Tip of the Week: 9 Steps to Calculate Your Pricing

 

     Pricing Your Services

 

 

This question comes up more and more as new Virtual Assistants set up their businesses and experienced VA’s contemplate adding new services to their company.

Here are 9 steps to set up pricing for your services.  I’ll use a basic service first.

1. Name the service and what it includes.  Word Processing, for an example, includes the typing, formatting, adding pictures, tables, bullet points, headers and footers, etc. and don’t forget the time for spellchecking and proofreading.
2. What is your typing speed?  Generally Word documents are about 500 words long but can be less when you include Headers, Sub Titles, larger or smaller fonts, indentations, pictures, charts, tables, etc.
3. What is your level of experience?  If you are at the expert level, you have a general idea of how long it will take to complete the document.
4. Calculate in the added time if it is handwritten or a transcription job.
5. Give yourself a buffer of extra time for unexpected additions/deletetions/changes.
6. Research other Virtual Assistants sites and what they charge for the same type of service.
7. Are you going to price your services by the hour only?  By the project?  On retainer?  Will you offer discounts for guaranteed hours?  Do you reduce your rate slightly if it is a project or on-going work as opposed to a one time job?
8. What payment options have you set up for your clients?  Cash (local clients only), cheques, credit cards or Paypal?
9. Do you offer discounts for payment on receipt as opposed to the 15 or 30 day option?

For your niche services like internet marketing (which involves many different services) or blog marketing or social media marketing, again you need to decide if you will offer hourly rates, packages/bundled services or discounts.  If you are new to a particular niche service, research with other VA’s or their sites.  You cannot expect to charge clients when you have a “learning curve”.

Don’t forget that you are calculating your time to do the work, that you are providing the expertise and the software and equipment.

In the end, if you are underpricing to get the client, you will feel undervalued.  If the major decision factor for the client is pricing, often you will experience trouble collecting your fees. 

If I have missed anything, please feel free to comment.

Diane L. Coville, ALTERNATIVE OFFICE ASSISTANCE

www.alternativeofficeassistance.com

Tip of the Week: CONTRACTS

I am late once again in posting to my blog for last week.  Something I wanted to avoid.  But client work does come first ALWAYS.

Last week ended with a distasteful task which every business owner faces at some point.  I am proceeding with collections on a client.  It has gone beyond collection letters and other procedures.  I have been forced to take it to Small Claims Court.  I have  been through this once  before.  In that instance, I filed the papers and proceeded myself.  The case was found in my favour but the “client” disappeared and although I had paid court costs, I was unable to collect.  That’s when I started submitting a contract to be signed by each new client and myself.  And such was the case with this new Small Claims Court Case.  A contract had been signed and agreed upon but the client refused to pay anyway.  Now we have gone beyond the “settlement” step to an actual court case, a very lengthy and costly procedure.

In almost every small business, especially in the Virtual Assistant industry, a contract is a mandatory step.  Many contract templates are available on many Virtual Assistant Groups websites.  But since it is a legal document and has to be edited to reflect your individual business practices and procedures, I recommend you have a lawyer review it to make sure it reflects exactly what points you need to have covered.  Or see a paralegal (which is what I did).  When you have an initial meet with new clients, whether it be for on-going tasks or a project, and whether it is an “in person” meet or a telephone consultation, you must clarify the customers needs and expectations as well as your expectations and clarification of the services/goods you are providing.  The contract clarifies that you and the client “are on the same page”.

The contract should address these key points specifically:

• Hours that will be needed to provide the service
• The cost involved as well as an indication of the taxes that will be added.
• Any discounts/adjustments to the total due.
• Method of payment and when required.
• Timelines for the beginning of each task/service and the expected date of completion.
• A description of every task/service that is required by the client.
• A non-disclosure section that deals with the clients privacy.
• Any special requirements of the client such as reports, status updates, consultation calls, etc.
• Terms of employment such as termination of the project/services by either the client or yourself, e.g. do they require notice or do you and how long,  Will there be penalties if the contract is terminated before the end date specified.

Once you have the client sign the contract, sign it yourself and return one to the client and one for yourself.

If, at any time, the client’s requirements change, submit an amended contract to reflect the changes and the costs involved and have both your signature and the client’s on the amended document with a copy to each of you.

By following these procedures, you are proceeding into a professional agreement with the client and, as well, will clearly define the terms, expectations and costs so no miscommunications can occur.  If the client is reluctant to enter into a professional agreement, you can be pretty sure that there will be further problems down the road and you may have difficulties with receiving payment for work done.

We are having a bone chilling week of weather here in South Central Ontario.  I am so looking forward to Spring approaching.  Have a good week, everyone!

Tip of the Week: CONTRACTS, INVOICES and GETTING PAID

This week did not start off on the right foot.  First thing Monday morning someone ran a red light and smacked into the drivers side of my car.  I often take my car for granted.  It gets me wherever I want to go.  But watching it being towed away to an auto body shop for an undetermined amount of time made my thoughts jump to my calendar for the week and my scheduled tasks and client deadlines and how I was going to meet my commitments.    I was thankful that the police who came to the scene of the accident offered to drive me home as my car was towed in the other direction.  Luckily, too, my insurance broker and agency arranged for a courtesy car for me the same day so, even though I spent most of Monday on the phone co-ordinating information between the broker, insurance agent and the Car Rental agency, I still accomplished almost all of the client work on time and on budget.

With Virtual Assistance, before you accept an assignment or client, discuss the clients needs and expectations in order “to be on the same page”.   I find, if I am asked for a quote, I am clear on all the details before I can provide a true quote (not just a guesstimate).   When you start your business, one of the first things that should be done is create a contract which you can submit to the client before work is started.  The contract should clearly state the duties in detail, timelines and pricing per hour or per the job.  As well, payment details should be included.  Are you requesting a deposit up front?  How much?  Are you invoicing at the end of the job for the balance due?  When do you expect payment – in 10/15 days or at the end of the month?  Are you charging interest (and at what rate) if payments are overdue?  All these details should be clear and agreed upon between you and your client.  It protects you and your client and prevents any misunderstandings or unclear expectations.  This can also be applied to other businesses who provide services and/or products.

Two more weeks until Christmas and the New Year is in three weeks…  Are you ready?

Diane L. Coville

ALTERNATIVE OFFICE ASSISTANCE