How to set your freelance rates

How to set your Virtual Assistant rates

One of the hardest things to decide when you become a Virtual Assistant is how to price your services. If you charge by the hour then you’ll never earn more than there are hours in the day, which is why it’s better to get a client on a retainer or charge a project rate. “But how does that work and how do I do that?!” I hear you cry. Well let’s look at those options in more detail.

Hourly rate

If you charge by the hour then you’re limited by the number of working hours in a day. However, not every hour is billable. There’s your own admin to sort out, documents to familiarise yourself with, email to write and reply to, phone calls to take and make, marketing to do, accounts to balance and 1000 other bits and bobs.

I read once that there is actually only around 5 billable hours in a day.

The other downside to charging by the hour is that you become faster over time – which means you’ll actually end up being paid less money the better you get.

Remember the extras

And don’t forget that when you worked for a company you also received:

  • Holiday pay
  • Sick pay
  • Maternity leave
  • Petrol and mileage
  • All your equipment including desk, stationery, phone storage space etc
  • Utilities including broadband, phone lines, water, heating, electricity and rent
  • Free coffee and tea
  • Tax and national insurance being dealt with for you
  • Free skills training
  • Guaranteed hours
  • Job security

And now you don’t.

So when you’re working out how much to charge remember that you’ll be at home using water, heating, broadband, your phone and electricity. You’ll also be buying all your own stationery and paying for all the extras yourself. Yes, you can put a lot of it on your expenses, but it still adds up.

Project rates

Psychologically, this works better on many levels because you can charge more and still keep the client happy because you’re providing value.

Clients always think tasks take you less time to complete than they actually do, so if you give them a total price for the entire project (incorporating time spent on the task plus all the extras like email and phone correspondence etc) then they know how much it will cost them and you know how much you’re getting paid.

They aren’t quibbling over your timeframe as only you know how long the project will take you. Remember that you’ll be faster and better the longer you’re a VA so tasks won’t take you as long to complete and you’ll earn more money for working fewer hours.

This is the business model all freelancers strive to achieve!

It’s worth noting that project rates are always dependent on the task. So I would quote my hourly rate on my website but then say retainers and project rates were available upon discussion.

This way the client had a rough ballpark figure of my prices but we could have a chat and come to an agreement if they wanted a project price.

How to know how long a project will take

There are a few ways to estimate how long a task will take although if it’s a task you’ve done many times before then you should know how long it’ll take you.

One example is to run a mock version yourself and time it. Or you could ask the client for a sample of data. That way you have something to start with and you can multiply it to scale.

Add an extra 33% to the time you estimate because tasks always take longer than you think.

The most important thing is to make sure you have a full understanding of the scope of the project, so send the client an email summarising the task as you see it (“I understand the task to be X, Y, Z etc”) and then quote accordingly.

I would always say something like “this quote is based on the perimeters of the brief provided. If the brief should change then so will the quote.”

You need to BOTH agree on what the task is and what you will be billing them for.

If you have provided a rough estimate then allow for a contingency budget depending on the scope. Have this as a clause in your T&Cs and make sure this is clear from the start.

You will occasionally get it wrong and end up undercharging but then you know for next time and you most certainly will never make that mistake again!

Charging per project is how you will make the most money.

Retainers

A retainer is a great option when you have a client who needs bitty things done. Some clients need tasks done here and there and, if you charge by the hour, it often won’t add up to much.

The great thing about retainers is that the client knows what they get for their money and what their invoice will be, and you know how much money you’ll be getting each month whether they use up their allotted hours or not.

Plus retainers are always charged in advance for the month ahead, not the month just gone.

So, if you charge the client for ten hours of work at £27 per hour, they know they have secured ten hours of your time and won’t have to worry you won’t have availability for their tasks, and you know you’re definitely getting £270 at the beginning of the month.

Discounts on block bookings

Some VAs offer a discount if the client books a certain amount of hours but this isn’t that common in other freelance industries. I think it’s just another example of VAs trying to be ‘helpful’ which translates as giving their time away for free!

Personally, I don’t think discounts are a good idea because every hour you’re working at a discounted rate is an hour you could be working at your full rate for another client. Clients are paying to retain your time, remember; they just want the security of knowing you will always have time for their tasks.

If a client wants to hire you for your specific skills and experience they will be more than happy to pay your going rate.

Rolling over hours

Your client is paying to retain your time and guarantee your availability so you should bill them for the hours they’ve requested whether they use them or not.

Some VAs feel ‘guilty’ about this but you’re a professional business owner and this is actually how retainers work – it’s actually the entire point of them and how you make your money.

Just remind the client how many hours they’ve used up. It’s not your job to Mother them.

It might help to think of a retainer in the same way as you would a gym membership.

If you only go to the gym twice in one month (or not at all) the gym is not going to offer to roll your subscription over because you didn’t use the facilities you signed up for.

Nor would Netflix offer to roll over your payment if you decided not to watch any shows that month.

