Learnings from B2B service company with high customer concentration

October 03, 2022

by a searcher in San Francisco, CA, USA

Hi All,
I've grown a staffing agency in the VA space, with a US based VA as our niche. I wanted to share a few lessons I've learnt over my journey growing 20x over the last year. Good and bad.

We currently offer VAs for around 27$/hr. Our USP is US educated, US located, experienced VAs. We have an operating moat because we pay above market, as well as provide regular bonuses, and we go to bat for our VAs when there are disputes (within reason). This has really helped our reputation in the VA community, and we're flooded with 1000+ applications each month. I get to pick 4-5 each week, the best of the best, and this flows into a high client retention rate of 98%+!

It's not all roses in the journey. One of our clients, who brings in approx. 20% of our MRR, has started negotiating prices, bringing us down to almost 22% margins from 27% before. Each phone call/email from them is an opportunity for me to grow revenues, but give up on some margins. I've finally grown to be essential to their operations enough, and now we see the balance of negotiating power restored. Lots of war stories to share, happy to give more if there's interest!

Reply by a searcher
from University of the Pacific in Charlotte, NC, USA

Good luck. I ran a VA business that was part of a larger wealth management institution. I found that the more prescriptive you can be with how your clients can best utilize your VAs (i.e., templates, process, etc.), the more consistent service you will provide leading to greater retention. This will also enable you to better leverage your VA resources.

Reply by an investor
from University of Oxford in San Francisco, CA, USA

Congrats & hang in there with the whale! What's the company called?

+6 more replies.

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