Welcome to another episode of the podcast that teaches you how to be a ridiculously good virtual assistant.
Today I want to talk about rates. It’s a common topic of discussion with VAs at all levels of their business – and we all struggle with it at times.
Today’s Quote: Don’t fall into the irresponsible trap of setting low prices. It will kill your business cold. Low prices attract cheap customers with luxurious demands. ― Mac Duke The Strategist
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Connect with Tracey D’Aviero, VA Coach and Trainer
Episode Notes:
We talk often of setting rates in our Virtual Assistant business.
I see lots of you posting questions about how to charge for this service or that service, and I always come in with the same advice.
Do the math for how much your services will be – don’t just pick a number out of thin air.
When you ask someone in a group how much you should charge for a particular task or service, you are picking a number out of thin air.
If your business is going to be successful, you need to make sure that what is coming in will cover what is going out, and then of course you need to leave room for some profit as well.
As a service based business owner, we can often make the mistake that what we charge is what we make – and then we don’t leave room for the things that we need to run our business well.
You don’t need to gauge customers, but you do need to run your business like a business.
So let’s talk about a few of the problems that VAs have with setting rates properly.
1 – Calculate Your VA Rates By Doing the Math
The first mistake I see VAs make is not doing the math to set their rates.
It’s not hard to do, and yet so many people skip it.
Figure out how much you need to make. That means gross revenue.
How much you need to pay yourself, how much you need to pay expenses, and how much you want to budget for other things like training, professional development, events, and so on.
When you work with real numbers you can actually build a profitable business and you can get help when you need it, you can learn new things, you can go to events to find clients.
Do the math and I think you’ll find that you either a) deserve a raise or b) have money to get some of that support or training that you want.
2 – Starting Your VA Rates Too Low
The next big mistake I see VAs make is starting their rates way too low.
If you are doing this or have done this, don’t worry you are not the only one.
This is super common. It’s hard to ask people for money.
Especially for yourself. We always undervalue ourselves.
Imagine if you were setting rates for your clients, or your spouse, or a friend. You would never undervalue them the way you undervalue yourself.
It’s a mindset issue – and doing the math as I described previously can really help you set better rates and feel good about it.
What happens when we start our rates too low? Or maybe I should say how does that happen? Well either we haven’t set them right to begin with or we have said yes to a client who told us they couldn’t afford our regular rate and therefore asked for a discount. Because we don’t want to turn down the business.
The number of times I have heard VAs tell me ‘they don’t have a lot of money, and I want to help them.’ and then struggle in their own business, is staggering.
Why we value others over ourselves I’ll never know. I’m not a psychologist, but I know that if you aren’t charging enough for your services, you are going to suffer. Your client will not, because they are getting what they want. How is that fair?
When you start too low, it’s really hard to do increases. Which brings us to our next point.
3 – Never Increasing Rates for Your VA Clients
I have helped LOTS, I means lots, of VAs increase their rates. Because they don’t know how to do it.
So they just don’t.
They are afraid of losing the client.
Without my help, there are probably thousands of VAs out there who don’t raise their rates, ever.
Here’s the thing – everything increases in price. Look at the price of a loaf of bread in the grocery store these days. Outrageous. But we pay it because we need it.
Everything goes up in price after a time. Your rates have to also.
I say this all the time – I charged $25/hour for my VAs services back in 2008. If you are charging $25/hour right now in 2024, it’s not enough. It’s time to increase your rates.
If you have been working with a client for more than a year, it’s time to increase their rate.
I don’t believe in raising rates often – once a year suffices, unless the scope of work you are doing for a client changes – but to keep status quo, you can still raise rates once a year for no reason at all.
Which leads into my next point.
4 – Explaining Rate Changes to VA Clients
One of the reasons that VAs don’t like to raise their rates is that they feel the need to explain why the rate is changing to their clients.
In business, you don’t need to explain things as much as you think you do.
I always say it’s a woman problem, because that’s how I see it.
Men don’t overthink things in business, for the most part.
If there is an increase needed, they’ll just do it.
Women seem to have to convince people that there is a very good reason for something before doing it.
We put a lot more thought into everything, but especially money.
And for sure, lots of Virtual Assistants do not like to talk about money.
I remember doing all kinds of sales conversations early in my VA journey, and being scared to ask for the sale at the end of the call.
I gave up so many clients because I couldn’t simply ask them if what we discussed made sense to them and if they wanted to start working together.
Instead, I would end my calls with ‘I’ll put together a proposal and get that to you.’ Totally avoided the money conversation.
