How much SHOULD you be charging?

FANTASTIC QUESTION. I’ve put this post on the back-burner far too many times – despite this being the number one question I get asked by new VAs. I’ve definitely answered this in many livestreams, but finally I have decided to put all my thoughts and advice on this topic in one place for everyone.

Setting your rates as a VA can be super confusing and often will bring up a lot of limiting beliefs like ….’I don’t deserve that much’….or ‘people won’t pay me that much’ and before I go any further, YES YOU DO, AND YES THEY WILL. I would not be writing about nor teaching about the VA career if those beliefs were true. 

So limiting beliefs aside, how much should you be charging? Well, it depends. However, based on my extensive interactions with new VAs, and personal experience, you should probably aim higher than the amount you have planted in your head right now. Most people, especially women and even more so members of marginalized groups will charge less than they should. A lot of this is down to mindset-blocks – see more here – but in this blog post I want to address some cold hard numbers for how you can reach your ideal price point as a new VA. The following formula is applicable to the hourly pricing model.

The Formula: EXPENSES/HOURS

There are a few factors to consider, namely your expenses. You didn’t quit your job to struggle or live under the bread line – so make sure you’re AT LEAST meeting your expenses. You may not meet them with 1, or even 2 or 3 clients, you may have a few clients that help you do so – but this formula can help you get an indication of where to start when charging hourly.

TASK STOP! ✋

• So I want you to take a moment to jot down all your ongoing business expenses. These are things like, digital subscriptions and tools, hardware, software, coaching, education (like the VA Starter Kit) and so on…
• Next I want you to jot down all your monthly living expenses. Rent, utilities, childcare, student loans (BIG ONE! You studied to work, your work should now pay for your studies), groceries, insurances, etc.
• Add up the total of both lists. Let’s say the total is: $2200.
• Tack on 10-15% for unexpected bills, up-charges etc. This brings us to: $2530.
• Then tack on 25% for leisure, clothes, trips to the movies, dates, you know, the stuff that allows you to live a fruitful life. This brings us to $3162.
• Tack on 25-35% for tax. If you know exactly how much tax you have to pay in your country/area – you can get more accurate here.
• This brings us to a total of $4269. Keep this number safe.
• How many days are you committed to working each month? Let’s say it’s 20.
• How many hours are you committed to working each day? Let’s say it’s 6.
• How many hours is that per month? That’s 120.
• Your formula would be: expenses/hours. In this scenario: 4269/120 = 35.5.

This would indicate an hourly rate of $35.

The great news? You’ll have a fair bit more take-home from that than you expect, you can deduct a lot, if not all of your business expenses. Even more so if you’re in the design field, a lot of entertainment can be considered deductible too.

Regardless of the formula suggested – I always tell new VAs to start at a MINIMUM of $15 per hour. So if your expenses/hours calculation brings you under $15 – then raise your rate to $15-20. Why? Because regardless of where you live in this world, you are providing expert services, ,and you deserve well above minimum wage. It’s also your duty to raise the industry standards when we live in a world where there is more slavery than ever before recorded. You may even find that $15 is far to low to live on in your location (hopefully our handy pricing calculator can help you figure this out too), in which case of course you’ll want to raise accordingly. 

Side note for those hiring VAs and for interested VAs  (can we make this go viral?!) 😉.

Now of course, the rate you come to will be highly dependent on your personal situation, if you still maintain another job and whether you have general entry point skills or super skilled specializations under your belt. If you have very specific advanced skills that you’re bringing to the table, you’ll want to keep the below in mind when setting your rates. Generally speaking:

• General skills like admin, calendar management, social media posting and simple canva design would be charging around $15-25ph (per hour).
• VAs with intermediate skills in a few more advanced areas like WordPress maintenance, blog writing, graphic design would be charging $25-50ph.
• Specialized VAs who do things like managing advanced web development projects, SEO, funnel building/strategy, FB ads, can start from around $50+. I know VAs who have started out at $50 and ended up at $350 per hour of consulting on FB ads and social media strategy.

Mind-hack-stop: Don’t live

within your means

Here’s where the problem with this formula comes though. I want you to use it to figure out your hourly rate – but I don’t want you to feel defined by it.

We humans tend to live within our means, which means we might catch ourselves saying things like ‘I ONLY NEED to make $2500 to meet my expenses/get by/live well’. When we state this, we will meet this number, and go no further. For sure we will live ok, but growth can be stunted if you stay in the mindset of ‘only needing’ so much.

Ways to battle this:

• Occasionally make (smart) investments that scare you a little and raise the amount you really do need.
• Practice adding a few hundred to your ‘need’ amount when you think or say how much you need to make.

If you NEEDED to make 5k a month instead of 2k, you’d do it. You brain is wired to meet your needs and so will find innovative ways to do so, whether by raising your rates, subcontracting, or adding a new service to your offerings, it will meet the need SO LONG as it really feels necessary to. So practice the art of believing you NEED more. Trust me! That’s why in the calculations above, I’d also veer on adding up the higher percentages to account for more than you ‘need’.

