Hi All,

I am just starting out as a VA and am a little uncertain as to whether or not I am undercharging too much.
I have most services on offer at about $20 an hour and I have 3 packages put together that range from $400-$800 a month. There is quite a bit included in these packages however I feel like non of work is complicated and if I am charging less it will allow me to take on more clients in the hopes of making up the difference of charging more per hour...

It is probably worth mentioning that I aim to target trade & small construction based businesses and these types of companies/sole traders are somewhat known to be a little cheap when it comes to paying someone to do anything for them. Seems undercharging may be the only way to get these businesses on board I just wonder if it may be something that backfires on me.

Any thoughts...

SarahG,

While we do not discuss rates on the board I will add my 2 cents. First of all only you know what will work for you in charging your rates, all of us have different situations. However, you stated that by charging less you can take on more clients to make up the difference. This statement says it all for me.

I think this may backfire because instead of finding a few quality clients who you will be charging industry rates you are taking on those who will only pay on the lower end. So therefore you are going to nickle and dime yourself so to speak. I too target trade, solo and smaller companies and find that they are willing to pay standard rates when you clearly define the benefit of the services and how they will save in the long run.

Case in point, you have a plumber who charges $70/hour (low end of the scale), he spends hours on customer call backs, appointment schedules and billing tasks. This is several hours that he cannot work with someone so if the task is taking 4 hours he is loosing $320. Even if you charge half his rate he is still making money because that is one more customer he can be in front of.

Once you start marketing from a cost savings and customer appreciation standpoint you are showing them the benefit of your services and how it can affect their business. You may also want to tout the benefits that they only pay for the time needed so during slow times they can cut back and during peak times they can increase.

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Lee Drozak

Hi Sarah,
This is something that many of us struggle or struggled with. You have to do what you think is best. I started out with a relatively low rate and although many people - including clients - said that I didn´t charge enough, it felt good and comfortable to me.
Quite soon I found out that it didn´t do any harm to ask a higher fee. It brought me clients that were willing to pay double what I asked before.

I slowly brought my existing clients up to a higher level. All did so without complaint.

So, my lesson is: do what you are comfortable with in your own time. But don´t be afraid to ask more. The client is free to negotiate.

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Hilde
www.vbbassociates.com

Although we don't discuss rates here, I will go so far as to say that setting your rates should be a combination of value and business costs. When I say value, I mean what your value is to potential clients. The problem is, many of us severely under value our skills, experience and expertise. I've written about it before on my blog and I think we've even discussed it here on the forums before.
Do some research and get an idea of what you're really worth first, before setting those rates.

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~T.Marie Hilton- Clerical Advantage
author of the No Bull$#*% Guide to Virtual Assistants for Businesses

I learned right away that the axiom "you get what you pay for" goes both ways with clients. Cheap clients are usually difficult to work with, demanding, and always want more value than they are willing to pay to receive. You are better off charging industry rates (even on the lower end while starting out) and getting good clients that will work with you long-term. Clients can often be a huge referral source and I, for one, would prefer to be referred to clients willing to pay my rates than the ones who want cheap rates but quality work.

We need to find the right fit for each of our situations. In a way this is like finding a job. You might find a job that pays $13 an hour for your skills or you might find a job that pays $20 per hour for your skills. You need to find the people that are willing to pay higher for what you can do instead of working more hours to try to make up for low pay.

When setting your rates, I believe you should look at the big picture...meaning yearly. So take your hourly rate, how many billable hours you expect to achieve in a week (remember that not everything you do is a billable hour), multiply that into a yearly figure and deduct your yearly business expenses (taxes, website, phone, etc..) Now look at the figure from a yearly perspective. What do you think?

I agree with others that sometimes the clients that choose you solely based on a lower rate are not an ideal client.

My last point is....after having my VA business for 10 years....know that setting your rates is something you will revisit time and time again. Frankly, I believe most VAs sell themselves short! A professional VA with desired skills can charge a professional level rate.

Best wishes!

Originally Posted by Office Goddess

...You are better off charging industry rates (even on the lower end while starting out) ...

Hi Office Goddess, can you tell me how to find out what the industry rates are? Also, what's the best formula to use when factoring in vacation, benefits, insurance, retirement fund, and holiday pay?

I've attempted to calculate my rate by using the Hourly Rate Formula that I discovered on several websites, but I get a different calculation each time.

Thanks
Lisa

Start with this thread to help calculate your rate. As far as industry standards, try searching for other VAs that provide services in your same industry and then check THEIR sites for rates. You should be able to find this info using a Google search.

You can save yourself a lot of grief later by starting exactly as you mean to continue. As has been mentioned before, having lots of clients who pay low fees is not better than having a few quality clients who will pay your normal rate. You'll be able to provide a much better service that way and keep your clients happy. Lower end clients tend to expect far too much and end up consuming your valuable time with tiny issues.

Check other VA sites, forums etc to see what the average rate is but only you can determine your rate.

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Sabrina L. Williams
Your Property and Admin Needs Made Simple

The category in which you posted your question is one of the best places to learn about rates.

There is a sticky at the top of the RATES category which can help with the calculations.

If you charge too low to gain more customers, you will be miserable working so much time to make up for the ones that will pay your regular rates.

PLUS, low-rates tend to attract *cheapo* clients, which often turn into non-payers, slow payers and deadbeats. (Not all, but many.)

Your rate reflects how you value the expertise you bring to the job.

Price yourself fair and you will find fair and good clients willing to pay you for your value.

Janine

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