Virtual Assistant Pricing: Hourly vs. Packages
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Confused about your virtual assistant pricing?
The other day I asked a question in the Virtual Assistant Savvies Facebook group that sparked a TON of conversation. Here’s what I asked:
TRUE OR FALSE: Packages are ALWAYS better than hourly rates.
I got more responses than I EVER expected. Here’s what people were saying…
Some agreed, but others disagreed…
And some were just there for the show 👀…
119 comments later I thought, “Let’s make this into a training”!
Everyone had such great opinions on both sides of the spectrum that I wanted to talk about the benefits of both pricing structures before giving you my thoughts on which method I prefer.
So let’s do this. 👏
Prefer YouTube? Watch the full video here!
Benefits of hourly pricing in your Virtual Assistant business
When you first start your virtual assistant business, there may be people who don’t even know what a virtual assistant is or what they do.
(Show of hands ✋…how many people have you told, “I’m starting a virtual assistant business” and their first response is… “What’s that!?” It’s happened to me at LEAST 1000 times)
When you are new to the world of virtual assistance, you have NO idea how long certain tasks will take you.
Even if you’ve completed that kind of work before, the time it takes can change ENTIRELY based on the client you’re working with.
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 that until you’ve been doing that kind of work consistently.)
My best advice for virtual assistants who are just beginning their business is to start with an hourly rate for their pricing structure.
The exception to this would be if you have a specific skill that you are really comfortable with and you already know how long it will take you to complete.
An hourly rate is really straightforward for both you and the client because there is no confusion on the client’s end about what they’re paying for. They know they are paying X amount of dollars for the X amount of hours you worked.
HOW TO SET YOUR RATES
AS A VIRTUAL ASSISTANT
Even if you start off by offering flat rate packages for your services, you should have what I call an internal hourly rate for the different projects that you do.
What I mean by internal hourly rate, is a minimum rate that you would charge for that particular service. While you might not disclose that hourly rate to the client, it serves as your north star when calculating your packages.
You will use that internal hourly rate and multiply by the amount of time you expect the work will take. From there you may increase the rate a bit, considering things like taxes, time spent communicating with your client, or revisions the client may request for you to make.
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 internal hourly rate is $50 (you’re not actually disclosing that to the client), 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.
Starting with an hourly rate is highly recommended because it gives you the chance to learn how long different tasks are going to take you.
As you develop your skills and complete your tasks more quickly, you can also raise your hourly rate. (That way you’re not “penalizing” yourself just because you’re completing the work more quickly).
Having an hourly rate can also protect you. It means you know you’re not getting paid $4 an hour just because you underestimated how long the project would take you. (Yeah—that definitely happens!)
Pro tip: If it’s your first time doing a particular task or working with a particular client, you can ask the client how long it typically takes them to do it.
If 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 is 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 upfront for $300.)
Here’s an example by Erica Fullerton from Ovello of what that could look like:
Hourly rates work really well for general admin services, but it’s compatible with almost all other types of VA services as well.
Benefits of package-based pricing in your virtual assistant business
I’m just going to tell you upfront…I LOVE offering packages.
Most virtual assistants or freelancers are going to want to eventually move into package-based pricing because it doesn’t require you to trade time for money.
Instead of paying for your time, your client is paying for the value of your deliverable.
Here is an example via podcast manager Kristi Golden from Golden Virtual:
Here is a second example from Facebook Ads specialist Brandi Mowles:
Each of these packages provides a specific set of deliverables.
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! 👈
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 package-based pricing prevents you from earning 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 must have something written down in a proposal or contract that says you are delivering X for Z amount of money.
What’s the value deliverable for your package?
Building a website is an easy package because the end result (or value deliverable) is a live, functioning, well-designed, and cohesive website for your client.
That might cost $500, $1,000, or $3,000, depending on your skill, experience, and what you’re comfortable charging.
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 hourly 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.
Maybe you’re logging 2-3 hours every week for your client. You might propose a package to your client where they pay a certain amount of money for the work you’re doing rather than the hours you’re tracking.
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 a flat rate of $500 per month for the value of knowing your customers are being taken care of.”
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, but I HIGHLY encourage you to transition to package-based rates at some point.
I personally 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 know what our internal hourly rate is at all times so we know we are making what we are worth.
I am not #teamhourly or #teampackages—I am #teamboth 😉
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