The client would then get the proposal, make their decision without even another conversation with me, and then I would not get the client.
You have to be able to talk about money with your clients. But you have to do it in a way that is comfortable for you.
When I changed the way I did my sales conversations – guess what? I got clients.
What I do now is what I teach VAs like you to do – talk about the client’s needs – ask them questions about what they need help with, what is important to them to get help with – and then ask them what their budget is.
It makes the conversation about money easier for both of you.
The client has a budget they are willing to spend. You can let them know what they can get done within that budget based on your rates. Easy.
You’re not trying to sell a client anything. If you are, then you will probably struggle.
Be upfront and talk about it right from the start.
And then when it’s time raise rates, don’t explain why they need to go up. It’s just business. You just need to inform them with a reasonable amount of notice that the rate is going to change.
When I work with VAs to increase their rates, we start with new clients at a new rate. That’s easy. Then we assess the current clients and decide how to increase them – especially if you have been working with them for a while and you haven’t raised their rates.
Big rate increases can be challenging, but it is easy to do it professionally. I can help make it easier.
The last thing I’ll talk about today regarding rates is packages.
5 – Creating Packages
So many VAs think that they ‘just need to create packages’ and that will solve all their business problems.
They think once they have packages they can stop tracking their time (you can’t).
They think once they have packages they will make more money (not necessarily)
They think once they have packages they won’t have to talk about money with their clients (you still will).
Packages can be a great idea, but you have to create them for the right reasons.
You create packages so you can offer a specific set of services to clients.
You create packages so you can simplify your billing.
You create packages so you can offer tiers of services (usually 3).
You don’t create packages so you don’t have to track your time anymore or avoid money conversations with clients.
In fact you will have more money conversations with clients because they will want to know what they get for the package, and how it works. A lot of clients are conditioned to pay VAs by the hour.
You will also need to keep tracking your time to make sure that you aren’t giving your time away by not working efficiently.
There you have it, 5 mistakes that Virtual Assistants make with setting rates.
If you are making any of these mistakes, the good news is they are easily fixable.
When you start by doing the math, you know WHY your rates are set where they are, and you will be able to see the impact of discounting or not charging enough.
It’s not difficult to do, and it’s a great exercise if you have never done it. You can pick up my rate calculation package at my website. I’ll drop the link in the show notes for this episode for you.
Pick up your Rate Calculation Package here:
And let’s circle back to today’s quote Quote: Don’t fall into the irresponsible trap of setting low prices. It will kill your business cold. Low prices attract cheap customers with luxurious demands.
When you work with clients who are paying low rates, they are often high maintenance. Especially because if you negotiate a lower rate with them, it’s often their ‘highest’, which means that it might be a lot for them and they will quite often be very aware of that. It can make doing their work a challenge if they are always second guessing how you spend your time and their money.
If you have worked with someone like this you know exactly what I mean.
Find clients who say YES to your rates, your proper rates, and who value you and your work, and happily pay for it.
That will rarely be the low paying clients. Set your rates where they need to be, change them when necessary, and keep your business vibrant and profitable!
Do You Need Help?
If you need help setting your rates properly for your VA business, be sure to get in touch with me. I’m here to help.
It’s the only reason I’m here at all, as you know. To help you become a ridiculously good VA.
I have helped hundreds of VAs who are stuck get moving. I’d love to do the same for you.
We can work together privately, or in The Virtual Circle, my monthly mastermind group, or in my Plan to Profit group coaching program, or you can enroll in some of my self study trainings. I have lots of options to move your forward. Check them out in the show notes for this episode. Thanks for tuning in this week! I’ll see you next time!
What You Need to Do Next:
Let’s work together privately to get you to your really big goal. It’s the fastest way to get results and we can start right away. Learn more about private coaching here.
The Virtual Circle (TVC) is a monthly mastermind group for Virtual Assistants just like you. We get together 3 times a month for group Zoom sessions to talk about what you are struggling with, working on, or celebrating. It’s a close knit community of your VA colleagues that provides the best kind of support for your VA business. Learn more about TVC here.
My self study program Getting Started as a VA can help you get your VA business started easily and quickly too. You can sign up right away and be on your way to getting clients by the end of the program, with all the right foundations in place. Check out the program here.
Click here for more tips to help you with your productivity and time management in your Virtual Assistant business.
Reach out to me if you need to talk about where you are stuck and what the right option might be to get you moving. It’s literally all I’m here to do is help you get to where you want to go. Book a complimentary Cut to the Chase call with me here.