When you start your business, one of the first things you want to figure out is how to charge. And while you might think the only option is per hour, there are a few ways you can structure this! Today, we are going to cover the three most common structures: hourly, retainer, and packages.
For a complete in-depth guide, including how to set goals to leave your full-time job, a section on taxes, and so much more on packages, make sure to check out The Creative VA Masterclass! In my signature course, we cover taxes, packages, and goals in much more depth! Today we are focusing on the top things you need to know to jumpstart.
Every VA and Freelancer you ask will have a very different opinion on this hourly vs package debate. So stick with your gut feeling once we go over the options.
As a creative virtual assistant, you can charge $20+ an hour. I recommend keeping it around $30 an hour until you gain more clients. Even if you are still learning services, I suggest you not go below $20/hour. This is because you will need to be setting aside money each month for taxes (15-30% each month).
No matter what you choose, always have an hourly rate when you get started. Even if you do a package, like posting 3 Instagram posts per week, you will base that pricing on how long it takes you (and your hourly rate!).
Hourly is the easiest way to start your career as a VA. Why? Because when you first start, you have no idea how long a task will take! Let’s say someone wants you to write a 500-word blog post. Unless you have done that a lot in the past, you will not know if it will take you 30 minutes or 3 hours to complete. That is where charging by the hour helps you.
If you are just now starting out and do not know how long items take you to do, start with hourly. You do not need to know the whole scope of the job before starting – You will be able to track the time and charge at the end. This goes a lot with the first point. When you first start, you might not know the full scope of how long specific packages take, so hourly allows you to start gaging your time.
The biggest con is tracking hours. You have to track time, minute by minute. This might sound daunting, but you can use some great programs to track your time, like Toggl, Harvest, and Dubsado.
Another downfall is that as you get faster at a project and complete it quicker, you lose money down the road. Let’s say you start working with a client for a few months. You are learning and now know her industry. You know the target keywords. Now your 500-word blog post went from taking you 3 hours to 1 hour. That means you are losing $60 each time you write a blog (assuming you are at $30 hour)
If you are offering hourly, make sure to offer retainers! This means that a client books you for a certain number of hours each month, and those hours do not roll over month-to-month. These are often sold in 10, 20, and 30 hour per month packages. This means a client has up to 20 hours per month of work.
Have a minimum number of hours a client can book. This means that a client has to book you for a certain number of hours per month as a minimum. This is often 5 or 10 hours per month. If you have a minimum hour per month rule, make sure there is an expiration date! Hours DO NOT roll over month to month. If you have the time rollover, clients will not feel the urge to use your service, leaving you out hundreds of dollars.
Make sure to outline when the hours expire. Remember: If a client does not use all the hours they booked you for, they still have to pay for the hours not used. Ex. If they buy 10-hour package but only use 6, they still pay for 10. Also have them pay for the hours upfront each month. So if they are purchasing 10 hours of work for $300, they need to pay upfront.
The most profitable way to run your business will be by offering packages. With packages, there are no more tracking hours! You can start pricing your packages off of that once you know how long a task takes, like writing that 500-word blog post.
Package pricing can be based on your hourly rate for the tasks involved. If you believe the package will take you 5 hours, add in a few hours as a buffer. So you would say 8 hours x hourly rate, and adjust as you desire. I add 30-50% on top of the hours spent. So if I charge $30/hour, and it takes me 8 hours, I will charge $240+30%, for a total of $312 for the package.
You can make more money (and have profit!)
Ex. Pinterest might take you 1 hour per week, so at $30/hour, that would be $120/month if you charged hourly. However, the average Pinterest package starts at $215/month. That is an extra $95 per month!
Even if you get faster at completing a specific task, you do not get penalized. If you do hourly and get faster at a task, you log fewer hours and lose money.
Ex. Pinterest now takes you 45 minutes per client. If you charged hourly, you would be losing money each month. With a package, you make the same amount.
You have to know how long you take on a project to make sure you are making a good hourly rate. Until you know how long you take, it can be a complete guessing game. This is why I did not offer packages right away.
You need to make sure you know the full scope of work before starting – last-minute additions can add many hours, leaving you with no profit! Some tasks are easier hourly anyway, like doing a website audit.
You also need to outline your package clearly to a client and explain that additional work outside of this package will incur hourly charges. This is huge. If a client starts asking for items outside of the package’s proposed scope, you need to charge them. I used to be awful at this, and in turn, have lost thousands – yes thousands – of dollars.
Not sure what a creative VA is? Not sure exactly how to get started? I’ve got you covered! Grab a notebook and a cup of coffee and tune in for my FREE Creative VA 101 Workshop!