5 Things to Consider When Setting Your Virtual Assistant Rates
How much money can you make as a Virtual Assistant?
This is a very popular question among new VAs. The answer is very simple. You can make whatever you want.
I know that sounds like a really basic answer but it’s the truth!
When you are a VA, you are a business owner. You can set your own rates and your clients can choose to pay them (or not!).
But make no mistake – no one gets to set your VA rates but you.
Here are 5 things that you need to consider when setting your VA rates:
1. Your Level of Expertise
It goes without saying that the higher skill level you have for any task, the higher your rate can be. When VAs set their rates, they often undervalue themselves because they think they don’t have enough VA experience.
Even if you don’t have a lot of experience as a VA yet, it is your experience as an administrative professional that counts. Let me say that again: VA experience is NOT required to start your business, or to set your rates. ADMIN experience is what is important.
If you have taken some skills training, you can also charge more than someone who has just picked up the skills on their own (think social media services).
2. Your Revenue Target
How much do you need to earn every month? This is a key place to start when you are setting your rates. You need to set rates that will allow you to earn what you need to sustain your business.
Rather than picking a number out of thin air (that’s what I did — cringe!), or a number that you feel comfortable selling to clients (I did this too — ack!), you need to base your rates on actual numbers.
Use this rate calculator to figure out what you need to earn, and how that can break down into an actual hourly billable rate for you. When you know how much you need to bring in every month, and how many clients you can work with, you will be able to set a solid rate for your services.
3. Billable Versus Non-Billable Time
Calculating your rates sometimes also brings up the question of billable time versus non-billable time.
What is the difference? Simple…
Billable time is the time that you spend working on client work – the time that they are actually paying you for.
Non-billable time is your own admin time – doing your billing, seeking out new business, onboarding new clients – these are all things that are not billable in your business, but your time has to be accounted for (and covered) by your client rates.
Some business folks call this overhead, and it is, but it is often a variable expense that changes, the more clients you have.
But make no mistake – whenever you are doing work for a client, that is billable time, and you should be charging them for it.
4. Your Business Setup
Do you work on your own or do you have subcontractors (or do you intend to have them at some point?). If you have subcontractors, your rate needs to be able to cover that expense. Don’t start your business and then try to accommodate subcontractors – you need to plan for it and charge accordingly.
What about your expenses – do you anticipate a spike in your expenses any time soon? Many VAs go into business not thinking about what they might put out – or worse, then they start to panic over normal business expenses (like credit card fees), because they haven’t accounted for them when setting their rates.
Your rate needs to be able to cover your overhead and your plans and still leave you some profit. After all, you are in business to make money, so be cautious not to send back out everything that comes in.
5. Your Target Market’s Budget
How much can your clients afford to pay you? You need to take this into account when you are considering who your clients will be – and this is where their budget comes into your planning.
For instance, if you work with non-profits, your rates might differ from someone who works with lawyers. Sometimes this is also related to your expertise, but for sure there are certain clients that are accustomed to paying more than others.
If you are setting up rate packages, consider this point in particular. Create different levels of client service packages that can accommodate different budgets.
Setting your rates is one of the most important things you need to do well in your business (other than the actual VA work!). If you don’t set them high enough to start, you won’t be able to maintain your business well.
Do it right from the start and you will be able to get clients, build your business, and be happy!
For help with getting your business foundation in place, consider registering for my Getting Started as a Virtual Assistant self study program. It walks you through step by step all of the things you need to have in place to open or grow your business properly – including your rates and services! www.GetStartedVA.com
About the Author: Tracey D’Aviero is a Virtual Assistant Coach, Trainer, Speaker and Author. After operating a busy VA business of her own since 1996, Tracey began teaching others to run their VA businesses in 2010 through Your VA Mentor. In 2016 she purchased the CAVA and GAVA VA associations and now teaches and coaches VAs exclusively. She has a vast amount of experience working in many different industries which helps her to offer her students and coaching clients a unique perspective and sound advice. She is a proud advocate of the Virtual Assistant industry. Learn more about Tracey’s journey in the VA industry here.