When your focus is filling out your client roster, it is sometimes tempting to offer lower rates to try to drum up business. Likewise, you may put off raising your rates, for fear you may lose clients. Don’t limit yourself because of fearful thinking. Instead, think upon a few reasons why setting fair rates for yourself is OKAY, and the only option if you want to grow a business that you LOVE.
Falling into the “low rates” trap means working twice as hard for a lesser clientele. Quality clients don’t shop around for the “cheapest” VA. They are fully aware of the value of what a VA does, and since they value their own business, and have reached a certain level of success, they are not going to put their business matters in the hands of just anyone. By undervaluing yourself on the market, you are sending a message that your services are not up to par, or that you are naive, and will attract clients who will nitpick, take all your energy, and probably find ways not to pay you. You deserve better! Set a fair rate for yourself!
Base your rates on your desired profit. Studies say that in order to earn the same amount per year that you earned working for an employer, you would need to bill out at 2 to 2.5 times whatever hourly rate that salary equaled. So, if you made $40,000 a year salary, or $20 an hour, you would need to bill out $40 – $50 an hour minimum to maybe make $40,000, working full-time. If you wish to make a six-figure salary, you will need to bill much higher than that, and you still have to cover operating expenses, you’re not able to take time off, or count the necessary hours needed to market your business into that equation. So, you end up working way more than you want, for less than you want.
Trading hours for dollars will only get you so far, so, if you do decide to bill hourly, set the highest rate the market will allow. Otherwise, consider flat rate monthly packages, and work backwards from what your desired profit is when you consider how much to charge, how many hours each package is worth, and how many packages you will need to sell each year to make your goal. Again, creating service packages is a winning decision. They will give you a much better hourly rate, less work, and more flexibility.
If you don’t know your value, find out NOW. If you would like to create service packages or raise your rates, or you’re lacking clients and are tempted to reduce your rates to bring on more business, do yourself a favor and get an objective view of the value of your services. Ask your clients how you have impacted their business. Are they consistently satisfied? Has having you on board allowed them the freedom they want and need in order to follow their passions and grow their businesses? Most importantly, has having you on board increased their profits? Having some hard evidence that your services are a great investment will shore up your confidence when setting and raising your rates. Put client testimonials in your marketing to convey that to potential clients before you even speak about rates. You’ll attract the right kind of clients, and eliminate those who “couldn’t afford you anyway.”
It is important – and empowering – to know just what kind of impact you and your services have on others, so you can set or raise your rates with confidence, truly enjoy your work and your clients, and bring you closer to achieving your business goals!
Donna Toothaker is CEO, founder and coach of Step It UP VA Coaching. These highly sought-after VA coaching programs have been created for established, successful VAs who wish to create the 6-figure business of their dreams. Visit http://www.stepitupva.com to receive the free report, Top 3 Mistakes to Avoid in Creating a 6-Figure VA Business.