There are a few methods of pricing that most freelancers and virtual assistants adhere to for their services. The approach you choose may vary from project to project.
Early on in your virtual assistant career, you’ll have to decide on how much and in what manner you want to get paid for your freelance services. It’s an ever evolving number that will change as you grow into the job, but the fact of the matter is that you will have to come up with a real number that assesses your worth before you can accept any work.
This can be very intimidating at the beginning, but you will grow much more comfortable with it over time as it just becomes part of your regular negotiations with clients. A lot of new entrepreneurs and virtual assistants tend to undervalue themselves and their services. It’s very natural to be unsure of yourself and think that there’s no way you can charge market price for what you do. Pair that with an empty client list and bills to pay and that can have a lethal effect on your self confidence and self-worth bottom line.
Charge for the value of what the work is worth, never for your time.
In the earliest stages of your development, some argument could be made that you want to charge a little less for your virtual assistant services as you assemble your client roster and start to build credibility and a portfolio of work, but all you really need are a couple examples of what you can do and a testimonial or two from a client and you should be able to put yourself right in the financial thick of what a professional doing your type of work should merit.
How do you calculate the value of your time and energy?
There’s a sort of loose formula you can use to figure out what you need to charge for your virtual assistant services. A lot of different facets should factor into your overall pricing — there is always a cost to being in business. This is by no means a comprehensive list – there are almost always outside things that will pop up that you’ll need to be prepared for, but the following is a good start:
What tools will you need to provide your virtual assistant services?
Will you need special software to perform the assigned tasks? Maybe you find that your current computer is woefully underpowered for the video editing you’ve agreed to do? Not that you’d charge one client for a brand new computer, but it could be a legitimate operating expense that you have to factor into the overall cost of what your virtual assistant services require.
Will you need to contract any outside help?
Is it possible that you’ll need to hire any outside help to accomplish a task? If so, what are they going to charge you? This needs to be factored in to your overall fees.
How much money do you need to make each month for the business to break even?
This is strictly for the business to break even, not your entire life expenses. However, that takes us neatly to the next item:
How much profit do you need to make after breaking even to pay your personal bills and living expenses?
As much as you believe in the purity of the work, you still need to eat, no? The lights don’t keep themselves on. This is a good time to get your personal finances under control as well and account for where all the money does go. You’ll need to know what money is already allocated for rent/mortgage/utilities, etc, to understand what you’ll be bringing home.
What will your tax burden be?
As a freelance virtual assistant, you can count on approximately 30% of all revenue going straight back to the government in the form of taxes. Your virtual assistant service charges need to take this into account.
What is the market price for your virtual assistant services, at your skill level?
When you’re newly employed as a virtual assistant, your services will likely be worth less than they will become over time. Even if you’re the most stellar person at what you do in the world right out of the gate, without a reputation to hang it on, it doesn’t mean much to potential clients. That being said, you don’t want to grossly undercharge, even at the outset. Look at what other virtual assistants are charging for their services. Social media virtual assistant groups are a great way to feel out what others are charging and to get a sense of the range you can expect to get paid. Visit other virtual assistant websites and see what they offer and what they charge. Many don’t post their prices, but it’s still good to get a feel for your competition.
How much money do you want to make each month?
This is where we’re really getting down to it — what do you want to come home with after all of your business and personal expenses are paid? Don’t forget about retirement savings either. Not to get too into the weeds here, but you should aim for 5-15% of your savings for retirement, although the more you can the better.
Ultimately, ANY amount is good, especially the younger you are so the growth can compound over a longer time. That is a legitimate part of most 9-5 jobs and should be a consideration for your own, and should be factored into what you’re charging for your virtual assistant services. We’ll discuss this further in a future article.
How many hours do you want to work?
Some people are looking for a full 40+ work week. Some are juggling kids or another job and can only spare a smaller amount of time. Some just want a side hustle to bring in a little fun money. It’s one of the greatest things about freelancing — the choice is yours.
Don’t forget to factor in all of the extra hours you work when you’re not sitting at your desk. Inspiration can strike anywhere, and you may find yourself strategizing in the shower or in a grocery store. There’s also phone calls and video chats and emails and texts to respond to. This is all time spent for the client, and if you don’t include it in your service estimates then you’re going to end up doing it for free.
How much do you need to charge for your virtual assistant services to break even + reach your desired income?
This is the big one — and one that you’ll likely endlessly tweak over time. Obviously, the key is to be realistic. If you want to make ten million dollars per year and you only want to work ten hour weeks, you’ll just need to charge $20,833 or so per hour. No big deal, eh? Good work if you can get it. Of course that doesn’t include expenses…
Every client is different and every project is unique, and that will often dictate the billing style you choose
Confused? You’re not alone
This all seems like a lot of considerations to manage, but it will all come together and start to make sense eventually, and a great place to begin is researching what the median fees for your virtual assistant services are out in the rest of the world. It will vary by experience and location (i.e. New York City vs. Kismet, Kansas), but you should get a good sense of where to start. Over time you will hone it down to a number that works for yourself and your clients.
