Virtual Assistant Rates- You Want to Charge What?

Thank you, thank you for posting about pricing. In researching prior to launching my business, I found pricing was a taboo subject. Like many newbies, I have struggled in finding the right level where I'm not under or over pricing. I'm fortunate in that hubby's income is supporting the family while I get started. However, others are not as fortunate and are lowering their pricing in attempt to gain more clients.

After reading your post, I now feel more confident about my prices.

Michelle,
I'm so glad this post struck a chord. :) And I can honestly say that I find myself returning to Michael's book several time a year just to refresh my memory on some of the great advice there.

Hi Pam, thanks for dropping by and taking part in our conversation. I can certainly understand your situation, and it is exactly the reason that new virtual assistants should take the steps I spoke of in the post and that Lisa spoke of in her comment BEFORE they start taking clients. As you mention, it's not as easy to raise rates as it may sound to some, and that's the danger in thinking you can charge less in the beginning. When you speak of the local market not being willing to pay more than your rate, this all comes back to your value, while I'm not questioning your statement, I do want to mention that you're not limited to local clients. Your ideal clients (the ones that will pay you what you're worth and clearly see that worth) may not be in your local area. Sometimes when we live in an area where business owners can't perceive our value, we simply need to look in another direction.When I lived in Maine, I lived in an area where my rates seemed astronomical to local businesses, but there were two larger cities within a 1 hour radius of me where my rates were seen as reasonable. And remember, you can guarantee that some of your local businesses are paying their plumbers, lawyers and mechanics more than $25 per hour. Again, it all comes down to how clients perceive the value in your services.

I would love to raise my rates but…sometimes you just don’t have the financial ability to wait for new clients to come on board when some of your current ones leave after you raise your rates. Most of my clients are local and my per-hour rate is at the upper range for my area ($25/hr). Others I know that charge more are having trouble getting clients even though they are excellent in what they do and are established VA’s. I have three long-time clients for whom I never raised their rates when I went to my current rate three years ago. I might bite the bullet in a couple of months and raise one of them at a time to see how it goes. Several times I’ve been the recipient of a partially-completed project from a new client who switched to me “even though I’m more expensive” because the previous person wasn’t producing quality work. So at least some people are learning the “you get what you pay for” saying. Even so, and even though I’ve been in business for 14 years, it’s still a scary thought to lose income when you don’t know how long it will be before you can get new clients.

Lisa, good points. Everyone's situation is different. A year ago I sold my home and moved 200km to care for my mother who is 84, frail and has Parkinsons Disease. She's doing quite well but could no longer manage by herself. I'm quite a bit older that the rest of you and really need to work little, if at all, but I'm a driven sort of personality and I must keep my brain alive. I take very few clients so I can give them my total attention and 101% service. My lifestyle also allows me to only work with A1 clients of my choosing. After more than 25 years as an Executive Legal Assistant in international law firms and industry I have a lot of experience to share and I keep up with technology, social media and trends on a daily basis.My new city is very "old school, old boy's club" and no-one has any idea what a VA is or what one does. Although I've been a VA as a sideline since the 80s, these days I merely say I run a secretarial services company. I know, everyone's going to be mad at me, but that's what the locals understand - they "get it" right away. I run my dogs in the park at dawn each morning and walk with/talk to people from all walks of life from bus drivers to doctors to housewives (sorry, domestic engineers). They may not need services but who knows who they know? I'm getting well known there as my dogs share their home-made treats :)I am happy and stress free. As I said, everyone is different.

Bravo Lisa! You've discovered the secret of setting prices and finding clients that are a perfect fit for you! You have set what Michael Port calls the 'velvet rope' in "Book Yourself Solid". His point being that not just anyone can be your client, they need to meet certain criteria, and when they meet it, they are willing to pay and appreciate your value. I wish more virtual assistants would seeing the $4 virtual assistants as competition and realize that the clients that are looking for cheap VA's aren't the type of clients they need. Although in this post I focused on the issues that setting rates too low can cause, I totally agree with you about pricing from a value basis. Unfortunately, many aspiring virtual assistants don't even recognize their value, so it's at that point that it's important to also weigh the points made in this post about the costs of running a business and the ability to manage time realistically.Thank you so much for sharing this, as it is the 'ideal' way to determine your rates when you have a solid understanding of the value you bring to the table!

