A guest post by Mike Jackness from Ecomcrew.com
I sold one of my brands, ColorIt.com in early 2019 for just over $1million. One of the biggest reasons I was able to get this high of a valuation for my company was because of our incredible team of VAs based in Cebu. In this article, I’ll detail how we did it.
I’ve run ecommerce businesses for nearly a decade (and prior to this I ran one of the largest poker affiliate sites in the world). From the beginning, I’d always had a local office and warehouse based in San Diego. As you can imagine, leases anywhere in Southern California are not cheap!
Most of my professional life I’ve been fairly adverse to remote employees because of my fear that their productivity would suffer when working in their pajamas on a living room sofa. So I required that all of our staff work 9-5 jobs based in our San Diego office. I’ve always had various VAs in my businesses, but they’ve always been simply support staff to do menial work such as data entry. I never trusted them with high-value tasks.
For the first couple of years my San Diego team was fantastic. I had a rockstar logistics manager who would never say no to anything I asked of him and I had mentored a couple of outstanding junior marketing managers. Each of these employees had salaries well over $40,000USD per year but it was worth it.
But then after a couple of years, the San Diego boat started to rock. My rockstar logistics manager was feeling burned out after a couple of years of working long days and quit. My junior marketing managers who I had personally groomed from being completely green to fully ripened digital marketing stars left for bigger (and richer) opportunities now that they had some valuable initial experience. I replaced each of these employees but the same cycle of losing employees after training them continued.
Throughout this turmoil though, one employee had been my loyal rock with continuously improving working abilities: one of my Filipino VAs named Mia.
I explained to Mia the staffing issues we’d been having and asked if she would like to help spear-head opening a Filipino office based in Cebu to replace our San Diego team. She agreed without hesitation and within months we had begun replacing most of our San Diego based staff. We paid our Filipino team members well above average but still managed to reduce our payroll by over 80%. It meant a savings of over $100,000 per year.
Throughout all of this, I kept my mantra of believing employees work better when together in the same workplace. We rented office space and required all of our Filipino staff to work regular 9-5 jobs, Monday to Friday (Filipino time – graveyard shifts kill moral). In essence, the only remote employee my company had was me, working remotely in San Diego.
Today we have over a dozen employees based in Cebu. After several years I have yet to have one employee quit. I owe it to the fact we have a ‘Google-like’ work environment in Cebu where everyone wants to work for us. We provide excellent work-life balanced hours, frequently paid team lunches, and provide opportunities for travel. For better or worse, being a competitive employer in this regard in Southern California is very difficult.
There are of course positive and negative differences between hiring in the Philippines and America. The level of education in America is hard to match so American employees are often beginning with a more advanced starting point. And having a flat organizational structure where I want my staff members to be blunt and candid with me is difficult to convey in a high power distance like the Philippines. But overall, the work ethic and genuine appreciation easily compensate for these things.
After I sold ColorIt.com, some of the employees ‘moved desks’ with the new buyers of this brand. Each of the employees got a nice bonus with the sale it (remember the $100,000 per year I was saving? At a 3x multiple this translated to well over a quarter-million dollars in increased valuation). However, I continue to operate multiple brands with over a dozen VAs and the process of launching brands is infinitely easier with the Cebu-based team.
There’s value in having locally based employees and in certain industries, it’s nearly impossible to outsource (I have yet to find a great way to have my Filipino team drop off packages to the USPS post office from the Philippines!). However, for many businesses, especially those in digital marketing, VAs can be more than virtual assistants – they can be an entire remote team. You can see more about how we hire VAs for all of our Amazon businesses here.
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Julia has been working for OnlineJobs.ph since 2012, first as a writer and now as its social media manager and content development specialist. She also founded the Davao Virtual Assistants Association, the biggest VA association in Davao City.
She’s a full-time wife and mom and volunteers her time as an internet rights advocate.