11 months. That means I probably earn around $13 per hour, counting my breaks and unproductive hours. Haha! (I really should track my time better to make it more accurate.)
Now this figures are still a lot, and I hope to reduce that to just 20-30 hours a week moving forward. Nevertheless, going from an average of USD3 per hour to USD13 per hour in one year is not bad, right?
6. IT ISN’T ALWAYS ABOUT THE MONEY
This was one of my biggest lessons last month.
I mentioned that I had a premium client who was with me on a four-digit retainer contract, which contributes to about half of my total income. And did I also mention that I actually lost four figures worth of projects in August as well? I had my first USD3k month in July but I dipped to half of that the next.
Which leads us to my point…
It isn’t always about the money.
True, you still have to set monetary goals, because that’s one of the ways you know you’re improving, right? Plus there are bills to pay so we all have to make sure this goals are met somehow.
But when running a business, the number one thing you need to work on is providing value to your clients. That, and nothing less.
Last month, I truly felt how indispensable we all can be – employee or business owner, it doesn’t matter. Which is why you need to make sure you continuously remind your clients about the value you are providing to their business. Perhaps you save them time, or you bring in more customers, or just save them from all the headache.
Don’t get me wrong, I do treat my clients right. I have clients who asked for help to set up their online summits, sales funnels, emails or manage their blogs, and I’ve spent way more time and effort than I should have. It was thoroughly enjoyable for me, and my clients were happy because of my efforts.
But there are instances when things fall through the cracks, such as when you feel overwhelmed because you have so much on your plate. I tend to procrastinate even more during these times, and burn out was real.
During the last week of August and early September, I decided to lessen my workload and let go of about half of the clients I had. I also had to let go of my first VA client, because I have outgrown the rates I work for him and I was no longer providing value to him or his business. It was heartbreaking.
But, surprisingly, I felt much more relaxed these past few days because there were fewer clients and fewer deadlines to worry about, but I still somehow got the monetary goal I was aiming for.
7. IMPOSTOR SYNDROME IS REAL
Aside from being overwhelmed with work, comparison-itis also got the better of me last month.
It isn’t cool.
It stuns you and freezes you and keeps you from becoming productive. I did a Facebook Live about this, too.
Sometimes, you’re worst enemy is yourself and the moment you try to compare yourself to other people, you sabotage your success. Why should you do that?
The partner had to constantly remind me this: if I really had to compare, then I better compare it with my old self.
You can’t compare your Year 1 to someone else’s Year 5. They’re entirely different. And people have different timelines – what’s working for them at the moment may not work for you, no matter how hard you try.
So I’ve promised myself to instead work on myself by reading more books, so my skills are continuously upgraded.
Before writing this post, I was working on a personal project and had to pause multiple times before moving on to another section of work – because then I’d pause and search for stuff and start comparing my work to other people’s again.
So, I decided I will simplify things, get them done and stop trying to get everything perfect.
DONE IS BETTER THAN PERFECT.
Plus you get so much more done if you just work on really getting it done. You can always improve later, anyway.
8. THERE’S ALWAYS ROOM FOR IMPROVEMENT
Despite the successes (and failures) that I went through the past 11 months, there will always be room for improvement.
Maybe it’s your communication with your clients.
Maybe it’s your output.
Maybe it’s your pitches and proposals.
Maybe it’s your onboarding process or your work process.
THERE WILL ALWAYS BE SOMEWHERE IN YOUR BUSINESS THAT NEEDS TO BE IMPROVED.
I’ve been working hard on communication, and have also been reading on a lot of books to improve my email marketing and sales funnels game.
In fact, I’m pretty excited to work on these strategies on my own business as well as on my current and future clients’ businesses.
OVER TO YOU…
Perhaps you’ve already considered running a service-based business and overhauling your packages and services?
Are you a business owner? What have you learned from running it so far?
If you’re still on the fence, what hesitations do you have about running an online business?
PS. I’m in the works of putting together an online course on freelancing and running a VA business – if you have topics or questions in mind, let me know in the comments!