Calculating Your VA Rates Properly is Critical To Your Success

Calculating Your VA Rates Properly is Critical To Your Success

Do you know how much you need to charge to keep your VA business operational, profitable and sustainable? If you haven’t taken the time to do the math yet, it’s time!

If you are working with clients right now but you are still struggling with making money, you need to look at what you are charging clients.

I was extremely discouraged this week to witness a conversation taking place in a VA group.

A VA reached out for some advice around what she called logistics.

She has two clients that she is working for 20 hours a week each – a total of 40 billable hours a week. Great, eh? I think that’s wonderful to have a full VA business with just two clients!

Her concern was that she didn’t have time to add another 20 hour/week client, but she needs to because the 2 current clients are not earning her enough to pay her bills.

The logical answer for this response is that her rates are too low and she needs to raise them. If you are billing 40 hours a week and you can not pay your bills, it’s completely obvious (to me) that you are not charging what you need to charge.

She said that she was charging the going rate for VA work in her area, because her clients would not pay more (and yes, her rate is MUCH too low to operate a business).

Some VAs stated that perhaps her bills were too high (not that her rates are too low). Ummm … here’s the thing … if you know how much you need to earn in your business, then you must set your billable rate accordingly.

You can’t just pick a number out of the air.

You can’t just work for whatever a client says they will pay you.

And you can’t work 60 hours a week just to make ends meet.

If you are running a business, you get to make the decision about how much you charge.

I was not discouraged by her request for advice. I was discouraged by the fact that she thought that the answer was to add another client.

And don’t get me wrong, I am not criticizing this VA at all. She is absolutely not the only one with this mindset. I am so happy that she reached out to get advice, because many VAs just never do.

I was also annoyed by the absolutely awful advice she was getting from the other VAs in the group – to get subcontractors. When you can not pay your own bills, you NEVER bring someone else in to your business.

And if your rate is too low to begin with, you can NOT pay someone else even less per hour to do the same work.

The only logical solution in this situation is to raise your rates.

Yes, that might mean that you lose clients. But you will burn out and lose your business entirely if you don’t.

Clients are everywhere. We are virtual – we do not have to settle for clients who do not see our value, or who tell us what they will pay us.

Clients are allowed to have a budget, of course, but it is NOT their right to tell us what we can charge. They can only tell us if they agree to pay it.

Calculating what you need to charge to make your business sustainable is your right as a business owner.

In fact, it’s your responsibility as a business owner.

Do it properly, and then craft service offerings that provide value and support for your clients.

Then go out and find those clients. I promise you they are out there, and you and your business will be in better shape because of the math you do!

If you need to figure out how much your billable rate should be, download my free Rate Calculation Package and figure it out! It will show you the variety of ways you can bring revenue into your VA business so you can make sure you are charging the right amount starting now!

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 a 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.

3 Things You Must Know Before You Create Virtual Assistant Packages

If you don’t have a few things in place before creating packages for your VA services, you will have trouble developing packages that work for you.

I hear Virtual Assistants talk a lot about creating packages in the VA groups and forums. But there is often confusion around what that actually means.

The first thing you should consider is why you want to create a package to begin with.

If you think it’s because you can make more money than charging hourly, you are not technically wrong, but that’s not really the best reason to create packages.

The way to make more money in your VA business is to get better at delivering awesome services to your clients, so you can get more work from your existing clients, and you can get more clients, period.

But packaging your services is a great way to do a few things, such as:

  • Control the profit in your business by setting rates that are fixed, with profit included
  • Avoid scope creep by defining exactly what it is you do for your clients
  • Clearly communicate to your clients what you will do for them, and how much it will cost them
  • Earn more money per hour by getting faster / better / more efficient – instead of less money because you stop billing by the hour.

Packaging your services takes a lot of grunt work to begin with (if you do it correctly!), but it can be  a great way to start to build and grow your business.

You must know (or have) 3 things before you offer your clients package pricing:

  1. A complete list of services you will provide for your clients.
  2. Procedures for each task that is included in those service offerings.
  3. An accurate estimate of time that it takes you to do each task.

Talk about grunt work!

If you don’t have these things in place right now, the you are not ready to create service packages.

But the good news is, you can start getting these things ready right away – by tackling one task at a time, you can start to create the list and the procedures, and add to it every time you do something new.

List of Services

To put together a package for your clients, you have to define specifically what you are going to do for them. This is usually a combination of things that go together, usually by category (ie communication,  or marketing tasks) or by specific task (ie client care – handling contracts, payments, emails, scheduling, etc).

Do it now: Start to make your list. You must define exactly what you can do for clients, before you can build a package from it.

Procedures

Yes, this is the grunt work! But really it’s just writing down what you do and when you do it. Doing a newsletter for someone in Mailchimp? Write down the steps to do it. Step 1, Step 2, Step 3. Don’t leave anything out. Procedure documents help you to free up brain space when you go back to do a task a second time – to make sure that you do it the same way, every time, and that you don’t leave out any steps. Procedures are very important when you are bringing in subcontractors – and if you business grows quickly, you won’t have time to do it then.

Do it now: Start with the next task you complete. One at a time – slow and steady wins the race! You’ll be surprised how much brain space you free up, and also you can build a procedures file pretty quickly!

Time It All

The most important part of creating packages is to get the pricing right. To do that, you must calculate the time it takes you to do every single task in your business. That sounds daunting I know, and it should be! You probably do a lot! But it’s essential. So take those procedure documents and add up the time it takes you to do each step, to get your billable task time. It’s also a good idea to add in 20-25% of extra time to allow for tech issues, or other problems. Speed is not the key – consistency is!

Do it now: Time out everything you do. Be sure to eliminate distractions when you work so that you are focused on the task at hand. Multiply your time for each task by your billable rate to get your ‘per task rate’.

Creating packages is a great way to grow your VA business and provide clear services to your clients for a fixed amount.

Everyone loves clarity, and packages – done right – gives both of you that clarity.

If you want a more indepth lesson on creating packages, have a look at my self study lesson How to Package Your Virtual Assistant Services. It walks you through the entire process so you can get your packages created and start making more money today!

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 a 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