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Why you should bill by project instead of hourly

When setting the rates for your virtual assistant business, you have two choices. You can decide to bill your clients for each project completed, or for each hour of work you do for them. Both options seem to have their perks, but many prefer to use a flat fee rather than charging hourly. There are several reasons why it is better to bill for each project rather than the hours it will take you to finish the job.

Billing your clients on a per project basis will be easier for you to keep track.

If you wanted to charge an hourly rate, there would need to be extra steps taken to ensure that you record the appropriate hours worked for a certain customer. This can be time consuming, and can lead to errors in invoices and payments. Allowing your clients to pay you one fee will make it easier on both parties involved.

Many clients like to know upfront what they should expect to pay for virtual assistant projects.

With an hourly rate, you can estimate the time it may take you to finish a job. However, things can happen that may increase or decrease your time. An increase may not make your client happy, and a decrease could mean you are short changing yourself. A flat fee will allow customers to know the exact expenses of the service before they agree to give you the work.

Clients who outsource tasks to virtual assistants tend to pay more for a flat fee than an hourly rate.

If you decide to charge $200/hour on a project that would take you one hour to complete, you client may think that is an outrageous price for so little of your time. However, if you were to charge $200 for the entire project, the client is more willing to accept the rate. It seems to be a psychological factor where the client feels as though he is getting a great amount of work for only $200, as he will not know how long it will actually take you to complete the tasks. In this case your client is paying for skill. Think of this: If you see a surgeon for a 15 minute surgery you do not pay him 15 minutes of an hourly fee, you pay a set fee. In this case it is no different.

Another way to look at it is this:  When you do a task over and over you become more and more efficient, but when you charge hourly you actually make less money the better you become at your job. This is not right and can be avoided by charging by a project instead of an hourly rate.

How do you charge your clients? Which way do you prefer?  If you hire VAs what do you prefer?

About Stephanie Watson

Mom | Wife | Virtual Assistant | Content Strategist
Stephanie has been working from home for over 20 years as a virtual assistant, template bender, and content writer. She's currently transitioning to business coach. You can learn more about her at her website http://www.barrypublishing.com.

Comments

  1. Very good tips! Really is a refreshing look. Thank you for taking the time to write this for us.

  2. Great post…. a lot of information that we as va’s tend to overlook. Thanks for posting that! 🙂

  3. Hmmm…I never really stopped and thought about this but it makes perfect sense. I’ve been a VA for almost 5 years now so I’m pretty dang efficient at certain things I do on a regular basis (lol). So, after reading this, it made me really stop and think about how my per hour rate does actually make me lose money because it takes me less time to do certain projects that it did back in the beginning. So, I have some thinking to do about how to implement new rates based on projects instead of by hour.

  4. I struggle with charging appropriately and I think it comes from still trying to get over an employee mindset. Employees get paid by the hour. Plus it’s really easy to undervalue our worth. We really are worth far more than we think. Thanks for giving a great perspective.

    • The employee mindset is one that is difficult to overcome. What is funny is that now that I do ghost writing, I have no issues with charging “by project” regardless of how much time it takes, the fee is the fee.

      It took me longer to transition with VA work, and I still have one hourly client, who is reluctantly switching at the end of this month (or she may be moving on to another VA) but the rest are all on a per project basis.

      Note: It’s really safer for your client if you charge per project or in packages rather than hourly due to the often confusing IRS rules on classification of employee vs contractor. Being paid by project leaves no room for confusion, you are not an employee.

  5. Hey Stephanie 🙂 I agree with this for a lot of projects but I do find that our design firm does a lot of hourly work – especially when digging into WordPress. The client likes knowing that they’re not going to pay for more time than was needed.

    • I agree with you. In my VA contracts, I have package rates for things that can be package rates, but I still have hourly rates for things like phone calls, for instance.

  6. Clients pay for your expertise, not your time, so if you get a project completed in less time than you estimated, it’s a bonus for both of you. I’d add don’t forget to factor in your expenses, when setting fees, to those just starting out on their own.

  7. I’m not a VA nor do I need to hire one (yet) but knowing this information is still valuable. I will pop it in my memory bank for future reference. I might need a VA down the track.

    Thanks:-)

    • Some VAs will always prefer to charge hourly and that is perfectly fine. I just like giving an alternative, one that is working great for me.

      Incidentally, my daughter is testing the waters with being a VA and the ONLY thing she does is schedule posts into WordPress and format the posts, inserting pics etc.. and she insists she needs to charge hourly. 🙂 lol

  8. Great post Stephanie! I have recently taken my old hourly services and created packages. I still stumble over trying to explain the “benefits” of my VA packages, so when potential clients come to my website they can read what all they will get for the price.

    Thanks! Steph

  9. This is a really great read for me. I appreciate this explanation and will certainly consider it as I am beginning to build my VA business!

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