I just had an idea on a pricing structure and would like to toss it out to the group for discussion. (Keep in mind, I literally just had this idea about 2 minutes ago)

What do you think about taking clients on an hourly basis for the first 30 days of the relationship, then moving to a retainer if they choose to continue. That retainer would be based loosely on the average # of hours spent over the initial 30 day period.

Okay, tear it apart. why would/wouldn't this work?
Raven

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Raven,

Why would you want to do that?

The consultation you have with the client spells out how much time they want to contract and how much time you will work. You need to know that information before you get started with any client.

You want a commitment upfront from the client detailing how much time they will purchase from you. You could short change yourself if you don't set a number of hours or have some type of minimum hours to work in place. A client could send you work for 15 minutes...how will you make any money?

You are better off coming up with a block of hours you feel the client will need to perform the work. If they use more hours, then bump them up to more hours in the retainer block.
That way the client is committed to sending you work to fill those pre-paid hours. If they don't use as many hours, then lower them down to a smaller block of hours.

But if you do the hourly, set a minimum for yourself so you are assured some good working time. Then if you feel you can offer the client retainer rates the next month, include that minimum in the retainer.

Do you feel you have to offer hourly first because you don't know how much to determine for a retainer plan?

Janine

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Hi Janine,

I started off working hourly and that seems to be what most of my clients expect, but now that I've shown value to them, many are transitioning to monthly retainers. So I figured, since this has been the natural progression of my business thus far, maybe it would work as a standard. Similar to the way a business would offer a "free trial" before you sign on for a monthly subscription. (Except for the free part of course)

They're at all different places in their businesses (just getting started, established businesses, some have never done any marketing at all). So many don't know how much they need until we really get into it and they see what's possible. I do have a minimum of hours per week and a minimum contract size, so I'm covered there. But, I'm trying to consider a rate structure that allows my clients to assume little risk while I show them the value of having a virtual assistant. I'm hesitant about the idea of having them feel like they "have" to send me work to fill a certain number of hours. I want them to "want" to send me work because they know it'll help grow their business.

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Veranda Lane * The Launch Pad for Your Next Big Leap*
www.verandalane.com

Some clients may not realize how much or how little time things take, and may estimate too many or too little hours for your work. I have a client who is not very versed on a program, but I am. So she thinks it takes hours to do a certain project (because that's how long it takes her) when it takes me only one. I also have a client who estimated I'd be working 20 hours/week and grossly overestimated her workload and underestimated my expertise. I ended up working only 2-3 hours/week. If you have a consultation, you can probably estimate the time needed to perform all the work they need. But it might help to have an agreement to revisit this after 60 or 90 days and adjust expectations based on actual work with each other.

This is very helpful information. I see everyone's point. It makes sense to charge by the hour because of all your start-up clients no knowing how much they'll need you, but on the other hand, the consultation will help narrow down a more realistic number of hours needed.

Raven, is it that you're wanting to charge by the hour because you don't have a better idea of the time it will take you to complete some of the projects your clients are requesting?

I guess in the past my consultations have been more like : Here's how I can do what you're asking, and here are give more things that you didn't know you needed. So they may come prepared to pay for five hours of admin assistance. I could take that or do the hourly thing take ALL the assignments I can, then at the end of a month say "hey you started off only wanting admin help, but now I run your social media and blog strategy,lets build our monthly agreement based on the 15 hours of more specialized work."

So its really less of a pricing structure and more of a sales tool. Thanks for the feedback guys, now that ive thought it out more with your help I'm confident that its worth a try!

Raven,

It sounds like a great approach, especially if a PC is uneasy about signing a longer term contract. Let us know how it works out!