Think You Have To Charge Hourly Rates As A Service Provider? Think Again!Sep 16, 2020
If you’ve just started out as a virtual assistant or have another type of service-based business (i.e. graphic design, copywriting, bookkeeping, online business manager..etc), you are likely using the hourly pricing model since this is the most simple route to go - you track your hours and get compensated for each hour you work.
However, this is not the only way of working. In this post, I’m here to share with you another alternative for pricing your services and help you decide which is the best option for your business.
The difference between hourly rates & retainer rates
When first starting out, you can decide on the hourly rate you’d like to earn as a VA. With hourly rates, you are naturally limited by the 8-10 hours a day that you would like to work as well as the number of clients that you can work with at a time. This is where retainer rates come in handy.
Retainers are a great option if you find clients who need a lot of tasks done on a recurring basis. With clients like these, you can charge them for a set amount of hours each month. For example, if you’re working with a client that needs 5 social media graphics, weekly meetings, support with inbox management..etc, every month, it may make more sense to create a retainer rate for that amount of work.
They will then know in advance what they are getting for their money, and you will know how much money you will have coming in each month (we love to focus on recurring revenue over here!). With retainers, it can also be possible to receive payment upfront, instead of in the following month like most hourly payments are processed.
How to decide which one is best for you
Both options certainly have their pros and cons, so it’s all about deciding which option would work best for you. Some people really enjoy working on an hourly model, and are able to fill up their calendar easier this way, and take a vacation or a break when needed. This might be especially useful to you if you fit other work (such as a 9-5) or personal commitments around your business.
The thing I like about retainers is that you will have a better idea of your monthly income in advance. Plus, the more experience that you gain, the faster you’ll complete the work. If you decide to go the retainer route, it’s important to have a conversation with your client about your package of hours carrying over/expiring. If you are continually having to roll over hours because they’re not being used, you may find this is not the best option for that specific client.
The importance of being confident in whatever route you choose
Regardless of which pricing model you decide is best for you, it’s all about having confidence in yourself and the service you provide. Don’t price yourself too low to begin with and make sure you charge what your years of experience and knowledge are worth.
By pricing too low people may think your work is of poor quality and that you don’t value yourself. Also, make sure you factor in tax and business expenses into either pricing model, so you aren’t coming up short later in the year. And most important of all, remember that by providing a consistent, quality service every time, clients will be willing to keep paying for your reliability and high-quality work.
Which pricing model do you use currently? Tell me in the comments below!
If pricing is something that you’re struggling with and want to continue expanding your knowledge about working as a virtual assistant, I break all of this down in more detail inside my free masterclass that shows you how to grow a service-based business to $3K months without burning out. Click here to watch it right away!
ABOUT STEPH BLAKE
After more than 10 years in corporate marketing, Steph decided that she was ready to go full force in her virtual assistant biz to help other entrepreneurs automate & organize the backend.
The end result? $10K+ months, completely booked out & ready to teach other women to do the same thing!
What began as a tiny dream to eventually help other moms stay home with their kids, turned into an obsession that she's fully invested in as a business coach.
Today, she helps service providers start and scale their done-for-you businesses without burning out.
Steph also has an insane obsession with Chipotle & Amazon Prime. She lives outside of Chicago with her husband, little boy and pup.