Knowing what to charge is one of the biggest questions a new VA has – and this is totally understandable. After all, you’re running a business, so you want to make money, but you also don’t want to price yourself out of, or to far below, the current market rates. So how exactly can you figure out what to charge in your VA business?
A good place to start is with the industry average. Currently, the industry average in the UK is £25-£35 an hour. If you want to keep it super-simple, it would be a great idea to price your hourly rate somewhere within that scale.
Remember to factor in everything
However, there’s a few things you need to factor in, when deciding on that hourly rate. The first is to remember to take Tax into account, and the second, those things that you can’t bill customers for.
It’s easy to take the amount you want to earn per year and divide it down by your working hours, to get an hourly rate. But you’ll need to minus out approximately £30 of that figure, if you’re paying Tax and National Insurance.
Another mistake often made, is to forget there’s always going to be hours that can’t be billed to clients. This includes activities you carry out that directly relate to the running of your business – such as invoicing clients, learning new skills and marketing.
It’s also worth remembering that those benefits you got from working for someone else, are now your responsibility. Things like sick pay, holiday pay and pension plans, are all things that you can’t bill a client for, but you do need to factor them in, when working out your hourly rate.
What you feel you’re worth will be reflected in your charges
When you first start out, you may want to keep your hourly rates low, as you don’t yet feel confident or experienced enough to charge a higher rate. You do need to be able to feel you’re worth every penny of your fee, but you also need to make sure you’re not just highlighting your inexperience. Therefore, it’s a good idea to get your hourly rate within the industry average.
However, you do also need to be comfortable stating your charges – whether you’re quoting hourly rates, ad-hoc rates or monthly retainers. One easy way to do this, is to get used to saying them confidently out loud. Another good idea is to price a lower, introductory fee, whilst you settle into your business, and then up this fee, as your confidence grows.
If you believe you’re offering value, it’s right that you should be charging a rate that befits that value – so spend time getting clear on what value you provide to your present and future clients – and then price accordingly.
How to communicate that confidently to your client
You do need to be able to communicate that hourly rate in a confident manner to your clients. Again, this is where practicing them out loud will be of benefit. Another way to get confident relaying your prices, is to focus on the benefits your clients will get from working with you. This helps you remember your own value, as well as getting the benefits of working with a VA over to your client.
Finally, confident communication of your charges means dropping the need to justify them. Your clients need to understand that what you offer, is an investment in their business, not a cost. After all, what cost implications would they and their business face, if they DIDN’T hire a VA.
What are your thoughts about pricing your VA services? Is this something that you’re comfortable with, or do you still struggle to get your charges right? Why not share your thoughts and experience, in the comments box below?
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