How to Start a Virtual Assistant Business

In this digital age, more and more people are working remotely, without the support staff of an office setting. As a result, virtual assistants have emerged as a popular way for professionals to simplify scheduling, email management, travel reservations, and more, and the market is poised for rapid growth in the coming years.

You could start your own virtual assistant business and ride the digital wave to prosperity.

Starting a business will of course have its challenges, and doing your homework should be your first task. Fortunately, this step-by-step guide provides all the information and insight you’ll need to begin your entrepreneurial journey.

Step 1: Decide if the Business Is Right for You

Before we begin, it’s important to clarify that the virtual assistant described in this article is a human, not a digital or AI-powered, assistant. This human assistant is virtual in the sense that he or she is not in the same room as their employer, but rather communicating and performing tasks mainly via the internet. You might be in Omaha, for example, with clients in Brisbane and Brussels.

AI-powered virtual assistants that understand voice commands and can complete certain tasks do exist, but they remain incapable of a vast array of skills-based human tasks.

Pros and Cons

Starting a virtual assistant business has pros and cons that you should weigh before deciding if the business is right for you.

Virtual Assistant Industry trends

Demand for assistants with special skills, such as writing, marketing, graphic design, or social media expertise, has been on the rise. This presents an opportunity for the bold entrepreneur to start a more comprehensive virtual assistant service.

Industry size and growth

• Industry size and past growth – Hiring of virtual assistants in the US through offshore agencies increased 41% year-on-year in 2020 while VAs operating as solo contractors on Upwork and OnlineJobs.ph reported an increase in their workloads.((https://nanoglobals.com/virtual-assistant-industry-growth-statistics/))
• Growth forecast – Industry analyst Research and Markets expects the global virtual assistant market to expand by $4.1 billion by 2025, which reflects impressive 12% annual growth.((https://www.researchandmarkets.com/reports/5313650/global-virtual-assistant-market-2021-2025?utm_source=GNOM&utm_medium=PressRelease&utm_code=bvc3k2&utm_campaign=1528098+-+Global+Virtual+Assistant+Market+(2021+to+2025)+-+Featuring+Alphabet%2c+Amazon+and+Apple+Among+Others&utm_exec=jamu273prd))
• Number of people employed – There are around 2,500 virtual assistants in the US.

Trends and challenges

Here are a couple of trends in the fast growing VA market:

• More US companies are outsourcing work completed before by in-house administrative assistants
• The Philippines, second-tier US cities, and UK are cited as most common locations for hiring new talent

There are also challenges, as follows:

• Competition with VAs around the world
• Marketing spend needed to attract initial clients

Consumer spending

• Potential customer base – 70% of organizations have begun outsourcing to reduce costs, and many of these are outsourcing tasks of an administrative assistant, according to Deloitte’s 2020 survey.((https://www2.deloitte.com/us/en/pages/operations/articles/global-outsourcing-survey.html))
• Average prices – A VA gets paid $12 to $35 per hour in the US.((https://www.zippia.com/virtual-assistant-jobs/salary/))

Price differences across the country

• More expensive – VAs are paid highest in Connecticut, District of Columbia, and Massachusetts.
• Less expensive – The lowest salaries for VAs are in Arkansas, Montana and Utah.

What kind of people work as virtual assistants?

• Gender – 87.6% of them are women.((https://www.zippia.com/virtual-assistant-jobs/demographics/))
• Average level of education – 54% of VAs hold a bachelor’s degree and 22% hold an associate degree.((https://www.zippia.com/virtual-assistant-jobs/education/))
• Average age – 78% of VAs are over 40 years old.((https://www.zippia.com/virtual-assistant-jobs/demographics/#age-statistics))

How much does it cost to start a virtual assistant business?

Startup costs for a virtual assistant business range from about $2,000 to $6,000. Expenses include website setup and a computer. If you can set up your own website, and you already have a computer, your costs will be even lower.

How much can you earn from a virtual assistant business?

Virtual assistants with specialized skills can charge up to $35 per hour, while those with fewer skills can expect an hourly rate of $12. Either way, your profit margin could be as high as 90%.

In your first year or two, you could work 40 hours per week at $35 per hour, bringing in over $70,000 in annual revenue. This would mean over $60,000 in profit, assuming that 90% margin. As your brand gains recognition, you could hire additional assistants. This would reduce your margin to around 40%. If your company has 200 billable hours per week, your expected annual revenue will be over $360,000, and you would make over $140,000.

What barriers to entry are there?

There are a few barriers to entry for a virtual assistant. Your biggest challenges will be:

• Competing with virtual assistants around the world 
• You’ll have to spend on marketing to attract initial clients

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Step 2: Hone Your Idea

Now that you know what’s involved in starting a virtual assistant business, it’s a good idea to hone your concept in preparation to enter a competitive market.

Why? Identify an opportunity

Research other virtual assistants to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a virtual assistant service that offers web design or speaks French.

You might consider targeting a niche market by specializing in a certain aspect of your industry in which you have skills.

