For some people, asking for money can be the hardest part of their business.
There could be one or more reasons for that.
It might be they are not confident in their ability. It might be they are a start-up or new as a VA and feel it’s ‘not right’ to charge ‘too much’.
It could be that they struggle with the idea of selling (even though they know that to run a business successfully you have to sell a product or service).
Perhaps they don’t have an idea of their own worth or know the going rate for what they do.
As a VA you might have an hourly rate, a daily rate and even a retainer rate for more regular work. You may also be asked about a project rate – as that’s how many executives, leaders and managers are asked to operate and budget.
Whatever you set that at, ensure that prospects and clients understand that they are paying for the value of what you do – not a price like they’d pay for a commodity in a shop.
On the face of it, your clients are paying you to do a piece of work. They’re paying you to carry out a series of tasks.
But they are not just getting your time.
Your clients are buying your knowledge, your experience and your expertise.
Your clients are buying time (when you do it for them, you save them time).
Your clients are buying peace of mind or an easier life (when it’s left in your capable hands it removes the hassle for them).
Your work has a value beyond the time you spend on it. You may want to consider that next time you review your pricing.
Obviously, you have to consider market forces and what the market is prepared to pay. But, as in other fields of professional work, fees can vary quite a bit.
Some maths to start with
Let’s say a VA works a 35-hour week and charges £25 per hour. That’s £875 per week (before any taxes).
If they gave themselves an eight per cent pay rise, that would take them up to £27 per hour. For the same working week, that would give them £945.
That’s an extra £70 per week. Assuming they take four weeks of annual holiday, that’s an additional gross income of £3,360 a year.
You see how a small increase can add up over time.
It’s easier to charge more when you are an expert, highly productive and ‘indispensable’ to clients. When they see your value, they are more willing to pay a higher going rate.
Before you start raising your prices, it’s a smart move to consider a few things.
It pays to see what’s happening in the marketplace and what your competitors are doing. If everyone in your field, niche or industry have been putting up their prices, it’s easier for you to do the same. If you’re the exception to the rule, you may want to consider offering something unique or different that others do not.
Be upfront about any price rises. Tell people in advance. It can be a useful way to retain clients and extend contracts, especially if you offer a renewal incentive.
And, of course, when there is a change people usually want to know why. So, tell them. If you can demonstrate that the change is because of a better service or you can highlight an additional or fresh service you offer, that’s reassuring for the client.
Demonstrate the value. Explain the price rise. Don’t apologise. If you’re worth it, you are worth it.
Of course, not everyone may be happy with paying more. If a client is solely driven by the price they may drop out. That may appear to be a downside but if it creates room to attract a better kind of client, who understands the difference between value and price, it can work out better in the longer term.
You’re in charge.
To make it easier for clients to accept, there are different ways you can approach increasing your prices.
You could freeze your fees for existing clients (say for the next 12 months) and only apply the increase to new clients. That way your current clients feel valued and rewarded for their loyalty. If there’s a set date for your price increase, prospects know that unless they act before that time, they’ll end up paying more. There’s an incentive for them to act fast.
If you’re really unsure about how people will react, you could test the price rise with a small group of clients first. If that goes well, you can expand the change to all your client base.
It might be that circumstances add significant costs to the running of your business. In this case, you could add some fees temporarily and explain why the increase is required. Once circumstances change for the better, you can end the additional fees and show that you’re a person of your word.
Another way to increase your fees is to offer extra services or a bundle of services. You don’t want to make it onerous for yourself but if you have specialist skills and understand the challenges your client’s face, this is a smart way to go.
Remember, as a VA – whether you have a limited company or are a sole trader – you are running a business.
A business requires time and money. The higher your rates, the fewer hours you have to work to make the same amount each month.
Just a £2-per-hour increase can give you an extra £3,360 before tax – every year.
It’s worth thinking about your value – and much you value yourself.