How Much Should I Charge Clients for My Virtual Assistant Services?
Content a glance:
Independent contractors like virtual assistants can charge for their virtual assistant services in a variety of ways. This can either be a fixed amount for an entire project, an hourly fee, or a sales commission.
Even if you charge for a fixed price for the whole project, you first need to figure out how much to charge. Unless you know exactly how many hours the task will take and what you need to earn per hour, you can’t figure out how much your fixed fee should be. If you’re familiar with the market conditions “how other VAs charge their services” then you probably know how to charge that is if you’re already been working as a VA for a few months or more. However, if you’re new or just starting a remote job, you may have no idea what you can or should charge. If you’re in this boat, try these two-step approach based on your expenses (1) and the marketplace (2). Based on your expenses, compute what your rate should be. To adjust your rate up or down, try to explore the marketplace.
To determine an hourly rate here is a standard formula according to experts. But first, you need to know your labor cost, overhead cost, the profit you want to earn, and hours you have worked on the project. To compute your hourly rate:
• add your labor and overhead costs
• then add the profit you want to earn
• after doing so, divide the total by your hours worked
! Example Hourly Rate Computation: My labor and expenses costs for the project is $50, the profit I want to earn is $150, and the hours I worked on the project is 20 hours. So, $50 plus $150 equals $200 divided by 20 hours for a total of $10 per hour.
To pay your expenses, pay yourself a salary, and earn a profit, this is the minimum you must charge. But this is dependent on the market conditions, how other VAs charge their rates. It’s either you can charge more or less for your services.
Pick a figure, to determine how much your labor is worth. It can be:
• same rate when you were an employee
• what other employees earn
• how much you like to earn
All the costs you incur to do business are your overheads. Examples are office equipment and furniture, medical insurance, travel expenses, advertising, and marketing costs, disability insurance, business-related meals and entertainment, retirement benefits, telephone expenses, income taxes, legal and accounting fees, self-employment taxes, clerical help, stationery and supplies, rent and utilities, professional association memberships, postage and delivery costs, and business insurance. Ask other VAs or you need to estimate these expenses to determine your overhead costs.
Profit is the reward you get for taking a risk of being in the business yourself. It is the earning you get over and above your overhead expenses and salary. Your salary is not your profit; it is the cost of doing business. It is usually expressed as a percentage of your total costs which is commonly rated as 10% to 20% profit.
Lastly, determine how many hours you will work in a year. Assuming you work 40-hours per week that is a maximum of 2,000 hours per year. If you want to take more than 2 weeks’ vacation, then these biliary hours will be less. Most probably, you’ll only have 1,000 to 1,500 hours each year since 20% to 30% of your time is spent on doing your tasks not billable to clients such as upgrading your skills, billings, bookkeeping, etc.
! For example, Juan de la Cruz, a freelance digital marketer. When he was an employee, he used to earn $60,000 per year. Now, he is a VA, he wants to earn the same annual salary with an annual overhead of $10,000 per year and a 10% profit that he'll work about 1,500 billable hours each year. Juan computes his hourly rate as follows: Salary plus overhead multiple by 10% profit divided by annual billable hours. So, $60,000 plus $10,000 equals $70,000 times 10% equals $7,000 so $70,000 plus $7,000 equals $77,000 divided by 1,500 billable hours for a total of $51.33 hourly rate. However, this is dependent on the market conditions, how other VAs determine their rates. This can be more or less.
Determining your hourly rate is not enough, you also need to figure out if this is realistic or not. Also, this is dependent on how much your client is willing to pay. How?
• Contact Professionals – Consult trade association experts in a similar field that can help you determine this.
• Ask another VA – Socialize and communicate with other VAs. You need to find out how other VAs are charging. Network with other VAs online, post a question or poll on social media groups or in Quora. Email your VA friend to ask about their rates. Or inquire seasoned VAs how much they charge when they started this job.
• Talk to Potential Clients and Customers – Email them to ask how much they charge their remote workers.
Through this, you will find out that your “ideal hourly rate” is higher than what other VAs are charging. But if you are a highly skilled VA meaning with lots of skills to offer and delivers quality work then you can negotiate a higher rate. Many clients believe that they get what you pay for and are willing to pay more for quality work.
! Tip: Start out charging a fee low then gradually increase. Over time, you’ll be able to find a suitable payment method and fee that will enable you to get enough work while adequately compensating your services.
Simply means you charge not by the hour but a fixed price for the project. The advantage of charging your clients this way is you can predict your income much more easily. You can include packages for the various services you offer. This allows you to vary the rate. This allows you to increase your rates easier.
Instead of charging your client an hourly rate, you charged based on the value or results you create. Free yourself from the chain of time. Charge your clients for projects, not hours. To start billing this way, ask yourself “What value can I give to the client?”. But before you jump into project-based pricing, I recommend starting with an hourly rate. Until you are familiar with your virtual assistant skills and client project requests, only then you can charge per project rate.
Make sure you write a fee agreement. Once you determined or decided your rate, ensure you and your client enters a “written fee agreement” to professional and legal purposes. For information on creating a solid written agreement, read "Contract for Virtual Assistants" on my blog or buy a pre-written agreement on my shop.
No matter how you bill your clients for your virtual assistant services, an invoice template from my shop can help you invoice your clients easily. Make sure it is high enough to allow you the flexibility needed in your virtual assistant lifestyle. Ensure that you don’t let any client treat you like a full-timer. Communicate this to your clients, so that they will understand.
Hi, I'm Paul. If you enjoyed reading this article you might like to read also:
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