Emily LaRusch is the CEO and founder of Back Office Betties, a company that provides virtual receptionists to act as the voices of small businesses across the U.S. and Canada. Her team answers phones for clients, schedules appointments, and responds to frequently asked questions so business owners can focus on the work that generates income for their company. LaRusch says her background with process creation and improvement has been her biggest strength and contribution to the success of virtual assistant startup Back Office Betties.
Why did you start your business?
My background has always been in real estate and mortgage lending. I always worked on the IT side of things, so I’m more technically minded. No matter what job I’ve had, even when underwriting a mortgage, I’ve always been drawn to process reengineering and trying to find ways to make processes more simple and more effective. That has really played into this business. I was working on a very big IT project and didn’t have a lot of free time, but I needed services for my home. Nobody was answering the phones, and I thought I could make a business of that – answering the phones for business owners to help them capture business and better represent themselves.
How did you get the funds to get going?
I was laid off from my company. I took the severance from that and cashed out my retirement funds. I asked my family to contribute to get things off the ground. I thought I was set with about $30,000. But we had a big loss our first year. Starting the business cost three times the amount I thought it would. Everyone says things are going to cost more than you anticipate, but I just had no idea how grossly I was underestimating things.
I did end up having to take out a loan to help carry us through. Unfortunately, being new in business, unless you have cross-collateral like a home with equity in it, nobody will fund a new business, at least not mine. Getting a business loan has been out of the question, even to this day, my second year in business. The banks want to see two years of positive tax returns. They want to see you trending to grow over those two years. Being a new business, you’re not going to have that. I had to take the loan out personally. If you don’t have good personal credit, there’s just nothing out there.
Have you heard of business credit?
Yes, but I don’t have business credit. I’ve gotten the same story from every banker I’ve talked to, “You don’t have positive tax returns. Your tax returns show that you took a loss. So, we’re not going to give you a dime of credit in the business name unless it’s backed by you personally.” All of my credit cards are in my own name.
Managing the Business
What’s most challenging about running your business?
Definitely managing the people. Particularly for me, hiring quality people has been my biggest struggle.
How do you finance your business to manage cash flow or growth?
I stay on top of my bookkeeping. Our cash flow is so tight, I have to penny pinch. Every week, I’m looking at reports on hours worked. Even though we have set schedules, things happen, people run over and get overtime. We have a budget for the amount of hours that can be worked within a pay period. I have to make sure we are within our hours-worked budget and that we’re staying on track, because that is our biggest expense.
Do you use trade credit from your vendors or suppliers?
No, unfortunately we don’t have any large vendors that we would do that with.
What’s the biggest mistake you made in your first year?
One of my biggest mistakes was losing one of my best team members because I failed to heed the warning signs that she was giving me when she said, “I’m not a multi-tasker, I can’t do things like this.” I kept telling her, “Well, you’re in a startup business. We’re a small company and you’re going to have to wear more than one hat.” I didn’t take into consideration that some people are just not wired that way.
I need to look at each person’s skill set. If I really have someone that’s high quality at one skill, I need to accept that I can’t force more than that on them. It’s a take it or leave it, and I should have taken it. I should have taken the hit, because I lost a very high-quality person because I didn’t listen.
What’s the smartest thing you did in your first year?
The best decision I made for the business was reaching out to some folks who had written blogs about other companies in our industry, some of which are really big players. I ended up having one write about us, comparing us to a $15 million/year company. It’s created great exposure for us. It’s given us a ton of clients, at least one or two a week for at least two years now.
What’s the most rewarding thing about owning a business?
The most rewarding thing is when a customer tells you how you have done something that’s made their life easier.
What does the future look like for your business?
We’re entering our third year. We’ve doubled our business for the first two years, and we’re anticipating doing the same again this year. Our momentum is really picking up.
What advice do you have for someone starting a business?
I never would have done it if I weren’t naïve about how much work it takes. My favorite saying is, “Ready, fire, aim.” So, just go for it. If you have the desire and the passion, you’ll figure it out later, just do it.