Are there other ways to price your VA services?

YES! Here we’ll talk about the three main ways that VAs price their services. As I said before, pricing is tricky as a new VA, that’s no surprise! It can be difficult to put a price tag on the value you give.

The Three Pricing Models Summarized

Hourly Based
Getting paid simply for the hours worked. You are expected to time your work and provide reports usually. Some clients won’t require reports – they are awesome and trusting. Keep them. I highly recommend using Toggl for time tracking! Be super detailed in your reporting at the beginning of any client relationship, you never know how picky a new client will or won’t be so have your ass covered. I personally recommend billing upfront for a set amount of hours, I know some VAs who bill at the end of a set, but this is far riskier – only do this if you know and trust the client and in any case, have a contract signed before any work commences.

When thinking about your hourly rate, you want to define three things:

• Will this give me enough income to feel supported after taxes/fees/expenses? (refer to the formula)
• Do I feel valued?
• Is this price in alignment with my current skill set?

Retainers
Retainers allow you to bill upfront at the start of every working month (or week depending on your agreement) a set amount that will cover the client for an expected amount of hours and/or outcomes. This is often a little more comfortable than hourly as you have the security of knowing you will be paid each and every month. Your client also feels secure in knowing you are available to them. Hourly clients can be known to drop in and out leaving you with dry spells so this definitely is a welcome change to that system. You eventually want to seek out clients who need ongoing and long-term support but starting on the hourly model is completely fine and really helpful if you’re new to all of this. Again, a contract should be signed before any retainer agreement begins.

Value Based Pricing
This can totally be a tricky arena to master as a new VA and I’m not sure I would recommend it right out of the gate. It requires you to have a deep understanding of your skills, your client’s business, the risks of a given project, the tasks and knowing how long things are likely to take. Value based pricing is essentially charging your client a set amount by the project depending on the tasks at hand. However long the project takes is irrelevant as you are charging your clients based on the value you will bring them.

For example, Mary needs a sales page and funnel designed for her new product launch. Mary has an engaged email list of 2300 people. With Facebook ads leading to her sales page, she is likely to bump that up to approximately 4000. Mary’s product is $500 dollars. Based on your experience of working with Mary and her past conversion rates, you know she is likely to convert at a minimum of 2.5% of that 4000. This is likely to pull in $50k in sales. What is your time and effort of putting together a kickass sales page and funnel worth when you can show these figures to your client? A lot more than what you’d be able to charge on the hourly model!

You could quite clearly define that your value is worth, say 15% of her overall sales (depending on how long you’ve worked with the client you can negotiate the rate) but this would mean the client gets charged $7500 for this particular project.

However – ‘value-based’ can also be considered ‘project based.’ this would be for things like website design and development, where you may have an easier time setting a price – perhaps you even offer set packages for websites.

Whichever way you go with this, be sure to charge a minimum of 50% upfront, and 50% on completion to protect yourself from working and not getting paid. Sign a contract as you would for any other type of pricing arrangement.

What do I recommend to new Virtual Assistants?

There will be times where you’ll get on a call with a prospect and you’ll just mutually fall in love. Sometimes the client will say outright that they want to hire you on a retainer and that makes the sales process much easier on you. However, more often than not you’ll have to work on your power of persuasion by showing them the value you can bring to their business and life.

The best solution I have found to do this is to build a bridge between hourly and retainer pricing. Offering clients a paid trial period of 5 VA hours. This is a low-cost, low-risk investment for a new client to take, making it easier for them to give your services a try. Make sure you charge up-front for the 5 hours. During those 5 hours of work, your goal is to wow them into submission aka make them happy, be a great listener and communicator and do a great job. At which point you can much more easily prove to them how much fun it is going to be working with someone like you and to move that conversation on a retainer agreement quicker.

NOTES AND ADDITIONAL TIPS:

Raise your rates $2-5 at a time every 4-6 months as you pick up new skills and get more efficient at what you do. You can choose to honor your existing rates with some clients or gradually make even more incremental increases as you go, with open communication at all times.

Get really comfortable saying your rate out loud. If it doesn’t feel good when you do, ask yourself a) is it because I’m lowballing and I KNOW this is gonna suck? or b) is this feeling too high for where I’m at? – if it’s the latter you must establish if this is really the case, our brains make a habit of keeping us playing small. Either way, don’t be afraid to face the feelings head-on and examine them thoroughly, like I said, above all else, YOU need to feel comfortable saying your rates out loud.

TOOLS AND RESOURCES:

• Contract creation and digital signature tool and.co
• Time tracking tool, Toggl
• Easy to use invoicing and client management tool, Dubsado
• My FAVORITE book on money mindset