You have decided to launch your Virtual Assistant business and you are ready to start making money from home. But how do you price yourself? If this is a new business for you, chances are that you don’t know where to start with pricing. If you price yourself too high, you are worried you won’t get any clients but if you price yourself too low, you may not be able to make ends meet. The struggle is real and it is easy to get stuck on this.
There are a few different ways to price yourself a Virtual Assistant. None of them are wrong and often it takes trying a few different ways out to see what works for you….trust me, I have tried them all and made many changes to my pricing structure that works for me so you may need to just try a few of them out and see what works for you and your business.
Straight Up Hourly:
This is the method that I suggest everyone starts with. It is easy and when you’re starting your business, there are enough “hard” things to get stuck on, pricing shouldn’t be one of them. When I was first starting my VA business, I had a mentor who asked me what I was charging, at the time, I was just thrilled that I could work from home without leaving my house so I was so excited to tell her somewhere between $13-$15 an hour. Well, let’s just say she shut that idea down pretty quick. She told me at that rate, I would barely be able to cover the costs of running my business, let alone, make a profit. It was easy for me to make that mistake because I didn’t know how much expenses I would have when I was just looking at launching my business. I didn’t realize the programs that I would need to invest in and the taxes I would need to pay. I didn’t have a clue what running a business was all about and how much it would cost so it was easy to look at $13 an hour and think I was set. $13 an hour sounded great, If I was an employee with no expenses but as a business owner, there were a billion other things that I needed to consider that I didn’t even know about! I decided to start my rate out at $25 an hour- the most money I had ever made at any career, never mind one that allowed me to forgo getting dressed in the morning! I was making that for the first 6 months or so of my business but It didn’t take long for me to realize that I would need to raise my hourly rates to make a decent salary and pay for all the expenses that came with running my own business. The more I grew as a company, I needed to take on different programs and I eventually needed to hire team members which were also a big added expense.
My advice to you, do a cost of doing business analysis. Figure out how much it will take every month to run your business. Write down all of your expenses and even look into the future, are there programs that you want to learn or services that you want to offer that require certain programs? Do you need to pay for a professional email address, a website, Adobe, Canva Pro, etc? Write everything down and figure out exactly how much you will need to make and how many hours you will need to work just to cover those expenses.
Keep in mind that as a business owner, you will need to pay your income tax. It’s smart to set aside 20-30% of your income for year-end taxes.
I loved and still love charging hourly because it forced me to track my time by the second. I was able to determine exactly how long it took me to do certain tasks. Without this precious time tracking, I would never have been able to start pricing myself as a package because I wouldn’t know how to properly estimate my time. If I jumped right into packages and sent out a proposal for blogging at $50 per blog post, but it took me 6 hours to write that blog post, well I just seriously underestimated things and just worked for less than $10 an hour.
This is currently how I charge for my services. Retainers are a flat-rate amount that you bill monthly or biweekly. The reason why I love retainers is that it makes budgeting both financially and timewise so much easier for both your business and personally. You know exactly how much you will be making every month. In the beginning, I had no idea how much money was coming in from one day to the next and I had no idea if one week, my clients would send over 1000 hours of work to do or 10. Everything was so inconsistent and I found it all very overwhelming. With retainers, my clients get billed the same amount every month no matter how much work we do so if I am waiting around for my clients to get me to work to do, I am still able to invoice them. This alone encourages my clients to be in consistent communication with me and my team. Retainers mean that they are paying to hold their spot on your client roster. I know exactly how many clients I can take every month with retainers. When coming up with my retainer packages, I use my hourly rate as a base. For example, if I estimate that the work my client needs will take 20 hours per month, I will take my hourly rate of $50 an hour, multiply that by 20 hours and now I know that I need to charge my client a min of $1000 per month. I tell them that for that amount, they will get a max of 20 hours worth of my time, if they don’t use all that time up, ah well. They were paying to hold those 20 hours within my company and I bill them for the full amount.
This is what we all want to strive for. The perfectly curated package that allows you to make more money as you get faster and more experienced. Ok so let’s say you started out charging hourly and you have tracked all your time, you know confidently that it takes you anywhere from 2-4 hours to write a blog post. You want to make a min of $30 an hour so if it takes you to 2-4 hours to write a blog post, you will want to create a blog post package that is anywhere from $60-120 an hour. In this case, I would charge $100 for the package and as I get faster, the profit margin increases. If at one point, it only takes you 1 hour to write the blog post, you just made yourself $100 for that hour. This type of pricing encourages you to get paid for your experience rather than your time, removes the need to track your every second and allows you to make more money, the better and quicker you can complete a project. If you decide that you want to start with packages, I still encourage you to track your time to get a better grip on how long it is taking you to complete projects.
To sum things up, I encourage you to start by charging hourly. This builds trust with your clients because they know exactly what they are getting and it also forces you to get into the habit of time tracking. Once you’re comfortable with tracking your time, you can see if you can notice patterns in your business and the amount of time it takes you to complete certain projects. Perhaps some of them can be made into packages.
Does it take you on average 10 hours to plan a month worth of social media content? Create a package for social media content that allows you to make a good profit margin considering it takes you those 10 hours. If you know it takes you 10 hours and you want to/need to make a min $30 an hour, price your package at $500 per month so that you make a good profit and cover your expenses.
When I was running Wellcurated, my VA agency, I would have retainers for admin care and I would outline exactly what admin care was.
I would have packages for social media management, website design, and branding. If I couldn’t fit what my client needed into either admin, branding, web, or social media than I had a flat hourly rate for all else.