Are You Still Charging by the Hour as a Virtual Assistant?

When you started your Virtual Assistant business, it was probably easy to charge your clients by the hour.

But in order for your business to grow and be successful, the ‘trading time for money’ model quickly falls short.

Why?

For one thing, there are only so many hours in a day/week, so you can quickly max out the amount of money you can make in your business.

For another thing, it’s much harder to raise your rates with your current clients. And that means if you get so busy that you need to bring on subcontractors to help, you may not be able to earn enough to keep your business successful.

These are just two simple reasons why charging by the hour doesn’t work (there are many!).

So if this is your business model, how do you fix it?

Well that’s relatively simple. You start putting together package rates for your services.

Here’s how you do it:

1. Determine how much your hourly rate needs to be (you will base your package rates on this hourly rate, so it’s still important to figure out). If you don’t know how to calculate what your hourly rate should be, use my rate calculator here.

2. Decide which services you are going to provide to your clients. This is easiest if you are working with just one industry – because these clients will need similar services in their businesses – so try to decide which industry you will build your packages for.

3. Calculate how much time each of the tasks will take within those service offerings. Don’t undervalue your time here. Allow for technical difficulties or other problems to come along. Often a good rule of thumb is to figure out how much time something usually takes you (ie doing a client newsletter) and then add on a cushion of time to allow for problems that may occur from time to time. Note: this cushion will also act as your admin time if you hire subcontractors to help you work, so don’t leave it out!

4. Multiply your time estimate by your hourly rate. This will be your flat rate for this task when you need to do it for a client.

Now you can mix and match your services to provide the right packages for your clients, and you know you will make money and be able to build your business by doing this exercise.

I use a Post It Note system – I write each individual task on a post it note, and I include the time it takes to complete as well as the flat rate I will charge clients to do it.

This system makes it very easy to give clients estimates while on a consultation call. Simply ask them what they need, and give them a quote. It really lends a lot of credibility to your expertise to be able to do this.

Package pricing doesn’t have to be a cookie cutter approach – quite the opposite actually. You can let your clients know that you will customize their service offerings easily. If you have pre-determined packages, some clients can get hung up on the things they don’t need.

By being aware of what your ‘billable’ time is for each of the services or tasks that you will provide for your clients, it is much easier on your sales conversation – and your invoicing too!

Look over your business model and do the pricing exercise. I think you’ll see more profits in your future!