Virtual Assistant Pricing: Hourly vs. Packages
Confused about your virtual assistant pricing?
So, the other day I asked a question in the Virtual Assistant Savvies Facebook group that sparked a TON of conversion. Here’s what I asked:
TRUE OR FALSE: Packages are ALWAYS better than hourly rates.
And O.M.G. did I get a bigger response then I EVER thought!
We got responses like….
And then some were just there for the show… : )
And 119 comments later… I thought, “Let’s make this into a training!”.
Everyone had such a great opinion on both sides of the spectrum, and I want to talk about the benefits of both pricing structures before giving you my thoughts on which method is better.
Let’s do this…
Watch this video to find out my expert opinion on which pricing structure I think is better for your Virtual Assistant business: hourly or packages.
BENEFITS OF AN HOURLY PRICING STRUCTURE
If you’re anything like me, most people don’t even know what a Virtual Assistant is or what one does when they begin learning about how to start their own business.
Seriously… how many people have you told, “I’m starting a Virtual Assistant business” and their first response is… “What’s that!?”?
I think I’m at like… 1001. Maybe 1002.
When you are new to the world of virtual assistance, you have NO idea how long certain tasks can take. Completing tasks for yourself and completing them for a client are two totally different animals.
For example, how long does it take you to write 500 words about a subject you’re familiar with?
Now, how long does it take you to write an industry-specific blog post with SEO keywords about a topic you have to research?
It’s tough to know until you’ve really been in the mix, doing your thang.
Even if we are familiar with how to do a task (like writing), we usually don’t know in the beginning how long tasks will take, especially when working for a client.
My suggestion when virtual assistants are just beginning their business is to start with an hourly rate for a pricing structure.
That is, UNLESS you already have a specific skill that you already know how long it will take you to complete.
An hourly rate can be the simplest and fastest way to make money online. As an added bonus, there is no confusion from the client about what they’re receiving in exchange for their hard-earned money (an hour or several hours of your time).
HOW TO SET YOUR RATES
AS A VIRTUAL ASSISTANT
Let’s be honest – even if you start off offering packages for your services – in the back of your head, you should have an hourly rate for yourselves for the different projects that we do, regardless of our pricing structure.
For example: Let’s say that you offer a client a website design package. This website will take you approximately 10 hours to complete. In this scenario, if your hourly rate is $50 (even if it’s just in the back of your head), you would charge at least $500 for the website design package. Internally, we all kind of know our hourly rate.
When you’re first starting out in your Virtual Assistant business, I do recommend starting your hourly rate between $20-$30 per hour. An hourly rate is highly recommended so that you can learn more about your business, your clients, and yourself.
This hourly rate also protects you — it means you know you’re not getting paid $4 an hour because you underestimated how long a project would take.
You know you’re getting paid for the actual time you put in.
You can ask your client how long it takes them to complete a certain task. If it the task takes your client 2 hours, then you will probably want to estimate between 2.5 – 3 hours for you to complete it on their behalf.
Estimating time is a tricky thing. That is why bundling hours together as a package are important. I recommend to all of my students that they sell their hourly rate within a package structure. (For example, an hourly rate package might look like 10 hours per month purchased by a client up front for $300.)
Here’s an example of what that could look like:
Almost everyone is good to start with an hourly rate unless you have a packaged service (we’ll talk about that in a sec). Hourly works really well for general admin services.
BENEFITS OF A PACKAGES PRICING STRUCTURE
Packages are awesome. Most Virtual Assistants or freelancers are going to want to eventually move into package-based pricing.
What is packaged based pricing? Well, as opposed to selling the hours that you will work for a client, you deliver some other kind of value deliverable.
Take a look at this podcast management package from Kristi Golden’s Golden Virtual:
And this Facebook Ads pricing from Brandi Mowels:
Each of these packages provide some kind of VALUE other than just hours.
Here’s the main reason I suggest everyone eventually move into package based pricing:
You don’t want to get penalized for getting better at your job!
Think of it this way…
If you are using an hourly rate for your Pinterest Management services, you’re going to get faster at what you do and better at your job over time. You will take less time to complete the same amount of work, so transitioning to packages over hourly is ideal so as you don’t get paid less for working faster.
Let me break down something that I think is really important —
At the end of the day, your client needs a deliverable.
You have to have something written down in a proposal or contract that says I am delivering this value for this amount of money.
What’s the value deliverable for your package?
Building a website is an easy package – the end result (or value deliverable) is a live, functioning, well-designed and cohesive website for your client. This might cost $500, $1,000, or $3,000, depending on your package.
Rebecca Tracey from The Uncaged Life joined us live on Facebook to talk about the benefits of packages over hourly. Check out what she had to say!
If you want to move your pricing structure from hours to packages, you HAVE to have a value deliverable.
Even with general admin tasks such as customer service emails, you can shift into package-based pricing.
For example, maybe you’re logging 2-3 hours every week for your client. You might propose a package to your client as opposed to continuing to track your time and sending an invoice for your hours.
You can say, “Instead of me keeping track of time and billing for fluctuating hours, what if I moved to packages to where you know all of your customer service emails are just taken care of in a timely fashion, and I’ll charge $500 per month for the value of knowing your customers are being taken care of.”
So… what is my personal preference on the hourly vs. packages pricing structure debate??
My answer is…
Ultimately, you have to do what is right for your business.
Hourly rates are an amazing way to start your business.
I also love packages. I love the idea of being paid for deliverables instead of how many hours are spent on certain tasks. The “hourly rate” for some packages may be high and that’s great.
But we still need to kind of know what our hourly rate is in the back of our minds at all times so we know we are making what we are worth – hours or deliverables or both.
I am not #teamhourly or #teampackages – I am #teamboth. 😉
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When I first started my virtual assistant business I had no idea what I was doing, no marketable skills, and no plan for offering a specialty in my business. If there’s anyone that understands this, it’s me. It can be crazy overwhelming to learn “all the things”. You know what I’m talking about. You’re on…