Hands down, one of the most common questions I am asked is “How much should I charge for my VA services?” This is a loaded question and we could spend all day diving into this one. But let’s keep it simple. There is a formula you can always fall back on when you are pricing your services – but it starts with valuing yourself and your services accurately. But before we get into the nitty-gritty, we need to talk about the elephant in the room: Imposter Syndrome.
Kick imposter syndrome to the curb.
When you are first starting your business, it’s normal to feel out of your depth. “Who am I to be charging this much money? I don’t even know what I’m doing!”. It feels like you have a big flashing neon sign on your forehead that’s screaming “Hey everyone! I’m new at this!”. First of all, the services you are providing are valuable. You are providing something that someone else wants – so it’s worth money. Period. It really doesn’t matter how long you’ve been doing this. If you can provide value to someone through a service, then you can charge what you are worth.
But what am I worth?
“Charge your worth!” has become a bit of a catchphrase and I know it can be frustrating when you feel like you have no frame of reference and just want someone to give you a number.
“Charging your worth” starts with knowing the industry standards. In 2019, the baseline minimum for Virtual Assistants is somewhere between $25-30 an hour. You will see much lower and much higher rates sprinkled around this space, but most beginner VA’s should set their minimum hourly rate at $30 and build from there as they add specialized skills to their service list. Exceptions to this would be if you are coming into the VA game with the skill set to offer high value to clients right out of the gate. Examples of this would be web development, copywriting, email marketing or specialized marketing skills. Highly specialized services command a much higher rate, usually in the $50-100 an hour range.
The package vs. hourly debate.
If at all possible, customize a service package for each client and charge a flat rate each month based on what you are providing. You can still use your internal hourly rate to determine the price of a package (for example, if you estimate a task that’s billed monthly will take you 10 hours, and your internal rate is $30/hour, the package is set at $300.). One of the best things about packages is that you are rewarded instead of penalized for getting better at your job. Maybe that 10-hour job only takes you 6 hours one month because you’ve found a way to streamline the process. Congratulations! You just made $50 an hour instead of $30.
Not all debates have a clear winner, but in this case, I’m pretty firmly on “team package”, and here’s why: Packages allow the service to become the value, not your time. It takes the focus off of how long a task will take you and onto what you are providing. Clients get very hung up on time tracking, and I’ve seen them try to adjust payments based on how long they think something should take you. When services are priced in a package, the deliverable is all that is needed to receive payment and the time that it takes to accomplish the task becomes irrelevant.
Although I personally avoid charging by the hour if, at all possible, there are times when it makes sense to offer an hourly retainer package to a client. Usually, this is when there are undetermined tasks that they have each month that you can’t quantify or value because they are TBD. In these cases, consider selling “packages” of pre-paid hours for each billing period.
Don’t let a little math scare you.
Sometimes setting your hourly rate is as simple as pulling up your calculator and running some numbers. Start with these two questions:
- How many hours a week are you willing to work?
- How much money do you need or want to make each week?
Divide your income goal by the number of hours you want to work and see how closely that number comes to industry standards. Remember – you can’t just factor in the time spent on client work. You need to be compensated for the cost of doing business. Marketing, retirement savings, taxes, insurance, overhead for software and supplies are all expense categories that you need to take into consideration.
$30 an hour may sound like a lot if you are new to this industry, but consider this: If you complete 10 hours of client work a week for $30 an hour and then spend another 5 hours a week maintaining your social channels and marketing, you just reduced your hourly wage to $20 an hour.
Don’t underprice yourself. There are clients out there who will pay your rates for the services you are offering. If you can’t find them, you’re not looking in the right places.
Pricing mistakes to avoid
Starting out too low.
It’s super tempting to set your prices super low for your first few clients. We tell ourselves that “it’ll be
Underselling your value because of your experience.
Do not undercharge out of desperation – you will regret it. If you see a service being offered for well under the going rate – there’s a good chance that you will assume that the service is somehow sub-par. Others will see your services the same way if you undervalue your services.
Doing work for free.
This is another “newbie” mistake that, unfortunately, I see all too often. The services that you are providing are valuable and you should be paid to perform them. Clients that are looking for free work should raise all kinds of red flags and be avoided at all costs. A mutually beneficial client-freelancer relationship hinges on each party respecting what the other does. With that being said, there are a few effective ways to offer free services that will get you in front of your ideal client, and help you gain social proof in the meantime, but we’ll leave that topic for another time.
Failing to set parameters and expectations.
Every service that you provide to a client should have limits and parameters attached to it. After your proposal and pricing package has been accepted by your prospective client, it’s contract time. It’s vitally important to then spell out, in detail, what is included in your price. It’s very easy for the scope of your contract to creep into areas that weren’t explicitly included or excluded.
Lowering prices instead of value.
It’s very common for prospective clients to come back to you after receiving a proposal and let you know that they can’t afford you. Negotiations are a normal part of your business relationship. But you should never lower your prices. Repeat after me: “My prices are my prices.” The best way to handle a client who can’t afford your proposal is to decrease the value along with your price. Never reduce your prices without a corresponding decrease in value. For example, if your original proposal was for four 1000-word blog posts a month for $1,000/month, and the client can only afford $500/month, you could either offer two 1000-word blog posts or three 700-word posts to fit the client’s budget.
Let’s Keep Talking
It’s no secret that there is a stigma that surrounds money. It’s especially difficult when we are doing business with other mom-
I challenge you to be open and transparent with other VA’s and business owners about what you charge and encourage others to do the same. It’s time to change the conversation. When you charge the industry standard for your services, you lift up the other women around you, instead of competing with them in a race to the bottom.
Need more help with all your foundational business basics? The next round of The Foundation Group Program starts in January 2021! Want to learn more about how this program can jump start your business? CLICK HERE!
