Welcome to another episode of the podcast that teaches you how to be a ridiculously good virtual assistant.
Today we are going to talk about why you should consider having your Virtual Assistant clients prepay for your services.
Today’s Quote: A budget is telling your money where to go instead of wondering where it went. – Dave Ramsey
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Connect with Tracey D’Aviero, VA Coach and Trainer
Episode Notes:
To prepay or not to prepay?
It is a very common question in Virtual Assistant circles.
Some VAs start off getting their clients to pay up front. Some VAs make the switch at some point. Some VAs always get paid after work is done.
What you will do is up to you. It’s your VA business. I can’t tell you what you should be doing.
But I will tell you today why in my opinion it is better to get payment up front.
There are a lot of good things that can come out of getting paid for your services ahead of time.
I am only going to cover three today, but I bet they will help you decide that it’s right for you.
1 – Assurance of Payment
The first reason that it is a good idea to collect payment ahead of providing services is, well, so you will be sure to get paid.
One of the reasons that some VAs move to prepayment is because they got burned. It is part of the reason the I moved to it, I have no problem admitting that.
We often introduce policies and boundaries to our business as a result of things going wrong.
Chasing money is wrong. When your clients work, they get paid. You need to have that same expectation. You have plans for the money you earn.
When you get prepaid, the client pays you before services are rendered.
It’s not unusual, especially these days. You have to pay ahead before you get a lot of stuff. Amazon, Ticketmaster, and even McDonalds.
Not all service providers require prepayment, but think of it as the client reserving time in your schedule for the coming month, and they need to lay to reserve it.
I can tell you a lot of sob stories about VAs doing work and then not getting paid for it. Way too many as a matter of fact.
There might be a lot of reasons why that happens but make no mistake, it sucks. It has happened to me more than once, and it could happen to you.
Protecting yourself is one of the best things you can learn to do as a business owner.
Making sure you are going to get paid is really is what I consider to be the main reason for you to change your policy around billing today.
2 – Set Expectations
You are a business owner. You are not someone’s assistant. Well you are their Virtual Assistant, but you are not their employee.
When you set the terms for payment, especially prepayment, you are asserting your position as the client’s equal.
You get to tell them when to pay you. They don’t get to decide that for you. They get to do that for their own business.
Imagine if you had a client whose customers prepaid them, and one of those customers tried to tell them they would pay afterward. Red flag! Your client would never say yes to that, and you don’t have to either.
Setting expectations is important is everything you do in your VA business, but when it comes to money, it is even more important.
Your client will know that you are a business operator and that you are in charge of what happens with your policies and terms.
The one thing you have to do is be confident in your decision to collect payment in advance. If you are wishy washy about it the client will not have those expectations set.
Just like setting your rates, providing task estimates, and setting and holding all of your business policies, terms and boundaries, it’s up to you! You set your rates and decide which clients to work with based on what they are going to pay you.
I can help you with setting your rates properly and setting your business policies, and even help you with what language to use to communicate money stuff with your clients.
3 – Getting the Work
The last reason I’ll cover today is simply a workflow reason.
When a client pays you in advance there is a better chance of them sending you the work you need to do.
How many times have you heard that a client needs so much help, and then it is like pulling teeth for then to send you anything?
Always remember that when our clients hire us they are usually overwhelmed, and we might be adding to that overwhelm as we try to get started.
It’s another reason that I suggest getting ongoing important work tasks to do from the start.
When you are doing ongoing admin or marketing, you will need to communicate with them at least a few times a week. With projects, a week or more can go by and you don’t create any kind of work flow that way.
Getting the work can be helped by them already having paid for it.
And on that note, don’t roll over time. Don’t let clients use hours over more than a month. If they don’t need 20 hours a month yet, don’t bill them that.
Start with 10 and then increase it. Only bill what you know you will use for their work. Use their budget wisely and in the best way possible for them.
All right. Are we getting it? Understanding it? Ready to do it??
Okay… so, prepayment. How does it work?
Your client can purchase a block of hours (that will be used in the coming month!) or they can buy a package of services that will be delivered in the coming month, or they can buy a project which starts this month.
They pay, you get to work.
You keep track of time or tasks and you give them weekly updates to let them know how you are managing their time. Not detailed time reports, just a summary update.
All clients want to know that you are managing their money well, keep them informed.
If you start running short tell them immediately. Turn down work or defer it till the next month instead of billing them a second time in the same month. If you are doing what you both agreed to at the frequency you both agreed to, you should be able to complete it on budget.
I will talk in another episode about what to do if things go off the rails, but I think you get the gist!
I also talk in another episode about how to estimate a client’s service needs and how to bill properly for them. I’ll tag that episode in the show notes. Be sure to check it out.
I’m going to leave this episode right here for you but I want to circle back to today’ quote from Dave Ramsey.
A budget is telling your money where to go instead of wondering where it went.
When you ask for prepayment, your client is budgeting their work with you. You agree that xyz needs to be done this month. You agree that will cost the client this much. That becomes the budget for both of you to work with.
It makes things so clear for both of you. I highly recommend doing it.
And I can help you get it detailed out for your VA business. Services, rates, packages, client estimates, time management … It’s all part of doing this well.
Need Some Help?
This is exactly what I help VAs do. As a Virtual Assistant coach and trainer, I help you set yourself up for success, helping you fix the specific things that are going wrong in your business. When we work together either privately or in a group we talk specifically about your business and you – there is no one stop solution for everyone when it comes to service businesses like VA businesses.
I’ll help you get clarity around your issues, and cheer you on as you walk through the steps to fix them.
I’ve helped hundreds of VAs through their challenges and got them on their way to growing their business and the lifestyle that they dream of.
I’d love to do the same for you.
You can work with me privately, or you can join The Virtual Circle, my mastermind group for Virtual Assistants. Check it out at www.YourVAMentor.com/TVC (the virtual circle) – I bet it’s exactly what you need to start running the VA business you dreamed of.
Reach out to me if you are interested.
That’s all I’ve got for you this week, see you next time!