Tina - when it comes to rates I have a totally different mindset. Here comes an honest and frank discussion of my pricing evolution...When I first started, like every new VA, I looked at what others were charging for the services that I was providing. I settled on $30 an hour and this was back in 2005. After a few months I began charging new clients a higher rate - but the problem still existed that I was attracting clients who had an "I'm not making very much so I have to find someone who doesn't charge" approach to partnering with a VA. then, when I raised rates again after a year and a half, a few became passive/aggressive. For example, they would say things like "You didn't make that mistake when I was paying you x so now that I'm paying more, I expect perfection." It always boiled down to the money issue.I felt stuck. I felt underpaid. I felt devalued.While I was working with a client's JV project, I came across a couple of people who coached people to "charge what they are worth." I bought the workbook and came up with what he calls a "lifestyle formula." Basically the formula is to come up with an amount you'd like to make, how many hours you want to work, divide that number and that is your hourly rate. Ex. $5,000 per month / 100 billable hours per month = $50/hour. I put together a letter to my clients explaining the rate increase and gave GREAT reasons why I was doing this and how this would benefit them. I posted my rates on my website to weed out the bargain seekers. And yes, I did lose a large percentage of clients. But then guess what? It made room for higher end clients looking for that personal attention, quick response, and working with someone who wasn't so burned out from juggling 20 clients. I don't set my rates based on geographic location, the market, or what others are charging. I set them based on the value I provide and the skills I bring to the table. Once I changed my mindset, life became a lot more simple. I feel valued and unstuck! I hate to see VAs undervalue their services and would love to see more approach it from a value basis that as an expense to the business owner.

Hi Lynne, While I agree that starting out with a slightly lower rate and raising rates later can be a great way to introduce yourself and your services as well as build a client base, there is one major thing you need to keep in mind. During that time period you must provide services that are at the highest level. Your clients must see an incredible value at that lower rate so that when you raise them it's almost something they are expecting. And that lower rate must still be high enough to cover your costs associated with your business. Raising rates can be an extremely tricky thing, some people have good experiences with it like your handyman, and others have a much different experience, losing clients in the process. Great thoughts Lynne, and thank you so much for coming by and sharing them!

Serita,Thanks for your great comment. The motivating factor behind this post was an interaction I had with a new virtual assistant. Over the years I've noticed that almost every new virtual assistant I speak with about rates is under-charging to the point of business failure. Too many people enter this business with an employee frame of mind rather than that of a business owner.

Great post and I totally agree with everything, however there may be another way to look at it. If you charge less than the going rate, and I don't mean something like $10 an hour, but just a little less to become established in a new venture or a new niche, you can raise your rate later.

As an example I have a terrific handyman/contractor, efficient, on the ball, a lifelong passion for what he does and can fix or build anything. At age 60 he was laid off and, unable to find a job, he decided to follow his passion and start his business. He charged a bit lower than the going rate and within a few months was swamped with work, all from word of mouth. After a year he raised his rates and now, 6 months later, he's even more swamped with work.

Just something to think about.

Tina I'm so glad you wrote this post. I just spoke to a woman 2 days ago that was totally frustrated because the first 2 real estate agents that approached her were only paying her $8.00 an hour. I felt so horrible for her. Not only were they seriously underpaying her, but they were also talking down to her at every opportunity. I spent approximately a half hour discussing rates with her. I hope she finds better in her next clients. Thanks for a great post.

There are a lot of internet marketers who are not ready to pay the right amount. I have been a VA for quite some time and my skills is in SEO, website setup, website/blog management, and even blogging. I deliver good proven results in my campaigns and I am even helping some of my friends get a some real jobs online. And I even manage a small group of VA's myself. Do I deserve $20-$35 an hr? Oh yes I do especially that my experience cover from a VA to a website owner myself.

There are lots of people who does not know what they are talking about and posting a ridiculous offer for VA's. I even had one marketer who did not pay me after all those hard work I've done for him while his website gets the rank. He just gone by the wind.

There are even those who wants to get a VA based on "commission" from their website income while their website is totally a "BRAND NEW SITE" which literally mean "TONS AND TONS" of work and it may even take a year before it start earning $300 a month.

On the other hand, there are those whom I treasured much. I feel so blessed to have them as my boss.

