Okay, I thought I was really on top of things. I have had my basic contract all prepared with various rates for customers to choose from, but I have so many customers that prefer to go by project. The problem is that I'm having a hard time determining how to charge by project since it can vary big time depending on what the project involves. I have no clue how to get started on figuring out what to charge. Does anyone have any ideas on how I can do this? I appreciate any suggestions that you can give me.

For per project rates, I usually try to calculate how many hours I think the project will take and add a couple extra for those unexpected things. Then I charge an amount that would still cover my hourly rate.

So if a project would take 10 hours and my charge is normally $35/hour, the total project would cost $350.

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Sue L Canfield
AwesomeAssistant.info
My Blog

So do you ever vary it depending on the difficulty of the project for instance, doing a presentation versus just typing? Or just use the same formula regardless of how difficult since the more difficult it is, the longer it could take anyway.

This is exactly why we're strictly per-hour. For some things that we've done time and again or have in-house programs for I can now charge per-project, but until I was sure of how long it would take and what would go into each project I invoiced exclusively by the hour.

It can be a good selling point to clients to be able to say 'This costs X start to finish' though so I understand what you're going for - just be careful not to shortchange yourself, or overcharge your clients

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This has come up in various ways before but I think Amanda explained it in a very good way:

Quote:

State your assumptions on how you will receive the information. For example, if you quote $x to prepare a mass mailing you want to be clear that the price reflects that you'll get the information in a usable format that has already been reviewed for completeness and duplication, requiring minimal effort on your part. Also state the number of letters, etc. Throw in a "projects not meeting the above specifications could result in a higher price, to be discussed prior to work commencing" statement and you should be ok. Personally I think it's better to quote a not to exceed (NTE) amount as a flat fee with a check-in at the 50% and 80% completion mark. For example, for the same mailing you could do a "The project is expected to require the following in time/materials (insert your estimate) and should not exceed (use this as your buffer). If, at the 50% and 80% review points it is found that the NTE estimate is insufficient to cover the cost/time of the project (as a result of scope changes or delays through no fault of the VA) a revised quote will be submitted for client approval before work can continue." You should be tracking your time anyway so it shouldn't be a problem. But this way the client gets a semi-fixed price and you get some protection from a crazy client that changes the letter 500 times.

Per project pricing is still based on an hourly rate and you tell your client that the price of the project changes only when the scope of the project changes, that way you don't get stuck with a bunch more hours of work when they want to make changes that weren't included in your original quote. A more difficult project would probably take more hours so you would invariably end up charging more for it in the long.

Per Project Pricing is beneficial in other ways too. For example, what may take you three hours to do now, may only take you 1 1/2 hours once you've done it a hundred times, if you price that as a project then you aren't penalized for simply being for being more efficient.

There's also a good article here followed by some great comments about why you working by project.

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Kimberly
Facebook Marketing Magic!

I no longer quote per project. I tell people what my hourly rate is, how long I think it will take but tell them that it is just and estimate the invoice will reflect actual time spent on the job.

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Julia

I stick to hourly rates. I find it is the easiest and truest way of billing. I also round off a bit, so if it takes 6 hours and 10 minutes to finish, I bill for 6 hours.

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Carolyn
Atlantic Virtual Assistant

Originally Posted by pdxblueskie

There's also a good article here followed by some great comments about why you working by project.

I read this article and maybe for copywriting you can charge by the project. For what we do, I don't think so, they are too many variables. Scope changes for one. A client asked me how long I thought something would take to do for one of her clients and I gave her my estimate. Part way into the project it had completely changed and I let her know that my original estimate had been based on different criteria. She agreed and said to just bill the time by the hour, that she wasn't holding me to that original estimate. She's one of my best clients and is great!

Also, if clients know they're paying a set fee, they can mess around and make changes til the cows come home.

Transcription is another area that you just can't anticipate how long something will take. A 45 minute file that is recorded badly or the speaker is quiet, whispers, etc, can take longer to transcribe than a clean 90 minute professionally recorded file. I had that experience last month.

I've been doing transcription for a client this week - interviews. Two of them were of equal length, one interviewee spoke clearly the other whispered a lot, the second one took 50% longer than the first one.

Carolyn, I'd bill for that 10 minutes - that's your time and you should be paid for it. I bill to the minute, but I'm fortunate that I finally have a great time tracking program that also automatically does my invoices so I don't have to mess around with figuring out the invoice amounts.

I also take exception to this article in that he says it encourages dishonesty and distrust. If trust isn't in a relationship I don't want to be in that relationship.

Take the $10 car cleaning example. Pay $10 for 2 minutes in a car wash or pay $10 until the car is clean. That is silly. If the car was really filthy and needed two hours to get it exceptionally clean, the car cleaner is working for $5.00 per hour. I also agree it's not worth it to spend $10 and get a less than perfect product. But paying a reasonable rate to get the car cleaned based on the time it takes is fair to the service provider.

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Julia

I wish I would have seen this thread last week. I always grapple with wondering if I charged too little. And I think I might have for this one. I don't think I'm going to do the per hour thing any longer.

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Tamika R. Johnson, MBA, Principal
administrative partners, llc
www.administrativepartners.net | http://adminpartners.blogspot.com

Julia,
I believe that whatever pricing structure works best for you and your business is obviously the one to go with. After all that's one of the major benefits of being the one's in charge of making these decisions. Hourly is pretty much norm in the industry and it works quite well for many and for many of the services a VA provides.

For myself, I have some belief that per project pricing can be beneficial to me and my business if done the right way. As I mentioned before, and I have this on my website, the price of the project changes if the scope of the project changes. This is why you really need to incorporate a check in with the client at 50% completion and at about 75-80% completion. This allows for changes if there need to be some incorporated into the original agreement. But it also gives the client some peace of mind that what I've quoted them will be the cost they can budget for and that if I happen to mess up and have to go back and do 2 extra hours of work to fix my mistake, then that's my responsibility and not theirs.

The article I mentioned was good for me as it helped me to think about pricing and about getting paid in general and how I want to market myself, my business & my services. So much of the Virtual Assistant industry is based on by the hour work, that I know it's not realistic to think that my work won't somehow be based on an hourly rate. However, in thinking about my ideal customer, I want to work with people who are looking to work with me because of the value I bring and the results they get rather than those who have to have a report showing the exact number of minutes I spent working for them. To me, that's more an employee mindset.

I completely agree with you that some services, such as transcription, probably don't lend themselves well to a per project pricing structure. But I also believe that some services or projects do and which is why I offer both.

I'm glad you read the article and that it contributed to this conversation. It's great that as an industry we have these kinds of discussions.

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Kimberly
Facebook Marketing Magic!