I read today a newsletter that’s just been published online for the VA industry. Had some great information in it – it’s obviously tax time in the US! Along with it was a very useful article about how seriously VAs should take their businesses and the survey done in 2004 by the Brenner Information Group. The article is on page 6 of the newsletter (thanks Ramona). Please note that the figures quoted throughout the article are in USD and I believe a large number of those surveyed would have been in the US. However, the information is still very relevant for VAs the world over.
How seriously do you take your business and the services you provide? Are you charging appropriately? Do you have confidence in what you do and how you charge for it? The reality is if you are undercharging, you are not only damaging your own business (and undervaluing your skills) you are also damaging the industry as a whole. Clients won’t take us seriously or appreciate what we do, if they think they only have to pay ‘hobby’ rates. And let’s face it, if you only see your business as a hobby you are not going to be charging appropriately.
Before the year gets too far underway a good exercise for you to do would be to set up a spreadsheet of your monthly outgoings, and what you would like your monthly income to be. Work out how many hours you plan to put into your business (be realistic and recognise that there will be chargeable hours to clients and hours you spend outside of that on your own admin needs), then divide the monthly income by the chargeable hours to get an hourly rate. How close does that come to what you are actually charging? Could be a scary exercise – and one that wakes you up! In the survey it is mentioned that some VAs are only charging $10USD per hour for work they’re doing. If they are charging out 30 hours a week, 120 hours a month, that is $1,200 a month. I don’t live in the US so do not have a good idea of monthly incomings and outgoings but that seems it could be low.
May I suggest you look at the big picture first? What you need annually or monthly and then work backwards from there to get a good idea of what you need to be charging. I have a complete formula on how to do this exercise in a couple of my books if you want to look into this further.
And just so you don’t feel too bad, it actually took me around 2 years in business before I began looking at my business in this way too – I just kept doing the work and wondering why the invoices at the end of the month didn’t seem to match the time I’d put in. Once I changed my emphasis and focus on my business I began to track weekly and daily what I was bringing in so I knew how things were going.