One of the most important decisions you make as a service-based business owner is how you charge your clients for your support.
That’s why I recommend really sitting down and taking some time to consider all the options on how to set up your virtual assistant pricing. There’s countless different ways you can structure your services, but the two most popular are by hourly rate and by package.
These are generally the easiest for you as a new business owner to create and they’re easy for your client to understand and budget for. So today, I’m giving you the pros and cons of each one. That way, you’ll have all the information you need to decide which one you want to go with.
HOURLY VS. PACKAGE VIRTUAL ASSISTANT PRICING
There’s a constant debate in the freelancer world as to whether hourly vs packages are better. But in my experience, it’s really just about finding what it is that works best for you and what you want your lifestyle to look like.
Here’s a quick and dirty definition of each virtual assistant pricing structure to better explain both:
- Hourly Rate Services: This structure is simply charging your client a standard rate for the number of hours that it takes to complete their given tasks.
- Packaged Services: This is a list of specific tasks that are included in a set price as a stand-alone offering that your client purchases.
Now, let’s go over the pros and cons of each so that you can get a better sense of what you want to focus on!
PROS OF HOURLY SERVICE PRICING
The biggest pro of charging hourly for your virtual assistant pricing is that you get paid for all of the time that you invest in the work. You know that you’ll be paid for every minute that you invest in your client’s project, which isn’t always guaranteed with packages (we’ll get to that!).
It’s also extremely easy for you to budget time and know how much you’re working.When you are working a 9-5 and growing your business, you have to manage your time well. It can be really helpful to know that you have 2 clients that you work 20 hours a month for. Because then you know that you’ll never work over 40 hours a month and get overwhelmed.
Best of all, clients love the flexibility of it. Your services aren’t set in stone as to what you offer your client each month in a package. So they are able to use the time they have with you for more varied tasks. It allows them to continuously use your support when their business when their needs change over time.
CONS OF HOURLY SERVICE PRICING
The biggest downfall of hourly is that once you learn more about your client tasks and and complete the work faster, you’re essentially loosing money.
Because now you have to take on a higher number of tasks per client for the same amount of money to fill out your hours with them.
From the clients side, they often have fluctuations in their support needs based on the season. So they’re sometimes hesitant to hire to a virtual assistant that requires them to commit to a minimum number of hours within a given time period.
PROS OF PACKAGE SERVICE PRICING
Here’s where we see the other side of the coin on the “working faster for less money”. Because this is a packaged services’s top benefit.
When you offer the same service to a number of clients, you’ll naturally get faster as doing the same work over and over again. Over time, this will increase the amount of money you’ll make. Because clients will continue to pay the same price for work that takes you less time to do.
Packaged services can also allow you more flexibility in your day to day because the tasks you complete generally aren’t as time sensitive.
For example, if you write a social media post for a client once a day and schedule it ahead of time. You could create all the posts at the beginning of the month and not do anything else until the next month rolls around.
That can be really nice when you’re working around your kiddos, night classes, or 9-5.
CONS OF PACKAGE SERVICE PRICING
As luxurious as it sounds to have all the flexibility and extra money that comes with packaged services, there are several downfalls.
When you work on project-based packages that are stand-alone services (like a website design) versus packages that are retainer-based (social media management): You can constantly be looking for work.
Business owners only need certain services once in a while. So once you finish a project, you have to look for new ones which can get really. exhausting.
Obviously this doesn’t apply to things like social media management that’s consistently needed. Over time, you can also certainly build out a referral base to book services in advance. But it’s something to keep in mind when you decide what freelance rates are the best fit for you when first getting started.
The other major con of packages is that there is very, very easy scope creep.
This is when clients don’t realize what’s included or not included in their package and expect you to take on extra work beyond what you budgeted in your price. It can create tension between you and your client when you tell them no, and it tends to blur some client/VA boundaries when you take on extra work to keep them happy.
WHAT PRICING YOU SHOULD CHOOSE
If you want a clear answer here, unfortunately, I’m not going to be able to give you one.
Because like I said before, I think it’s really important to choose what works for you based on where you’re at in your business right now.
When you are first starting out, I recommend that you start with hourly virtual assistant pricing before you create any packages. It helps you to get a sense of what you enjoy working on and how much time it takes you to complete the tasks.
If you have a ton of experience in whatever service you’re offering and you feel you have a strong grasp on the time factor already. Then you could hop right in and take advantage of the benefits that come with working on packages.
Here at Byte Bodega, we’ve found that a mix of both is really the sweet spot for us!