Now that we are half way through the 2023/24 financial year, it’s a natural time to start thinking about your income and expenditure (especially after the year we’ve had!). Some established VAs may be thinking about increasing hourly rates and/or package prices, but even if you’re new to the world of VA work and desperate to get started, it’s important to carefully consider your appropriate hourly rate and package prices now to ensure that you are charging your worth and being adequately compensated for your skills and expertise.
Here are our top tips for setting your prices:
1. Make sure you cover all of your business outgoings. Over the last few years, APVA have championed the importance of a fair hourly rate for VAs in the UK (and internationally). We review the average hourly rate of VAs every year in our annual VA Survey, and in 2019 we also carried out some research into the expenditure of VA businesses, and found that a VA working 30 hours per week and charging £25 per hour was potentially only ‘taking home’ £18.03 of that hourly rate, as the rest needed to be set aside to cover essential ‘business necessities’ that all responsible and professional business owners should have in place. These business essentials include (but are not limited to):
- Tax and National Insurance Contributions
- Professional Indemnity, Cyber and Public Liability Insurance
- Compliance registrations (for example, registering with the Information Commissioner’s Office and with the HMRC for their Anti-Money Laundering Regulations, if appropriate)
- Software/Hardware costs
- Office supplies
- Ongoing professional development training, etc.
These are all essential outgoings for a business owner, and need to be factored in to your hourly or project rate to ensure that at the end of the month, you are bringing in more than you are paying out for your business. Admittedly, there are always going to be odd months when expenditure is high, but it’s not financially viable long term to be paying out more than you are getting in.
2. Value your skills and experience – even if you are new to the VA world, don’t ‘devalue’ yourself by setting a low price point. Think of all of the years of experience that have contributed to the skills you use as a VA. Think of all of the training courses, the practice, the reading and the experience that has helped you develop and hone your skills. You are a skilled professional, and as such should be paid accordingly. Based on our 2020 survey results, 39.7% of survey participants advised that they charged between £26-£30 per hour, and a quarter of respondents stated that they charge in excess of £30ph. Though every VA is different, it’s good to have industry benchmarks to help position yourself and your hourly rates. We also strongly recommend not pricing below the industry average, as this price-point rarely corresponds with your skillset, experience and ability.
3. Be prepared to deal with the “you’re too expensive!” criticism – I don’t know a single VA who hasn’t heard the phrase, “That’s a lot of money!” or “I could get that cheaper elsewhere”. However, I can say from experience that the potential customers who do haggle the price down are often the ones who end up to be the most challenging! Think about this – most business owners out there looking to work with a VA or other remote business support professional are likely charging in excess of £30 per hour. They are requesting your assistance to help free up valuable time, or to complete tasks that they don’t have the skills or expertise to do. They are also business owners – just like you! If they are charging in excess of £30ph, why shouldn’t you? The products and services you offer aren’t somehow ‘less’ than what the majority of other business owners do, they are just different. Don’t be afraid to smile and walk away from the people who attempt to devalue the services you provide, and please don’t feel compelled to reduce your price just to win them over, as it’s rarely worth it in the end.
4. Repeat (annually!) – it’s worth thinking carefully about your hourly rate every year. If your outgoings significantly increase (due to insurance price hikes, an increase in the cost of utilities, etc.), then you need to ensure that you aren’t taking home less. As I mentioned earlier, the vast majority of your customers are likely to be business owners themselves, and as such understand the financial pressures of running a small business. Just ensure that you give them enough notice of potential price increases, or consider offering them a preferential package rate (as you know that they are regular, prompt payers – which is helpful!).
Whatever you charge, make sure that it is a fair and appropriate level given your unique skillset and the breadth of your knowledge and experience. Why be ‘cheap’ and not hugely cheerful when you can be paid fairly and know that you can cover your business outgoings as well as take home an appropriate income.