This guest post was written by Josh Bauerle, Founder of CPA On Fire.
Ready to hire a virtual assistant?
There is a breaking point for almost every successful entrepreneur. You started out on your own and planned to stay that way as long as possible. But as your business continues to grow, you reach a point when you can no longer avoid it.
It’s time to hire help.
For many entrepreneurs, hiring other people and bringing them into their business as actual employees is a terrifying thought. They would love the help, but there is no way they can afford the payroll taxes, insurance premiums and benefits that come with having employees.
Luckily, there are other options for hiring help and avoiding the additional expenses involved.
Independent Contractors (or virtual assistants)
If you can afford to hire traditional employees, then it seems like it would be the way to go. With an employee, you have total control over where, when and how they do their work. In addition, an employee has a set schedule for when they will and won’t work.
But if you can’t afford the additional expenses that come with hiring an employee, then hiring independent contractors, (or virtual assistants), may be a way to avoid those additional expenses while still meeting your hiring needs. Let’s concentrate on independent contractors for now, and I’ll dive into virtual assistants in just a bit.
An independent contractor is like a traditional employee, except you have less “hands on” control over where, when and how they do the work you give them. You give the contractor a job or project to do, and they decide how and when it will get done (unless you’ve agreed upon a different arrangement).
In exchange for giving up that total hands on control, you are not required to pay any payroll taxes, additional insurance premiums or benefits.
For example, if you have a construction business and need some dry walling done, you have two choices:
- You can hire an employee who works under you and you can tell them when and how to do the dry wall work, or
- You can hire an independent contractor to complete the dry walling, and they will decide how and when to get it done (you can still give them a deadline to have it done by, you just can’t dictate the exact hours they work).
Playing by the Rules
Because independent contractors are so much less expensive to hire than traditional employees, it is a frequently abused area. Labeling someone who is actually an employee as an independent contractor can come with major penalties from the IRS.
Here are some guidelines to make sure you are hiring an independent contractor and not an employee:
- No benefits are provided other than pay (no insurance or retirement benefits);
- An independent contractor typically works on a project basis, whereas an employee works under a long-term contract;
- An independent contractor typically sets their own schedule, uses their own tools and equipment and does the job with minimal supervision.
On top of following these guidelines, you must also issue a form 1099 by January 31 to every independent contractor you paid at least $600 to in the previous calendar year.
If you follow the rules and guidelines involved, independent contractors can be a great way to solve your hiring needs while savings thousands of dollars in taxes, insurance and benefits.
More on Virtual Assistants
As the Internet and other new technology continues to breed more and more “location independent” entrepreneurs, a new type of independent contractor, the virtual assistant, is becoming more and more popular.
Virtual assistants are independent contractors who operate from their own home or office and typically work on a project basis for small to mid-size entrepreneurs. They are hired to perform specific tasks remotely and can be used regardless of where you (or they) are located.
Sound like something that could drastically improve your efficiency and help you better leverage your time?
I thought so! Here are some common tasks entrepreneurs hire virtual assistants for:
- Social Media– We all know how important having a social presence is on the Internet these days. But we also know how much of a time commitment it can be if we want to “be everywhere”.
Virtual assistants are a great way to manage an efficient and effective social media presence. You can have your virtual assistant schedule posts for you, do research on different or new platforms to see if it’s worth your time to try something new, or just monitor your social profiles to be sure you’re staying up to date.
- Bookkeeping- As a CPA, this is my personal favorite!
Bookkeeping is a weakness of many small business owners. By hiring a virtual assistant to do this for you, you will have a better idea of where your business stands financially at any given time. It will also make your taxes much easier and cheaper to complete.
Hiring a virtual assistant you can trust can be tough. Letting someone into the depths of your business – and your finances – is a risk. However, there are plenty of companies out there who can help you vet virtual assistants or give you specific recommendations from previous assistants they’ve used.
- Data Entry- One of the most popular uses of a virtual assistant is for the constant data entry tasks most entrepreneurs have.
This might also include keeping track of your social media stats, website visitors, and other metrics that you use to measure your projects and/or business goals.
- Managing Email- For those feeling overwhelmed by their inbox, you can hire a virtual assistant to sort your email and respond to them when appropriate.
If you’re not comfortable having your virtual assistant respond directly to your emails, you can always have them just sort your emails into categories to make it easier for you to go through when you have the time. Several entrepreneurs create FAQ’s for their virtual assistants so that at the very least they can respond quickly to simple questions or inquiries that don’t require you to craft a special answer.
- Scheduling- A virtual assistant can be a great tool for managing your calendar and scheduling your travel, interviews, business lunches, etc.
- Securing New Business- For entrepreneurs who require a lot of cold or warm calling of potential clients, as well as follow-up calls and monthly or yearly check-ins, virtual assistants can complete these tasks for you and free up your time to speak only with the people who are interested in your product or services.
If your business doesn’t require this type of cold calling or follow-up, then you can also utilize your virtual assistant to do any type of research you need – maybe pertaining to conferences that you’re thinking about attending, sponsors you want to pitch, or speaking gigs you might be interested in.
While these are some of the most common uses of virtual assistants, the potential ways you can utilize their skills are endless. By keeping their work within the guidelines of independent contractors, you can have several of your daily tasks taken care of virtually, all while avoiding the expenses of traditional employees.
There are several places you can go to find independent contractors and virtual assistants without ever leaving the comfort of your own home. With software like Google Hangouts and Skype, you can even interview them face-to-face to be sure they’re the perfect fit for your business needs.
Here are some recommended resources to get you started down the right path:
Chris Ducker’s Virtual Staff Finder
Virtual Staff Finder is the #1 provider of dedicated, experienced, offshore virtual assistants. Start leveraging your time more effectively to free up more time to concentrate on your business instead of in your business. Chris’s website has a wealth of information to help you learn more about virtual assistants and how you can benefit from hiring one today (affiliate link above).
Further reading from Chris: Outsourcing 101: Tasks You Can Outsource to a Virtual Assistant
Elance offers an incredible pool of freelancers – over 2 million to be exact – from all over the world who can help you get the job done. Whether you’re looking for a web developer, mobile programmer, designer, writer or translator, eLance has a pool of candidates waiting for you.
With services starting at just $5 a pop, you really can’t beat the price. This site is great for entrepreneurs who don’t have a lot of cash to spend, but need help with graphics, translations, programming, and other advertising-related projects. Oftentimes you get what you pay for, but there are many hidden gems over at Fiverr.
oDesk is very similar to Elance in that they offer an online pool of qualified freelancers who are able to fill multiple roles, including designers, WordPress experts, writers and much more. You can search by both category and skill, making it easier to find exactly what you’re looking for.
What’s been your experience with hiring employees, independent contractors and virtual assistants? Share with us in the comments section below!
This post was written by Josh Bauerle. Josh is a CPA and the Founder of CPA On Fire, which specializes in providing tax and accounting services for small business owners.