Though our utility bills go up annually, the price of a loaf of bread and a pint of milk increases, and train fares seem to go up every other day, many VAs aren’t keen to increase their hourly or project rates, even if they’ve been charging the same amount for a number of years.
As we head into 2023 with recession looming, it is time to look at how to increase our rates even a small amount to ensure that our business can survive the cost of living crisis.
This is probably going to be a little controversial, but in my experience, it’s the businesses who are unwilling or unable to pay you a fair hourly rate that are the hardest to work for…
The majority of small business owners have relatively small budgets, so it is perfectly understandable that they want to ensure that any money they are investing in remote business support professionals is cost-effective. Businesses with larger budgets, on the other hand, tend to appreciate a little more that they have brought on freelancers to patch skills gaps in their business, and are willing to pay appropriately in order to plug those holes in their business.
If you would like to increase your rate, it’s worth doing a little homework to make sure that your new proposed rate is competitive and can be justified to yourself.
It is important that you recognise that you are worth your hourly rate – either because it is directly associated with your essential business outgoings (insurance, software costs, etc.) or because it is in line with fellow VAs who offer the same products and services. As a general baseline, we always refer back to the results of our 2018 ‘Time to EleVAte’ Survey of international and UK-based VAs where we found that the most common hourly rate charged by survey participants was £25 per hour, though many respondents charged more than this, and we believe that in 2022 the average hourly rate is closer to £27 per hour.
Unfortunately, you’re always going to hear phrases like ‘I could get that much cheaper elsewhere!’ or ‘That’s too expensive for me’ from clients and potential customers when you advise of a price rise. However, don’t feel that you have to work hard to justify your value to a potential customer – if they can’t afford your services then that isn’t anything to do with you, that is their business issue. If it is work that you would particularly like to take on, feel free to consider lowering your hourly rate but my general advice is not to undersell yourself; there are customers out there who really do value your worth and would be happy to pay your hourly rate/package rate without batting an eyelid, and when a business relationship starts off with you feeling respected and valued it is far more likely to have longevity and be successful.
If you are planning on increasing your rate, give your existing customers notice of the change so that if they can’t afford your services they can move elsewhere. It might be that you consider offering some of your long-term clients a slightly more preferential rate (i.e. the opportunity to get a slightly lower hourly rate by bulk-buying hours in advance), and let them know that that is the case. Most business owners respect the fact that business expenses change over time, so should be relatively understanding of your need to increase your rate – indeed, it is likely that they have increased their own at some point over the last few years!
As I mentioned earlier, from experience I can say that the customers who fight for every single penny of the hourly rate that they pay you tend to be a little more challenging than larger businesses. However, it can be incredibly rewarding helping SMEs and sole traders to improve their productivity and efficiency, so if you are planning on increasing your rates this year, make sure that your notification email to clients is clear, concise and understanding of the fact that small business budgets don’t cover a lot!
You are absolutely worth the hourly rate that you charge, and customers who make you question that are often better off left to fend for themselves – they’ll soon learn that quality doesn’t come ‘cheap’.