Any help would be very much appreciated (I'll try to keep this short!).
I have been constantly searching for a part-time homebased job that I can do to replace my temp job, so that I can be at home more and therefore working on marketing etc for my new VA business. I found one today for a home typist for a local company, for which I applied.
To cut a long story short, we emailed back and forth and she asked me about my VA business. I sent her a link to my website and she would now prefer to use my business as a client, rather than employ me, as the work would be sporadic at first, and it would suit the 'as-and-when' nature of the work they are offering. This is fine with me, however they already employ home typists (by the seem of things) and have a rate worked out already, per document. This doesn't work with the hourly or retainer rates that I have decided on for my business, and would work out a lot less.
If this were just for a few months or so, I would snap it up, as it's my first client and I would love to get the ball rolling on my business. However her email suggests that it will get much busier next year, and that this will be ongoing. Therefore I don't want to just say yes on the current basis, as I will then be stuck working for this client for the long run but at a low rate.
I knew what the rate was when I applied, but I was planning on working for them as an employee until my business was up and running. I need to be charging more if they are to use my VA services, as I will be self-employed and organising my own tax, no benefits, etc etc.
I just don't really know what to do. Should I accept this client just because its a client, regardless of the money? I feel that I can't go back to her now explaining my VA rates, as I knew the money she was offering when I applied in the first place.
I realise I have rambled on a bit - I hope I have explained all this clearly! Any thoughts on this would be really appreciated. What would you do?

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www.HereWhenYouNeedMe.com

It sounds to me like they're looking for employees but saw the opportunity to save themselves some paperwork by taking you on under your VA title. If that's the case then they need to come on as a client - literally - with a contract, relative rates, etc. If they want you as an employee and if the rate and work are still acceptable to you, then by all means go for it - BUT - as an employee for now - that way they are responsible for your taxes, etc.

They can't have it both ways [the IRS says so and you can use that as your reasoning to explain to her - IF you want to contract with me as a VA these are the terms... If you want to take me on as an employee, you're responsible for XYZ like any other employer.]

In either case, you're NOT bound to them for life. You can dissolve or ammend a contract as a VA, or you can quit as an employee... so when the relationship no longer serves you well and there isn't room for negotiating movement in a direction that will serve you well, you can politely and professionally say 'thank you and goodbye'.

P.S. What a really GREAT domain/business name you've secured for yourself - that is one of the best I've ever seen... love it! Lots of great marketing potential there.

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Actually, yes you CAN go back to her and explain your VA rates BECAUSE she is wanting to hire you as a business partner rather than an employee. You need to explain to her the differences between being a VA (no employer-paid taxes, no benefits, no 'water cooler' time, etc.) and an employee.

Before contacting her about this, it would probably be best to calculate how much per hour the difference is between employee and VA rates for her available position so you can explain the differences. In order to calculate this, you would need to know what benefits (if any) are included and calculate the cost to her of the benefits and employer matching taxes to see if your rates are way out of line or reasonable from her perspective. If the only difference is employer matching taxes, you can add 8% to your hourly wage to get close to her actual cost. (ex. $15/hr employee + taxes = $16.20 to employer).

Keep in mind that if she regularly hires folks p-t to work from their own homes, she most likely does not extend benefits and has no overhead costs so it is ONLY costing her 8% over the hourly pay. If your VA rates are considerably higher than that, she most likely won't want to pay them. At that point, you may wish to extend the "hourly + 8%" pay structure to her if she hires your business instead of you.

You don't need to tell her that the benefits to you are that if your business earns the income you can deduct business expenses at the end of the year from that income, you have an 'official' client (major ego boost ), and you can potentially down the road request a testimonial for your website and referrals for other clients.

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Lily Chambers, The Virtual Office Goddess, LLC
Author "How to Do Your Own Small Business Bookkeeping"

I agree with what Tess said. If you decide to work as a B2B, it completely changes the entire relationship and she needs to respect that. One thing I noticed is that you don't disclose your hourly rate on your website (quite a few don't, no biggy), so she may not realize that your B2B rate is different than the employer rate she's offering. This is definitely your chance to educate her.

However, as Lily said, you were willing to work for this person as a PT employee at a lower rate than what you charge as a business owner, so maybe you could still turn this into a win-win situation. Educate her on what a VA is and, more specifically, on how your business works and what your rates are and then propose that you'll work at the employer rate you agreed upon plus the extra $$ that it would cost the employer to keep you on staff. Also, I think it might be a good idea to explain to her that this is a special situation and that the relationship and rates may be reviewed be either party at any time or at a predetermined time (create a special contract for this situation). That way, if you gain more clients paying the rate you normally charge, you can reassess your relationship with her and let her know that her special rate will be ending because your business has grown and that you need to negotiate a new rate to bring her more in line with that.

Good luck

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Stephanie
New VA in the research phase :daisy:

Hi,

Another approach might be to tell them up front you are willing work for them as an employee at their chosen rate for a predetermined period of time (until your business is up and running) at which time they may hire your VA business at your VA rates.

Have them sign a contract detailing this agreement and then everyone is aware of the situation going in and you don't have to worry about making the transition.

Good luck,

Sharon
Administrative Results

Thank you all so much for your advice, you've all been massively helpful. I really wouldn't have known what to do without your suggestions. I really appreciate you taking the time to help me. Hopefully I'll report back soon with some good news.
(And thanks Tess for your lovely comment about my company/domain name! You really made my day! Thank you ).

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www.HereWhenYouNeedMe.com

I agree with what everyone said. I noticed that your prices aren't on your site, so you could send her your standard agreement with your standard rates without much explanation, if she questions it then explain it. She may be expecting you to charge more as a VA than an employee already? Just a thought.

I also like your domain name I was so un-inventive with mine lol.

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Stephanie L Watson - VA

thanks for sharing your story. My story is kind of similar, I accepted an administrative job from home as a independent contractor then realized that I really have a BIG opportunity to start a VA business. Unfortunately I accepted (verbally) a very low per-hour rate and now that I'm starting an official business I'll have to pay taxes etc. (honestly I thought I could do this semi-under the table thinking it would be super temporary but the client is loving the service and looking forward to a long-term business relationship. I've sent him a short e-mail explaining that we'll have to re-address the pay and he is fine with that. Thanks for sharing your story- all of the advice has been helpful for me too!

That's good donna that the client is willing to re-address the pay, I have had my first client and I'm not even ready it was through my uncle's network. My prices my site is not done, my paperwork is not ready, and so we agreed that we will re-address the pay to fit my rates this will be a long term client for email management of about 3 years for his small business travel agency!!

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Great Advice by Tess and all other VAs. At one point or the other we all have to face these kind of situations. And I will never forget to come back here to find a solution for all my VA business needs/problems.

Thanks to everyone

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Jessie DSouza
www.vibrantaceva.com