Determine Your Billing Practice
The compensation that you seek will be a function of your education, experience and what the client expects of you. Secretarial work and word processing most likely will receive less pay than accounting, web designing, computer software and hardware consulting or doing Internet research. You will set your fee according to your abilities. However, it is common practice to charge one common rate for all tasks. In other words, if you are doing accounting work and word processing work for one client, you would charge the set rate agreed upon between you and your client. This should be made clear with your client at the beginning of your business partnership.
A total VA practice includes a wide variety of projects and tasks; some requiring little technical ability, for instance, doing mailings, and some that require high degree of knowledge about your client’s company and the Internet, such as research and working on specialized software programs.
A negotiated fee must be agreed upon up front between you and your client. You determine the method for billing and payment. It is common practice to bill on an hourly basis. It is important to emphasize to your client the date you intend to (e)mail your invoice and the date the invoice is due. Billing by e-mail is the preferred method unless your client requests and you agree to another method such as regular mail.
When determining your hourly rate, keep in mind that you are running and maintaining an independent business that will include paying for equipment, taxes, rental, supplies, insurance, utilities and miscellaneous items.
It is very important to use a time tracking software such as TraxTime (http://www.spudcity.com) to assure accuracy in billing your client for hourly work performed. Your client is paying you for the time you spend on his/her projects, not for breaks, not to answer the phone and not to maintain your equipment.
You will want to keep detailed records about direct expenses for specific clients. Some examples will be:
- Special paper supplies
- Binders, folders, etc.
- Telephone: long distance calls made on behalf of your client
- Special purchases for a client such as software that is requested by the client
- Press Release costs
- Subscription costs
When purchasing services and products for your client, you can either ask your client for their credit card number or purchase it yourself and bill them as an expense at your billing cycle time. I recommend that you use your client’s credit card information for any subscription accounts you set up on their behalf. An example would be Aweber.com for newsletters or 1shoppingcart.com for their shopping cart. You don’t want to be caught paying the bill in the event your client misses payment to you.
It is not normal practice to detail these charges to your client; only to bill as expenses. This is a trust relationship. You need to be honest with your client and your client needs to trust you. However, you should always keep records of client expenses and be prepared to provide them upon request or questioning.
What is Your Value?
Charge What You are Worth: It is not uncommon for VAs to undersell their services. Let’s face it, it can be scary to ask people to pay you for a new service that you provide, especially because you have not built up the confidence within that you ARE a VA and you are the best at what you do. Always keep in mind that you are a professional at what you do.
For most VAs in the start-up phase of business it can be a challenge to make the announcement to the world that ‘I am a VA’, I love it and ‘I am asking you to pay me well for it.’ Yet, this is exactly what you will need to do, right from the start!
Keep in mind that as a business owner who is in the stages of building a sustainable practice and business entity, you will have many expenses to handle and taxes to pay beyond what you will want to be earning for yourself. If you undersell yourself and your services, you won’t be in business long enough to help other people.
It is easy to think that by setting your price lower, it will take less time to attract clients. I assure you, this is not the case. Setting your price too low is a process that will slow you down and take you longer to recover. The bottom line is that people will value you and your service when you charge what you are worth. You will always have a learning curve of some kind when you are VAing. Start charging now.
There is a great section on this subject in the companion book, “How to Find and Work with a Virtual Assistant” at www.yourvirtualresource.com
$$ How Much Do You Need $$
What do you need to maintain your current life style?
What will it take to improve your lifestyle?
Fixed Monthly Expenses NEED WANT
- Rent/Mortgage Expense
- Utilities (Gas, Electric, Water)
- Insurance (Medical, Life, Home, Auto)
- Loan Payments
- Credit Card Payments
- Cellular Phone Bill
- Internet Provider
Fixed Monthly Total
Variable Fixed Expenses
- Personal/Household Items
- Entertainment Expenses/Recreation
- Professional Memberships/dues/meetings
- Medical/Dental Care
- Charitable Donations
Variable Monthly Total _________________
WHAT YOU NEED TO EARN? (Fixed + Variable) $____________ $___________
Prepare a Business Plan
Writing the Plan
What goes in a business plan? The body can be divided into four distinct sections: (Courtesy of United States Small Business Administration Web Site – partially listed)
1) Description of the business
Addenda should include an executive summary, supporting documents, and financial projections. The business plan is necessary for you to understand your goals and to refer to as you develop your virtual assistant practice.
Although there is no single formula for developing a business plan, some elements are common to all business. They are summarized in the following outline:
Elements of a Business Plan
1. Cover sheet
2. Statement of purpose
3. Table of contents
I. The Business
A. Description of business
F. Business insurance
II. Financial Data
A. Loan applications
B. Capital equipment and supply list
C. Balance sheet
D. Breakeven analysis
E. Pro-forma income projections (profit & loss statements)
Detail by month, first year
Detail by quarters, second and third years
Assumptions upon which projections were based
F. Pro-forma cash flow
III. Supporting Documents
Copy of licenses and other legal documents