Here I am with another question :-)

I have experience doing administrative and marketing work, but I haven't worked as a virtual assistant before. I have set my rates at $XX/hr and was wondering if that was too low?

I hadn't questioned it before until I saw a "tweet" saying that if your in North America and your rates are less that $XX/hr, then people aren't going to hire you, or something like that.

Any thoughts?

Hi Stepfanie,
Setting your rates is a individual decision but there are some things to take into consideration when setting them. Remember that you will be responsible for paying your own taxes, so be sure when you're doing the math on what you need to earn you deduct those costs as well as other costs associated with your business. For example if you have a separate phone or utilize a web based phone system, supplies, any software purchases and/or monthly services you will need to pay for.
I personally wouldn't be able to earn enough of a profit after deducting taxes and other business expenses if I were only charging $20 or $25 an hour. I think many new VA's underestimate those expenses or don't figure them into the mix at all, which is why they often advertise low rates. They then realize they have to serve a huge amount of clients to actually earn the money they need. You're then left in a situation where you're overworked and it's hard to get everything accomplished without working constantly.

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

Stepfanie~

Tina's answer is dead-on. You must consider all your expenses (I know, I didn't think I had any when I started either, but they do start adding up) and what you need to net to be profitable and support yourself. And, as you alluded to in your post, there is the perception created by your rates. Some people look at $XX and will think "Great!, someone I can afford", but others will think "Hmmm, they must not have much experience". Those who are interested in finding the lowest rates are all about the money. I can tell you from experience that working with those who are all about the relationship is much more gratifying, so I encourage you to raise your rates to what you need and what you are worth (yes, you are worth much more than $XX/hour) and work less to make more.

Warmly,

Lorri

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Lorri Morin, CPVA
www.virtualsynergy.net

There are several rate calculators on the forum including this one that may help you to accurately set your rates.

BTW - we are not supposed to publish rates on the VAF...

Thanks for the info everyone. I'll
Definetly look at all my expenses and refigure my rates. And sorry, didn't realize not to post rates, thanks!

I was referred by a friend to a small business accountant here in town and it was probably the best thing I did. I was worried about how much federal, state and local taxes I would be paying and she helped clear them up for me. You might want to ask around in your area, plus if you need someone to do your taxes come tax time, then you'll already have someone in mind!

When I was charging a lower rate I struggled more with finding clients. As I've increased my rates I found it easier to get clients and everytime I fill my practice I increase my rates. I've got a waiting list right now.

Bonnie

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Bonnie Jo Davis is a marketing VA
http://www.your-marketing-assistant.com

If you really sketch out the amount it takes to operate, plus taxes plus paying yourself, then realistically, it is very hard to make any profit if you are charging under $35 per hour. There are numerous posts and informational sites out there which indicate that most VAs charge between $35 and $75 per hour.

I think it helps if you can think of yourself as a business owner who is looking to make a living and a profit and not just as an assistant who is doing another small business owner a favor. They have their budget in mind when hiring you and you should have yours in mind as well when taking on new clients.

Tina and Lorri's answers were right on. Best of luck.

Handy information! Definitely good to know I am in the ballpark, although the rate calculator threw me a bit. Thanks!

This calculator really helped me figure out my expenses, and my fees. Thanks for the information.

Kimberly said:

Originally Posted by JKVirtualOffice

I think it helps if you can think of yourself as a business owner who is looking to make a living and a profit and not just as an assistant who is doing another small business owner a favor.

Well said!!

I love the advice, above, to see an accountant before hand to get an idea of your tax costs.

Lezly
:cool:

Kimberly's numbers are right on the money and I love how she said this:

Quote:

They have their budget in mind when hiring you and you should have yours in mind as well when taking on new clients.

It's a good reminder, too, not to back down on our rates. We're worth every penny of what we charge.

Wow! Just did the rate calculator. Gave me a good idea as to what to charge so I can live my dream of quitting my day job and working from home full-time.

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Wiemer's Business Services LLC

Kimberly gave some really great advice. It is always important to do your due diligence before setting your fees.

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Tomesia Ingram
Virtual Partner 4 Success
www.vp4success.com

Also, apart from the basics of finding out how much it costs you to be in business, clients' perception sometimes does work along the line of "you get what you pay for". This seems to hold true when offering low or discoutned rates, potential clients may view this as low quality of service or experience. I know that it's not necessarily true, but that may be another problem with low rates.

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Vivi Gonzalez
www.ChaosRelief.com

WOW, thank you all! I just did that rate calculator, and I was way off on where I was going to begin with rates ~ I'm going to start up several notches thanks to your advice!

For those of you that work part-time as VA's would you say that you follow the same rate plan as those working for themselves full-time?

Thanks for adding your spin on this Kimberly.

This info is really helpful ~ thanks!

Another thing to consider is how much NON-billable time you'll have to work. All of the time you spend on your own bookkeeping, marketing, outsourcing, and a million other things is not billable time, so you have to charge more per hour when you ARE billing. I've found that at LEAST half of my time is spent on these tasks, so if I work 40 hours in a week I only bill half of that. That means that charging $25 an hour only brings in $12.50 an hour before taxes and expenses, and that's hard to live on.

Melissa K. Derbyshire
www.36hoursinaday.com