Anyway, my point is, be reasonable for the skills. Feel free to test the VA and if he is doing a good job, then give him a good offer. Guys like me who can run a website, and even a team of VA's is worth every penny.

But I guess, I am like a miner that was digging in a wrong mining field. So if there's anyone here who wants to try my skills and is willing to offer me at least $30 an hour, that will really be great!!!

THANKS ALOT FOR UR GOOD POST ....

Atarjamat

www.atarjamat.com

Thank you, thank you for posting about pricing. In researching prior to launching my business, I found pricing was a taboo subject. Like many newbies, I have struggled in finding the right level where I'm not under or over pricing. I'm fortunate in that hubby's income is supporting the family while I get started. However, others are not as fortunate and are lowering their pricing in attempt to gain more clients.

After reading your post, I now feel more confident about my prices.

Great post Tina!

Thank you so much for this post! I have struggled so much with finding a rate that will be acceptable for both me and my clients. I think that if you find the right clients and they understand the value that you will bring to them, it shouldn't be an issue. I don't believe in lowering my rates because I'm a new VA. I have tones of experience and I'm very qualified for the services I offer. If prospects are looking for a $15/hour virtual assistant than we're just not meant to work together and I wish them luck!

Hi Pam, thanks for dropping by and taking part in our conversation. I can certainly understand your situation, and it is exactly the reason that new virtual assistants should take the steps I spoke of in the post and that Lisa spoke of in her comment BEFORE they start taking clients.
As you mention, it's not as easy to raise rates as it may sound to some, and that's the danger in thinking you can charge less in the beginning.
When you speak of the local market not being willing to pay more than your rate, this all comes back to your value, while I'm not questioning your statement, I do want to mention that you're not limited to local clients. Your ideal clients (the ones that will pay you what you're worth and clearly see that worth) may not be in your local area. Sometimes when we live in an area where business owners can't perceive our value, we simply need to look in another direction.
When I lived in Maine, I lived in an area where my rates seemed astronomical to local businesses, but there were two larger cities within a 1 hour radius of me where my rates were seen as reasonable.
And remember, you can guarantee that some of your local businesses are paying their plumbers, lawyers and mechanics more than $25 per hour. Again, it all comes down to how clients perceive the value in your services.

I would love to raise my rates butu00e2u0080u00a6sometimes you just donu00e2u0080u0099t have the financial ability to wait for new clients to come on board when some of your current ones leave after you raise your rates. Most of my clients are local and my per-hour rate is at the upper range for my area ($25/hr). Others I know that charge more are having trouble getting clients even though they are excellent in what they do and are established VAu00e2u0080u0099s. I have three long-time clients for whom I never raised their rates when I went to my current rate three years ago. I might bite the bullet in a couple of months and raise one of them at a time to see how it goes.

Several times Iu00e2u0080u0099ve been the recipient of a partially-completed project from a new client who switched to me u00e2u0080u009ceven though Iu00e2u0080u0099m more expensiveu00e2u0080u009d because the previous person wasnu00e2u0080u0099t producing quality work. So at least some people are learning the u00e2u0080u009cyou get what you pay foru00e2u0080u009d saying. Even so, and even though Iu00e2u0080u0099ve been in business for 14 years, itu00e2u0080u0099s still a scary thought to lose income when you donu00e2u0080u0099t know how long it will be before you can get new clients.

Lisa, good points. Everyone's situation is different. A year ago I sold my home and moved 200km to care for my mother who is 84, frail and has Parkinsons Disease. She's doing quite well but could no longer manage by herself. I'm quite a bit older that the rest of you and really need to work little, if at all, but I'm a driven sort of personality and I must keep my brain alive. I take very few clients so I can give them my total attention and 101% service. My lifestyle also allows me to only work with A1 clients of my choosing. After more than 25 years as an Executive Legal Assistant in international law firms and industry I have a lot of experience to share and I keep up with technology, social media and trends on a daily basis.

My new city is very "old school, old boy's club" and no-one has any idea what a VA is or what one does. Although I've been a VA as a sideline since the 80s, these days I merely say I run a secretarial services company. I know, everyone's going to be mad at me, but that's what the locals understand - they "get it" right away. I run my dogs in the park at dawn each morning and walk with/talk to people from all walks of life from bus drivers to doctors to housewives (sorry, domestic engineers). They may not need services but who knows who they know? I'm getting well known there as my dogs share their home-made treats :)

I am happy and stress free. As I said, everyone is different.

