Everyone has a different approach to virtual assistant pricing. When I started as a virtual assistant, I was just thrilled to get paid for the work I was doing. I was so desperate that I lived life on the edge. I bent over backward to land clients that weren’t even dream clients. My hourly rate was super low and didn’t honor the knowledge I brought to my clients. I didn’t have a contract to protect my business.
And then I spent a lot of time wondering why my business wasn’t thriving.
Seriously, I challenge you to go into any of the Facebook groups you belong to and ask about virtual assistant pricing to five different VAs. I guarantee you’ll get five different answers. For me, I had to stop looking around at what everyone else was doing so I could figure out what felt right to ME. (Seriously, finding your “happy price” is a thing.)
Even after I figured out my rates, I was stumped for months about what pricing structure worked for my business. As a virtual assistant, there are two different pricing structures that you hear about: charging clients by the hour and creating packages. Once I understood WHY each system works, it was much easier to structure my pricing.
To demystify virtual assistant pricing, let’s dig into the pros and cons of both systems:
Pricing by the Hour
When you’re just starting your business, it makes a lot of sense to charge by the hour. It gives you a lot of flexibility in your business, both in the kind of client and type of work you’re taking on. Hourly billing also gives you the space to build your skills and to determine how long each task will take. (Also if you’re doing it right, you’re also going to be raising your rates more frequently as you gain confidence.)
A few tips of the trade:
- Have a solid contract in place that talks about your payment terms. You have to protect yourself against non-payment since you’ll be paid after the work is complete. There are lots of contracts floating around on the internet but I strongly encourage you to invest in a contract that works for your business.
- It’s okay to bill bi-weekly. It will help with your cash flow and will protect you from those who try to skip out on payment. Personally, I use Dubsado to help make billing easier so this doesn’t take up too much of your time.
- Look at the big picture when tracking your time. Using a free program like Toggl will help you see how long common tasks are taking you to give you data when you’re ready to build your packages.
Creating Packages or Retainers
Everyone has a different take on packages. It’s dependent on the type of service you offer, if you’re doing ongoing work with a client or are completing one-off projects, and a dozen other considerations. You’ll also hear some people using the terms “packages” or “retainers” interchangeably for the basic concept of charging a flat fee for a set amount of work.
A few tips of the trade:
- Make sure you know how long each task will take. If you underestimate the amount of time a task will take, you decrease your hourly rate and run the risk of losing money on the project.
- Create a threshold for working with you. Set a minimum level of time that a client can work with you each month. (Mine is 20 hours/month.) This helps you attract the type of clients that you want to work with AND helps you anticipate your cash flow each month.
- Recurring payments are your friend. I have my monthly retainers set up on automatic billing. I don’t have to mess around with invoicing and my clients don’t have have to remember to pay them. I use Quickbooks to make this happen but there are many ways to set this up.
Honestly, billing hourly works best when you’re just starting out AND when you’re balancing a lot. It’s not a great idea to set up packages if you’re not 100% certain that you’ll have the energy to do all that work. It took me 18 months to get to the point where I felt comfortable enough with my skills and health that it felt good for me to put clients on retainer. Not that I’m there, it’s brought a lot of freedom to my business. I know how much money is coming in each month, can better plan my days, and get to form ongoing relationships with amazing clients.