I spend quite a bit of time pondering VA rates, both from the perspective of a client and the virtual assistant him/herself. I was reading a blog written by someone looking to partner with a VA – which is great – however, the first comment was one that made mention of how overpriced VAs are. I hate reading statements like that because it makes anyone who reads it and is unfamiliar with the VA industry question the value of VAs.
A couple of months ago, I was on the phone with a potential client who came around to the rate question and when I responded with a figure, I was told that my rate sounded fair and that he refused to work with VAs who charged too little.
Things didn’t work out with that client for different reasons, but that’s the right attitude to have. (I hope that both VAs and clients of VAs really think about this!)
Still think you would rather work with the cheapest VA you can find?
There are a couple of things you should think about. First of all, a little disclaimer: I’m not in any way-shape-or-form saying that less expensive VAs turn out a lower quality of work, and if you need a one-off project completed, by all means, go for the lowest bidder.
But here’s where you have to be careful. Pretend for a moment that you found a wonderful VA to help you out with a couple of small projects. She charges $30 less per hour than the industry average and you are feeling very good about your investment. You’re getting such a good deal that you decide to enter into a retainer agreement with her, and your rate gets even lower! Good deal for you! Right? Well…
You are loving this arrangement. She’s at your every beck and call, she’s efficient, she’s learning all about your business. You increase her hours – you’re making more money with her help! This is working! You are becoming dependent on this VA. You have evenings and weekends free while she works hard to keep you on top of everything. What would you do without her?
Meanwhile, your VA realizes that she’s charging too little. She’s very busy with your projects, in fact, she’s busy enough that she decides to raise her rates for new clients since she doesn’t really need that much more work. Then she gets a project at that higher rate and it feels good to get paid closer to what other VAs make. So, she decides to market a bit more so she can get more projects at her new rate, and they start coming to her.
The new rate she’s charging is closer to what she’s worth, and she’s attracting clients who will pay that rate.
How long do you think your perfect VA can stay with you without a rate increase when her other clients pay twice as much as you’re paying?
Or…if she never raises her rate and is booked solid on that lower rate, how long will she be able to afford to stay in business? Probably until her taxes are due and she realizes how expensive and time consuming it is to operate a business and she doesn’t have enough hours in a day to make what she has to at that rate.
Partnering with the lowest bidder is absolutely your decision of course, but it’s not without its risks and I hope you think about that when you decide to start working with a VA.
Jamie, you are RIGHT ON. I recently wrote an article for my local chamber of commerce and briefly touched on the subject of VA rates. People need to understand we are running a business and we have to cover our own expenses, just like they would have expenses if they hired a legit “employee”. You simply CAN NOT turn a profit in North America charging what I’ve seen some VAs charge…unless the VA is outsourcing work to those who are charging even lower rates, which is a risky business decision in my opinion.
What a great post Jaime! I won’t lie, I’ve made that mistake of offering a lower rate to begin with and it’s definitely a catch-22 kind of situation. You want to get that first client or two so badly that you make a poor business decision and then you realize your value and have to make some choices later on about how you’re going to manage rate increases to be more appropriate for what you are offering.
I think it’s a constant challenge in the VA industry to both educate our clients about value and remind ourselves of it too!
Thank you so much for posting this. It is important that business owners understand that they do get what they pay for and that virtual assistants are business owners as well and we have to pay for our own overhead.
Tawnya,
I agree that sometimes the lowest bidder is exactly what you need for a short term project, but when you’re looking for a VA for full time work, take a good look around and get the right one. Yes, rates should play a part, and should be a factor in your decision, but you get what you pay for. Most VAs I know are very educated in the services that they provide and should charge what they are worth. I haven’t had too much of a problem asking for and getting the rates I request. Maybe I’ve just been lucky.
Thanks.
Kathy Zengolewicz
What is the “industry average” rate for a VA? I hate worrying about pricing.
I tend to see an average rate for a Virtual Assistant being on a scale of $25-$45 USD depending on skills/specialties.
Tawyna:
I agree with your post — I find many clients see hiring a VA as a way around the high charges of a temp agency so they think we should all work “really cheap.” Also, since much publicity has been given to outsourcing this work overseas where rates are MUCH lower, many new clients already have a distorted idea of what we should be charging. While I have a few clients for whom my rates are lower, they are clients who started with me and have stuck with me through the years. Periodically I raise their rates in small increments and they understand that I am still charging them less than the majority of my client base.
However, many months ago I wrote about my personal “BIG ISSUE” with pricing in a post titled “IF YOU PAY PEANUTS, YOU GET MONKEYS!” (http://budurl.com/nwq9) In most cases, you get what you pay for. And nothing is worse for us as virtual assistants then for prospective clients to have bad experiences with inexperienced or unqualified VAs. It’s easy enough to tell someone ‘you get what you pay for,” but that never removes the bad taste in their mouth over the poor service they’ve already received.
As a profession we have to work as hard at educating clients on the pitfalls of working with inexperienced VAs as we do at selling them our skills and services.
Thanks for your comments everyone!
I am the first to admit that when I started my business, I just picked a number out of mid-air which was a terrible idea because it was low and when I came to a point where I needed subcontractors, most charged more than me and it was just a big mess. It also takes a long time to get to where you need to be because you can’t just tell your clients your rates are going up $10 an hour effective immediately!
To Nanette – I strongly encourage you to worry about what you need to make, instead of looking just at the average being charged. You have to figure out how many hours you actually can work, how many hours you need to spend building your business and how much your going to have to save to cover your taxes.
Janet Jordon, a leader in the Virtual Assistant industry at http://virtualassistanceu.com who I had the pleasure of conversing with before she passed away said the exact same thing which I never forgot…”“IF YOU PAY PEANUTS, YOU GET MONKEYS!”
There is no question that rate can be a deal-breaker. In my early days, I did drop my rate when I felt that I might not be able to land the client without doing so, and it was a mistake in every sense.
Still the other day, a prospect asked what my rate is. I told him, and he suggested that although he thought my rate was probably fair, he would go with another VA who provided the ‘same service’ for less than half my rate.
Happens all the time …
“Research the candidates for the project to get the best fit. Choose a virtual assistant who has the skills and tools to do the task. Simply hanging a virtual shingle does not a virtual professional make. A newbie VA can easily underestimate the demands of professional virtual assistance. Some of that naivete can show up in unusually low rates. RESEARCH!!” My advice to clients when researching and hiring a VA. Blog post that was inspired by this post.
VAs do not discuss and plot rates at VAnetworking.com. But, they network to learn who they are and how to recognize their worth as professionals. Then, to express that to potential clients.