Bravo Lisa! You've discovered the secret of setting prices and finding clients that are a perfect fit for you! You have set what Michael Port calls the 'velvet rope' in "Book Yourself Solid". His point being that not just anyone can be your client, they need to meet certain criteria, and when they meet it, they are willing to pay and appreciate your value.
I wish more virtual assistants would seeing the $4 virtual assistants as competition and realize that the clients that are looking for cheap VA's aren't the type of clients they need.
Although in this post I focused on the issues that setting rates too low can cause, I totally agree with you about pricing from a value basis. Unfortunately, many aspiring virtual assistants don't even recognize their value, so it's at that point that it's important to also weigh the points made in this post about the costs of running a business and the ability to manage time realistically.

Thank you so much for sharing this, as it is the 'ideal' way to determine your rates when you have a solid understanding of the value you bring to the table!

Tina - when it comes to rates I have a totally different mindset. Here comes an honest and frank discussion of my pricing evolution...

When I first started, like every new VA, I looked at what others were charging for the services that I was providing. I settled on $30 an hour and this was back in 2005. After a few months I began charging new clients a higher rate - but the problem still existed that I was attracting clients who had an "I'm not making very much so I have to find someone who doesn't charge" approach to partnering with a VA. then, when I raised rates again after a year and a half, a few became passive/aggressive. For example, they would say things like "You didn't make that mistake when I was paying you x so now that I'm paying more, I expect perfection." It always boiled down to the money issue.

I felt stuck. I felt underpaid. I felt devalued.

While I was working with a client's JV project, I came across a couple of people who coached people to "charge what they are worth." I bought the workbook and came up with what he calls a "lifestyle formula." Basically the formula is to come up with an amount you'd like to make, how many hours you want to work, divide that number and that is your hourly rate. Ex. $5,000 per month / 100 billable hours per month = $50/hour.

I put together a letter to my clients explaining the rate increase and gave GREAT reasons why I was doing this and how this would benefit them. I posted my rates on my website to weed out the bargain seekers. And yes, I did lose a large percentage of clients.

But then guess what? It made room for higher end clients looking for that personal attention, quick response, and working with someone who wasn't so burned out from juggling 20 clients.

I don't set my rates based on geographic location, the market, or what others are charging. I set them based on the value I provide and the skills I bring to the table. Once I changed my mindset, life became a lot more simple. I feel valued and unstuck! I hate to see VAs undervalue their services and would love to see more approach it from a value basis that as an expense to the business owner.

Hi Lynne,
While I agree that starting out with a slightly lower rate and raising rates later can be a great way to introduce yourself and your services as well as build a client base, there is one major thing you need to keep in mind. During that time period you must provide services that are at the highest level. Your clients must see an incredible value at that lower rate so that when you raise them it's almost something they are expecting.
And that lower rate must still be high enough to cover your costs associated with your business.

Raising rates can be an extremely tricky thing, some people have good experiences with it like your handyman, and others have a much different experience, losing clients in the process.

Great thoughts Lynne, and thank you so much for coming by and sharing them!

Serita,
Thanks for your great comment. The motivating factor behind this post was an interaction I had with a new virtual assistant. Over the years I've noticed that almost every new virtual assistant I speak with about rates is under-charging to the point of business failure. Too many people enter this business with an employee frame of mind rather than that of a business owner.

Great post and I totally agree with everything, however there may be another way to look at it. If you charge less than the going rate, and I don't mean something like $10 an hour, but just a little less to become established in a new venture or a new niche, you can raise your rate later.

As an example I have a terrific handyman/contractor, efficient, on the ball, a lifelong passion for what he does and can fix or build anything. At age 60 he was laid off and, unable to find a job, he decided to follow his passion and start his business. He charged a bit lower than the going rate and within a few months was swamped with work, all from word of mouth. After a year he raised his rates and now, 6 months later, he's even more swamped with work.

Just something to think about.

Tina I'm so glad you wrote this post. I just spoke to a woman 2 days ago that was totally frustrated because the first 2 real estate agents that approached her were only paying her $8.00 an hour. I felt so horrible for her. Not only were they seriously underpaying her, but they were also talking down to her at every opportunity. I spent approximately a half hour discussing rates with her. I hope she finds better in her next clients. Thanks for a great post.