This could jumpstart your word-of-mouth marketing and attract clients right away.

What? Determine your products or services

Your services will depend on your skills, or what skills you can acquire. Some ideas include:

• Graphic design
• Marketing
• Content writing
• Appointment scheduling
• Email management
• Sales calls
• Presentation development
• Project management
• Accounting

How much should you charge for virtual assistant services?

For basic services such as data entry, email management, or social media posts, you’ll likely get $20 per hour, depending on the location of your client.

For brand management, graphic design, and presentation development, you should be able to charge $35, while high-end services such as accounting and professional-level writing and editing could get you as much as $50 per hour.

Once you know your costs, use the Step By Step profit margin calculator to determine your price points.

Who? Identify your target market

Your target market will be executives and professionals around the world. The best place to find these people would be LinkedIn, as well as Upwork and Flexjobs.

Where? Choose your business premises

In the early stages, you may want to run your business from home to keep costs low, and you may choose to keep it that way, even after you hire other assistants. If you choose to rent out an office, you can find commercial space to rent in your area on Loopnet, Craigslist, Crexi, and Commercial Cafe.

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Business Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better
• The name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “assistant” or “virtual assistant”, boosts SEO
• Choose a name that allows for expansion: “Jim’s Bakery” over “Jim’s Cookies”
• Avoid location-based names that might hinder future expansion
• Use online tools like the Step by Step business name generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

• Executive Summary: Brief overview of the entire business plan; should be written after the plan is complete.
• Business Overview: Overview of the company, vision, mission, ownership, and corporate goals.
• Product and Services: Describe your offerings in detail.
• Market Analysis: Assess market trends such as variations in demand and prospects for growth, and do a SWOT analysis.
• Competitive Analysis: Analyze main competitors, assessing their strengths and weaknesses, and create a list of the advantages of your services.
• Sales and Marketing: Examine your companies’ unique selling propositions (USPs) and develop sales, marketing, and promotional strategies.
• Management Team: Overview of management team, detailing their roles and professional background, along with a corporate hierarchy.
• Operations Plan: Your company’s operational plan includes procurement, office location, key assets and equipment, and other logistical details.
• Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.
• Appendix: Include any additional financial or business-related documents.

If you’ve never created a business plan yourself before, it can be an intimidating task. Consider hiring an experienced business plan writer on Fiverr to create a professional business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to virtual assistant businesses.

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your virtual assistant business will shape your taxes, personal liability, and business registration requirements, so choose wisely.

Here are the five main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using ZenBusiness’s online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have. 

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist, and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method, but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Crowdfunding: Websites like Kickstarter and GoFundMe offer an increasingly popular low-risk option, in which donors fund an entrepreneur’s vision.
• Personal: Self-fund your business via your savings, the sale of property or other assets, and support from family and friends.

Step 8: Apply for Licenses/Permits

Starting a virtual assistant business requires obtaining a number of licenses and permits from local, state, and federal governments. Most states have a demanding hospital registration process that you must go through to become a licensed hospital. Check with your state for requirements. 

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your virtual assistant business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business.

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.

You can use industry-specific software, such as ClickUp, Adminja, or Monday, to manage your clients and workflow.

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero.
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Marketing

Some of your business will come from the casual online visitors, but still you should invest in marketing! Getting the word out is especially important for new businesses, as it’ll boost customer and brand awareness.

Once your website is up and running, link it to your social media accounts and vice versa. Social media is a great tool for promoting your business because you can create engaging posts that advertise your products:

• Facebook: Great platform for paid advertising, allows you to target specific demographics, like men under age 50 in the Cleveland area.
• Instagram: Same benefits as Facebook but with different target audiences.
• Website: SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales.

Kickstart Marketing

Take advantage of your website, social media presence and real-life activities to increase awareness of your offerings and build your brand. Some suggestions include:

• Competitions and giveaways – Generate interest by offering prizes for customers who complete a certain action, such as a free trial for one week.
• Optimize calls to action – Experiment with text, color, size, and position of calls to action such as “Contact Now”. This can sharply increase purchases.
• Signage – Put up eye-catching signage on your website
• Flyering – Distribute flyers in your neighborhood and at industry events

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.

You can create your own website using services like WordPress, Webflow, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your virtual assistant business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your virtual assistant business could be:

• Top virtual social media marketing at the best rates!
• We do it all virtually – from scheduling to accounting
• 24-hour on-call virtual assistance

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a virtual assistant business would include:

• Virtual Assistants – service clients
• General Manager – manage staff, accounting
• Marketing Lead – SEO strategies, social media, other marketing

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.

Step 13: Start Making Money!

A virtual assistant business allows you to work from home while making good money. Once you get rolling, it’s relatively easy to scale up and build a vast network of virtual assistants. You could soon be making enough to hire your own virtual assistant!

Now that you’ve got all the required knowledge, you’re ready to embark on your entrepreneurial journey into the world of virtual assistance.