by Lisa Taliga
It’s that time of the year when I sit down with my accountant and see how much money I’ve earnt over the past 12 months. It’s been a profitable year – my most profitable yet. If I had known that I could be making this much money from the comfort of my own home, I would have started this business much, much sooner.
Why am I telling you this? Because looking at those figures, I have something very important to tell you. My business would not be anywhere near as profitable if I had not set my rates to the right level. Don’t get me wrong, I am not overcharging by any means. But what I AM doing is valuing my time and expertise. And that doesn’t come cheap!
When you’re starting out in your Virtual Assistant business it’s tempting to charge a low rate to bring in business. It’s easy to make the mistake of thinking that you won’t have many expenses and overheads because you’re working from home. Plus, you just want to get some clients, right?
If you engage clients at a rate that is not high enough to cover your expenses, retirement funds, the time spent on the project AND make a profit (after all, going into business is about making a profit), then you may as well not be in business.
I’m sorry if that sounds a little harsh but I want you to be successful in your business. In order to be successful your rate must factor in:
1. Your expenses and overheads
My expenses and overheads cover the whole spectrum of computer hardware/software, office supplies, utilities, marketing, insurance, taxes, web hosting, accounting and bookkeeping fees, phone and internet costs. I also regularly pay money into a retirement fund so that I will be able to retire comfortably!
2. Your time
Your time is precious and you need to charge a reasonable rate to reflect your expertise and the value you’ll be bringing to your clients.
Of course, there will be times where you’ll be asked to provide an overall project estimate. You may get this wrong, underestimate the time you’ll need to spend on it and end up putting in a few unbillable hours. That’s OK, just so long as it doesn’t become a habit!
3. Holiday and sick pay
Remember that you won’t be working 52 weeks a year, every year. As an employee you get paid for sick leave and annual leave. Now that you’re self-employed, you’ll need to allow for your own holiday and sick leave. Therefore you need to charge enough to cover this aspect as well.
These are the main things you must consider when setting your rates.
If you are looking to work with an already established VA and have them outsource work to you as a shortcut to working from home, then remember that you won’t be getting paid as much as you would if you were working directly with the client. That’s because the VA that is outsourcing to you has to cover marketing expenses and client administration, and so will be paying you less than the full hourly rate.
I recommend checking out other Virtual Assistant websites and getting a feel for the market rate in your particular location. Rates will vary according to the individual VA’s experience, location, and the services being provided. Don’t feel that you have to charge the same as other VAs, but realize that if your rates are significantly higher, you must work on what makes you and your business stand out.
So take a pen and paper, sit down and do some hard thinking about your rates. It’s vital to your success!
(c) Copyright by Lisa Taliga
Lisa Taliga is a Virtual Assistant and author of ‘Freelance from Home! The 5 Key Steps to Your Successful Virtual Assistant Business’ and ‘The 7 Things You Must Know Before Starting Your Successful Virtual Assistant Business’. Get your free eBook and newsletter subscription to find out how to become a virtual assistant.