Styles of billing systems
There are several different ways that freelance virtual assistants typically charge for their services: hourly, by project, day rate, blocks of hours, and retainer. There’s no right or wrong way to charge your clients, though there are distinct advantages and disadvantages of each.
You can and should have a magic number here no matter which style you end up choosing overall, in case you are asked to work outside of the scope of what was originally discussed with a client (and you opt to accept — never forget that your boundaries and contracts are there for a reason) or for projects that might only take an hour or two.
One downside is that clients can sometimes be reluctant to give you money up front unless you specify that in your contract (and you should). It’s also an ironic twist that the better you get at your job and the faster and more competently you complete it, over time you make less and less per hour, since it’s taking you less time to perform the same tasks as before.
As you grow you will raise your rates but if a client wants to use you indefinitely, you’ll eventually have to broach the subject of fee increases (for Virtualcopia members — check out our “Sticky Situation” scripts for some great tips on exactly that).
Project billing is a great way to charge for your virtual assistant services in that you can get a (non-refundable) deposit up front, get paid at pre-agreed upon milestones along the way, and receive the rest upon completion. It is the exact opposite of hourly, in that you get compensated for being more efficient. If you finish ten hours under budget, the pay is the same.
It also helps the client see right up front what they can expect to pay overall, and are less likely to get disgruntled along the way with how long the project is taking and how much it’s incrementally costing them.
It’s also helpful for your own time-management and allows you to more accurately and comfortably schedule all of your client work in advance.
One hugely important key to project billing for your virtual assistant services is accurately estimating for yourself how long it will take to complete a project. If you underestimate, the odds of you renegotiating your fees in the midst of the project are next to nothing, as the contract has been signed and you’re on the hook to deliver what you’d promised. We recommend adding a little buffer in your proposal, as unexpected issues tend to pop up.
Day rates for virtual assistant services are just what they sound like — a client wants to book you for an entire day. Day rates are considered a premium in the freelance world. It books you for a solid day (or multiple days) where you focus solely on that client’s needs, meaning you’re unable to work on any other projects at the same time. This is also often a last-minute or urgent need for the client, and just like a rush fee, tends to skew a little higher in price. While some virtual assistants won’t charge any more than their hourly rate x 8 per day, most will charge 1.5 to 2 times their hourly x 8 hours for a day rate.
Blocks of hours
Similar to the day rate, you can sell blocks of hours to clients to be used at their discretion. The plus side is you take payment in advance in blocks of your choosing — 5/10/20 hours at a time. The downside is that you are somewhat at their mercy when it comes to the utilization of those hours. If you’ve sold several blocks of time to multiple clients that all suddenly need you at the same time it will be a scheduling nightmare.
The retainer is the golden goose of payment styles. You guarantee a client x amount of regular hours per week or month, and get paid for that time whether you have work to do or not. There’s usually a little give and take, where sometimes you might work extra hours, sometimes less, but it should average out in the end.
It’s super helpful in scheduling your work (and your finances) in that you can just keep stacking retainers until you’re as fully booked as you want to be with regular income reliably rolling in.
This is another place where the scope of the work can creep up on a freelancer, so be sure to be as accurate as you possibly can with your estimates of how long your tasks will take you and stick to your boundaries so you don’t get taken advantage of by a client who keeps pushing for more.
Hours are not rolled over from month to month, and any extra work over your allotted hours should be charged at your hourly rate. Clients might try to argue this, which is why we say over and over to put it in the contract. Your virtual assistant services are valuable—treat them as such!
Whatever you choose…
Ultimately, you’ll find that every client is different and every project is unique, and that will often dictate the billing style you choose for your virtual assistant services. Most freelancers find themselves working within all styles of billing at some point or another. How you bill for your virtual assistant services is a personal choice that only you can make.
Whenever possible, you want to get money up front, which should be basically built into every style except possibly hourly, though even there you can ask for an advance payment to cover the minimum number of hours you agree to work. Getting a deposit up front not only protects you from doing free work but also motivates the client by showing a commitment to you and your worth.
And finally, keep in mind that once your business starts to flourish and you’ve landed a couple of clients, you should always charge for the value of what the work is worth, never for your time.
I am the founder of VIRTUALCOPIA Business Collective and a self-employment enthusiast. I hope to inspire others to take a leap into their own entrepreneurial journeys while providing resources and support, and facilitating a community.