Tip #4: Think about your budget.

This involved three steps for me:
1. Expenses
2. Income
3. “Float” time

Expenses:
Based on what we talked about in Tip #3 regarding proper equipment and work environment, what expenses are you going to have to set up your business? Also, remember that you’re going to have to pay your own taxes (self-employed) and insurance (I discuss this more in the next section). Once you arrive at the setup estimate, then you move onto thinking about income.

To start my business, I cashed in one of my ROTH IRAs. It was worth about $2500. I already had a good computer system…so that really helped. But, I had to purchase a laser printer (I ended up getting a really nice one that is a printer, copier, scanner). I also had to create a better home office/working environment...the folding card table that my computer was sitting on just wouldn’t do the job!

I’m a really organized person, so I needed a work station that felt like “work” to me. And so I had that built (very inexpensive build). I also purchased 2 file cabinets and some other organization tools and office supplies. ***Remember, as a VA (self-employed), you’re allowed to write off these items. That’s HUGE!*** We’re getting to the tax aspect in just a minute…I just couldn’t wait to tell you that.

Now, onto income…

Income:
How much do you need to make each year to make this work? As I told you earlier, I started my VA business (laid the groundwork) before I actually quit my steady paycheck job. I’m not a big risk taker…so that was more comfortable for me. I’m also married, so I had my husband’s income and insurance as “back up.”

At any rate, according to the Alliance for Virtual Businesses, the average VA made $39,452 in 2003. Remember, though, your first year may not be that much. Is this truly do-able for you and your family? You also need to keep in mind taxes, insurance, etc…that’s all your responsibility now…(we’re getting to that topic in just a minute.).

“Float” time:
Do you have any money in savings to tide you over until your business really kicks into gear? To be honest with you, we didn’t have much. That’s why I worked nights and weekends laying the groundwork and starting my VA business. You have to realize that the start-up phase is not easy…you get discouraged…not much money is coming in…you feel overwhelmed.

REALISTICALLY, how long can you “float” until things get up and running? If your answer is one or two months, you need to re-think this. Try doing what I did…do your research, lay the groundwork, start marketing and obtaining clients…before you quit your steady paycheck job. There will then come a point where you’ll just take the plunge and go full-time into your VA business and say BYE-BYE to your commute and your boss…and HELLO to your own business and your family!