Undercharging is most likely the biggest mistake I ever made in my virtual assistant business. To be completely honest, when I first started and didn’t even realize that I was a virtual assistant, I was just happy to be getting paid. I imagine I would have taken any amount someone offered to give me. Therefore I am sure that I was not properly pricing my services as a virtual assistant.
I cannot caution you enough about making this mistake. I am in several online virtual assistant groups and I cannot tell you how often I see people undervaluing themselves by offering to do work for cheap or even free.
Just recently, I saw a newbie virtual assistant offer to do work for $5. Unfortunately, this seems to be a trait of women.
You need to keep a few things in mind when you’re deciding your pricing. You have to remember you’re not just trading hours for dollars, you are bringing all your skills, experience, and expertise to the table as well. Those skills, experience, and expertise are much more valuable than merely an hour of your time.
You must take all of those things into consideration when you begin determining your pricing. Secondly, you must also take into consideration your target market or niche. Often times it is important to consider what they are willing and able to pay. In addition, you will want to decide in what manner you will charge your clients. There are several options: You can choose to charge per hour or per project. You might also consider doing packages or retainers.
I have actually done all of the above and find the easiest options to be per hour or per project. I found it more difficult to sell packages and/or retainer; however, I know many virtual assistants who have had success with them.
I would rather share with you what I know has worked for me. It is my advice to begin your hourly rate at no less than $20 per hour. I realize that if you are working for other work-at-home moms and/or bloggers that this may not be within their budgets. If you can make the amount of money that you desire by charging less, or if you have a desire to help a particular niche, then go for it, but I do not recommend staying at that price point for an extended period of time.
How to Determine Your Hourly Rate When Pricing Your Services
Speaking of making the amount of money you desire, you must first determine how much it is that you need to make per month. You will then take that amount and divide it by the number of hours you have available per month to work. This will help determine the price per hour that you should be charging. Let me give you an easy-to-understand example.
Let’s say that you need to make $1000 per month. Then, let’s say that you have 80 hours per month to put into your business. (I realize this isn’t even full-time, but I have found as a busy mom it will be difficult to put in full-time hours, and working full-time is not always necessary.)
Here is the formula:
$1000 / 80 = $12.50 per hour
I know you could charge $12.50 per hour, but you’re not going to. You are going to charge $20 per hour which leaves you with more time with your children and more time to do what you want to do.
So let’s work backward: charging $20 you can make $1000 working only ________ hours?
$1000/ $20 = 50 hours
If you break that down even further you will realize that you will only need to work 12.5 hours per week or 2.5 hours per day if you work 5 days a week.
Yes, you will need to take into account any business expenses that you might have; however, I encourage you to keep your business expenses low. I currently only spend around $50 per month on all my business expenses.
Next, you will need to decide how you will get paid. Again, there are several options. I have personally only used two options, therefore I will only discuss those that I know and can recommend.