Ep. 009: Pricing 101: What Structure is Best for Your Virtual Assistant Business?
Many VAs tend to really discount their services when they are launching their businesses. They think that big hourly rates or high-priced packages will scare away potential clients. Let’s face it: it can be really scary to ask for the rates that you need and you deserve.
Here's the thing you have to remember: clients will hire you because they need you and because you have skills to do things that they can't or don't want to do. This makes you extremely valuable.
From the very beginning, you need to establish yourself as a professional. Your business will not be sustainable if you set low rates. You will end up having to take on way too many low-quality clients. You won't be able to afford to invest money back into your business. And worst of all, you will be setting a tone with your clients that you're not worth the rate you deserve.
Ask yourself why you're starting this business. Is it because you want to work around the clock? Or is it because you want time and financial freedom? Do you want to work crazy hours for clients that don't respect you? Or do you want to be able to focus your attention on clients that you love?
Now is the time to set your standards. You're a boss babe now and you should price your services accordingly.
Okay, so now that we’ve got our mindset right, let’s dive in. One of the big reasons that getting your pricing right is important is because there are a lot of expenses involved with running a business. Your hourly rate is not your take home pay.
As an independent contractor, you are responsible for all of the things that an employer would usually take care of including taxes, insurance, sick days, and retirement savings.
So how much should you factor in for those things? A good rule of thumb is 30% of your income. I have a formula that will help you calculate how much your hourly rate should be that I’ve included in a free pricing guide in the Freebie Shop on thesupportsquad.com. Make sure to download that guide, because it will have all of the info from today’s episode plus more! It’s a really good resource for you guys.
So let’s talk about some other things to consider when choosing an hourly rate.
Your niche and skill level definitely factor in. Having a clearly defined niche or skill can raise your value as a virtual assistant. So while a general virtual assistant might charge $30 an hour to manage a Pinterest account, a virtual assistant who specializes in Pinterest could charge $40-50 an hour. A client who needs someone who really knows their stuff and can produce fast results will gladly pay a higher rate.
Also make sure you’re doing your research about what other vas in your niche and industry are charging. Take a look at experienced virtual assistants who have been running their business for a couple of years. Check their websites to see how they're presenting their rates and how they structure their pricing. Use that for inspiration, but please don't copy and paste word for word! That’s just rude!
Now that you know how much you need to make per hour, you can decide how you want to package or present your services. I’m going to go over 4 different ways that you can structure your pricing and the pros and cons to each of them.
This pricing structure is great for newbies, administrative VAs, and customer service VAs. Most new virtual assistants go this route when first offering services to clients. And while charging an hourly rate might seem simple enough, there are some important factors to consider: First of all, you will need to be diligent about tracking your hours. I love to use to Toggl to track hours by time and project. Also keep in mind that you will not have a guaranteed income each month. When you're charging by hour, a client might not be consistent with how many hours they need you each month. This can also make it difficult to manage your schedule. That said, clients tend to like paying their VAs hourly because it’s a simple structure to understand and they know that they’re paying for exactly how many hours of work are being put in.
This is a great structure for social media VAs, email marketing VAs, copywriting VAs, or really any VA that offers services that bundle together well. Make sure that you price each package by estimating how much time it will take you and multiplying by your hourly rate. Packages tend to be really appealing to clients because they can see exactly what they’ll be getting. For example, social media VA can offer a weekly package that includes 5 IG posts , 2 hours of engaging with followers and other accounts, 1 custom IG story. Copywriting VAs could offer a package that includes 1 blog post, 1 newsletter, 3 social media posts. Or a podcast VAs could offer a package that includes editing a 1-hour podcast, updating the ID3 tagging, and uploading and scheduling in Libsyn. You can also create different levels of packages, making it easy for client to upgrade their services as their needs grow.
Project Based -
This structure works well for website developers, Pinterest VAs, project managers, or any VAs that work on projects for clients from start to finish. Sometimes a client will need you just for a one-time project. This is especially true for website developers. There are a few thing you should consider when it comes to this kind of structure. First of all, you should know that it is common practice to require payment of 50% of the cost of the project up-front. This will protect you in case the client decides to abandon the project after you have already put in working hours. Also, make sure that you are being realistic about how much time it will take you to complete the project and set the price according to your hourly rate. Contracts are very important with this type of structure, because you need to be protected if the scope of the project changes. For large projects, it could be worth consulting a lawyer to make sure you’re completely covered.
This structure is great for any VAs that perform about the same number of hours of work each month for the same clients. So, a retainer is when a client pays you up-front for a certain number of hours per month. This is great way to get a guaranteed monthly income as a freelancer. If you are an executive assistant or online business manager, this is a great option! I work on retainer with my clients and it gives me and them a sense of peace because we both know exactly how much I’ll be making each month. I try to evaluate the retainer about every 6 months to make sure that it’s appropriate for the amount of work I’m doing.
Alright, so we’ve gone over how to determine your hourly rate and the different ways you can package your services. And if you’re still stuck on pricing, here’s a tip: If you have a little bit more flexibility in your income, if you haven't defined a specific niche yet, and you just want to get started, $25/hour is a solid hourly rate to charge. You won't attract the low-quality clients who are looking for the lowest bidder, and you won't scare away high-quality clients who are hiring a VA for the first time. Just a little tip, if you’re feeling stuck.
If you have any questions about this week’s episode, make sure to download my free pricing guide for virtual assistants in The Freebie Shop at thesupportsquad.com. It has all of the info from today’s episode and more! Also make sure to join us in The Support Squad Hangout on Facebook. I drop in LIVE every Thursday at 1 pm PST to answer questions about the podcast and anything else you’re struggling with in your business. Thanks so much for listening. Until next time, boss babe.
Learn how to factor in overhead and expenses and determine which pricing structure is best for your business.