You know those hourly rate calculators that claim to help you find your true hourly worth? You enter your expected salary, the number of weeks you want to spend in Paris every year, and the number of hours you want to work per week, and justlikethat it spits out a number.
Mine was $260.
Seriously, I want to take four weeks off for vacation every year, only work 20 hours per week when I am in the office, and I think $250,000 is a nice number. So that must mean my hourly rate is $260.
Clearly, there’s a flaw in the calculation somewhere.
The truth is, those calculators tell you nothing about how much you’re actually worth. They might tell you how realistic your goals are (I’m probably going to have to work more than 20 hours per week to meet mine) but they tell you nothing about your current business.
Do Some Detective Work
First, take a look at your competitor’s websites. What are they charging for similar work? Do they have more or less experience than you do? Are they busy or begging for work?
Find two or three other virtual assistants with similar experience, skills and clients, and you’ll have a really good idea what your market is willing to pay. Also, remember to compare only those virtual assistants in the same part of the world as you. There’s a huge difference in cost between the US and India, for example, so be sure you’re comparing apples to apples.
Also, don’t forget to factor in things like taxes, equipment, Internet access, and continuing education. Those expenses and more will shave several cents from every dollar you earn, and while they’re not directly related to your actual worth as a service provider, they do help determine what you need to charge to stay afloat.
But Are You Profitable?
Based on the rates you scouted out among other VAs, can you pay your expenses and still earn a decent profit? If you can, great! If not, you have some options.
- Improve your skills. This is the best way to increase your rates. Learn how to navigate Infusionsoft, set up a 3-day telesummit, or install and configure a shopping cart, and you can confidently raise your rates. These and other skills are in hot demand, and virtual assistants who are proficient at them are able to charge more.
- Work to attract higher-paying clients. That sounds backwards, I know. But here’s the thing: Top paying clients aren’t going to pick you out of their Facebook friends list and offer you a job. You need to get out there and make yourself known, and you need to do it in a professional manner. Attend live, in-person events. Revamp your website to present a more polished look. Improve your speaking skills. These things and more will let potential clients know you’re worth what you charge–whatever that might be.
- Position yourself as a consultant. Business owners quite often need more than just a few tasks completed. They need direction as well. If they can count on you to offer your expertise about tools and strategies they can use, they’ll happily pay a much higher rate.
The Package Pricing Alternative
What’s better than a higher hourly rate? Package pricing.
Here’s a conundrum good virtual assistants face: The more skilled you are, the less you earn.
It’s true. As you improve your skills and are able to work faster, you may just find yourself earning less, simply because it takes fewer hours to complete each project.
The answer is to base your pricing not on how long it takes you to do a task, but rather on your expertise in doing it.
One of the most common things I do for new clients is install and configure membership software. I’ve done it dozens of times, so as you can imagine, it doesn’t take me very long. If I charged by the hour for that, I wouldn’t earn much at all.
But people hire me to install aMember and WishList because I know what I’m doing (see “Position yourself as a consultant” above) and I can answer their questions and make decisions about their membership site that they do not have the insight or knowledge to make. That deserves a higher price point.
Not sure how to work out package pricing? Lisa Wells is my go-to expert on pricing and packaging of services. Her Profitable Packages Program is the gold standard in package creation and pricing. Check it out here.
The bottom line is this: Your first job as a business owner is to determine your price point. You have to find that sweet spot right where your needs for profit meet your clients’ needs for affordability. Finding that spot can be a little tricky, but with some detective work and a strong shot of self-esteem and confidence, you’ll get there.
In the comments below, tell me how you determined your pricing. Did you channel your inner P.I. or just pick a number? When is the last time you re-evaluated your pricing structure?