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Accounting for Service Fees

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As you know I am laser focused on building my virtual assistant consulting business. Today I am here with a question for the BAD community about the service fees I incur.

Little Background

When I began twelve years ago, I was able to build my business using to primary methods.

First, I advertised in local business focused magazines and newspapers. My first client found me through a newspaper that came to his wife’s law office. He ended up hiring me as customer service for one company and tech support for another.

Second, I applied for project based jobs on Guru.com. This is how my longest running client found me. I started as a part time marketing assistant and moved up to customer service and product manager over 10 years with them.

guru logo

Now Today

I thought as I began to focus on rebuilding my consulting business that I could go about things in a similar manner. But time has changed things a bit. Virtual Assistant is now a common term. And I am competing with a worldwide workforce.

Tim Ferris’ book Four Hour Work Week brought using an international workforce to the forefront. Highlighting the opportunity to hire a quality, low cost support staff. It made competition in the virtual assistant world fierce.

My Question: Service Fees

As a result of all of this, I am changing direction. Or at least the platform and proposals I am using.

I am now focusing on Upwork.com and taking advantage of their detailed filter options for finding work. I specifically like the option to limit your search results to projects seeking US Based Workers only. This is huge for my particular industry.

upwork logo
In addition to the standard price, time frame and keywords, you can limit search results by skill level sought and number of proposals already submitted and more.

Here’s my question: each of these platforms charges a service fee to the contractor.

The service fee comes out of the contractors pay depending on what level of membership the contractor has. I am charged 8.95% of any pay on Guru and 20% for the first $500 earned per client and 10% up to $10,000 with a client on Upwork.

How do you account for the service fee when it comes to tax time?

 


New Client – Starting Today

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I share on Tuesday that I finally settled on a course of work. I’m moving forward with laser focus on building my clientele for my consulting business again.

Today I start with my second new client. (I’m enjoying the part time job I started a few weeks ago.) Between the two clients, I have now committed to approximately 30 hours a week. All from home! I am so grateful.

In addition, I have been hired to do a redesign of a flooring company’s website. Woot, woot! Things are turning around and this time, I am not compromising my kids, my integrity or my dreams.

New Business, New Attitude

Between the book, Your Money or Your Life, our lower cost of living in this small town and my resolution to not give up my dreams again, I am in a better place mentally then I have been in a long time.

My financial goals have also evolved and are much more solid. In addition to a priority on paying off my debt, exemplified by my time here, and saving as I have been doing this past year, I also know that having ENOUGH is all I need.

Business Plan

I’ve got to buckle down and come up with my business goals now. But first, settling into a new work routine with my two new clients is the priority while getting the flooring website completed. I realize I have to find a way to scale up since my own hours are limited.

There is no local SCORE chapter here, although they are trying. I’m going to set up a meeting to get myself a mentor.  They say, two heads are better than one.

The name of the game is bootstrapping so I’m working on a new personal budget that will stop the quick drain of my savings while also giving me some money to put into the business.  My business cost priorities right now are to join the Chamber of Commerce ($190) and get some sort of marketing going locally.

With that being said, tell me what resources you would recommend as I find my new direction, looking into scaling my business which has been a one woman shop for 12 years and any tips or tricks you might have to starting over with a business.