One of the biggest challenges often faced as a self employed virtual assistant can often be deciding what hourly rate to charge. There’s a wide spectrum of questions to ask yourself before you commit to your hourly rate figure, as well as doing mathematics to check your hourly rate is viable. That being said once you have conquered this challenge, setting your hourly rate will:
- Avoid that uncomfortable feeling when discussing money with clients;
- Never make you feel undervalued;
- Help with building a portfolio of great clients who are right for you;
- Never leave you wondering whether your bills can be paid and avoid the shock of unexpected tax bills.
5 Things to Consider When Setting Your Hourly Rate
1. Will You Earn Enough
When you are charging for your work by the hour, the amount you can make is capped by the number of hours you are willing to work each day. And, unlike when you are employed, you won’t make any money when you take time off due to sickness or holidays.
When you set your hourly rate check that based on the number of hours you intend to work less any estimated time off will translate into enough money for you to live 12 months of the year.
Don’t price yourself too low just to win work. Not only will you find yourself working all hours to just make ends meet but you may also attract difficult clients looking for a cheap service who don’t value your talents and can end up being difficult payers.
2. Consider Lost Time
In reality when you are a self employed virtual assistant, you will be responsible for finding work, dealing with your won admin such as bookkeeping, invoicing and building your social media profile.
This work is non-chargeable – time spend for which you won’t earn any money from. So make sure your hourly rate to cover administration time too otherwise you may find yourself stretched thinly between chargeable and non chargeable activities while you try to earn enough money.
3. Charge What You’re Worth
Once you have calculated your hourly rate mathematically stop and consider the figure. Your experience and qualifications will mean you can add value to your clients above and beyond other virtual assistant.
Good people are hard to find so don’t underestimate yourself. Unfortunately there are a lot of potential clients out there who try to low ball the self employed and freelancers. So once you have set your hourly rate don’t be afraid to stand your ground.
Take some time to research the market for virtual assistant. Speak to other virtual assistant you know, check job boards and recruitment sites to try and gauge what the market rate is.
- Don’t price yourself too high – you simple won’t find work or be considered by potential clients
- You may find your can’t earn what you need or feel you are worth – unfortunately certain services have been devalued over recent years and you may find that you may have to admit that you won’t earn what you need being a self employed virtual assistant.
5. Consider the Costs of Be Self Employed
When you are self employed you are responsible for buying everything you need to find work and deliver it. These are things that if you work for someone they would provide for you, but as you are self employed now fall to you to pay for and include:
- Website build & management
- Increased household bills if you choose to work from home or rent if you want to work somewhere else.
When you are self employed you are responsible for business costs just like the big agencies, so make sure you incorporate overhead cost in your hourly rate. Otherwise you may find that you are paying for these costs personally.
How to Set Your Hourly Rate
When setting your hourly rate you should start by working out your monthly desired salary.
Next, start working out the costs of ‘being in business’. These are costs such as your computer, website, desk and travel. This needs to be added onto your monthly desired salary.
Then you need to work out the number of chargeable and non chargeable hours you will be working each day, as well as the number of working days you will have available each year taking account of sick days and holidays.
Don’t forget when you are self employed, taxes are your responsibility and you need to work out and pay tax on everything that your clients pay you. So it is really important to include tax as a cost in your hourly rate calculation to avoid the shock of unexpected tax bills.
Finally once you have added all your costs to your desired take home pay. Divide this number by the number of working hours and you have your Hourly Rate.
I’ve created an hourly rate calculator which, with a few entries based on your own situation, will work out your hourly rate. It takes into account you costs, working days and even estimates your tax, telling you when these payments are due to HMRC. Find it Here>>