Also, if you allow a client to roll over their hours you will never know how many hours you will be working that month which means you can’t plan your time, you’ll lose money and your life will be chaos.

Minimum retainer hours

Some VAs only offer a minimum number of retainer hours. When asked, the more experienced VA in my VA Handbookers Facebook group said ten was the minimum number and for these reasons:

“My min is 10hrs a month. I used to offer 5 but they never move up from 5 and also, 5 hr people are quite hard work! You just can’t make a big enough impact in 5 hrs.”

“My minimum 10 hours. It takes time to really dig in and get to know a client and their business, and less than that in an entire month does end up feeling like you’re always playing catch-up and “Oh yeah there’s this other thing, but it will have to wait…” And yes, the ones who are on very small packages often end up being the most high-maintenance.”

“I used to do 5-hour packages but soon got rid of them as they were a real pain. I don’t take people on retainers unless they need at least 10 hours.”

How to suggest a retainer

Your goal is to get a client on a retainer but only give them this option once you’ve been working together for a while and have proved your worth to them. Neither of you knows if you like working together yet – you don’t want to get saddled with a bad client and they don’t even know if you’re good at your job yet.

A client will rarely sign up for a retainer before they’ve spent some time working with you.

The main thing about selling anything to anyone is that you always have to outline what’s in it for them and not you. So you could say something like:

“Hey, we’ve been working together for a few months now, I love working with you and I know you’re happy with my work as well; your tasks always seem to take around x hours so why don’t we set up a monthly retainer instead of billing by the hour.

This way you’ll always know how much your invoice is going to be, but more importantly, you’ll be secure in the knowledge that I actually have the time put aside for your tasks.

My business is growing quite quickly and I want to make sure I always have availability for you.”

How much should you charge?

According to the Society of Virtual Assistant’s annual survey, the average rate for a VA in the UK is around £27 an hour. My Facebook group members inform me that the average hourly rate in the States is between $30 and $60 depending on expertise and experience.

I charge £30 an hour (I specialise in social media analysis and other techie services) but clients are usually given project rates due to the nature of their tasks. So I might quote £x for setting up a 10-email newsletter sequence but the quote will vary depending on the task because no two projects are exactly the same.

Remember that you will need to add a minimum of 25% (I’d err on the safe side and go with 30%) to your rates to cover tax and other expenses. So if you were thinking about charging £22 an hour then multiply £22 by 1.25 and quote around £27 an hour.

Asa rule of thumb, do not go below £25 an hour in the UK and $30 an hour in the States.

Why £27 an hour?

Below is a post by one of the members of my VA Handbookers Facebook group on how she worked out her hourly rate. It’s a really popular post and one we refer back to time and time again.

“I’ve seen a lot of posts recently about people considering offering a discount, lower rate, free trials etc so I did a little exercise to work out how much it really costs for me to be a VA. This is quite a long thread but hopefully worth it if you’re doubting your hourly rate.

Start with the basics per hour:

  • Minimum UK wage = £8.72 (wait I come back to this**)
  • Business insurance = 3p (due to the type of work I do I took out personal indemnity insurance)
  • National insurance = 15p (self employed contributions)
  • Tax = £1.74 (20% of minimum wage)
  • Simplified Working from Home Allowance = 22p (based on HMRC self-employment guidelines)

Total = £10.86 per hour

** I’d like to be earning more than minimum wage so £15 an hour seems fair and if I got a new job I’d be looking for a pay increase. Plus, I do have 14 years of experience.

So, new hourly rate = £15

But hang on – I don’t want to work 35 hours a week anymore. Okay, 5 hours a day seems fair enough. Hmmmm… £15 per hour x 35 hours = £525. Divide that by 25 hours = £21

Right, new hourly rate = £21

But wait! I need to make a profit as it’s a business after all. So, what’s a healthy profit margin? Google says 25% so £21 divided by 4 = £5.25. That makes the new rate £26.25

New hourly rate = £26.25

Ooops, I forgot to add admin, website costs, and training and there’s bound to be other annual costs I’ve not included so let’s round it up to £27.

Well, what do you know, £27 per hour is a good rate!

Final hourly rate = £27

I used some science and a few estimates but it’s roughly about right. But importantly, no longer will I be justifying my hourly charge in my head!”

Mindset is key when it comes to pricing

Imagine if you wanted to hire an Accountant or a Web Developer and when you spoke to them they seemed to lack confidence in their skills and were apologetic about their rates.

You’d be worried. 

Now, this sounds harsh but if you don’t think you are good at what you do, then you’re going to struggle to run your own business.

You are a professional business owner and it’s important to come across as confident in your abilities and your fees – even if you’re new and don’t feel that way inside. This is why I always recommend that you start out by offering what you know.

If you do this then you’ll know how to do the tasks, you’ll know what to charge, you’ll know who to approach and you’ll know how to market your services.

If you offer or take on tasks that you have no idea how to do when you start out, the opposite of the above will be true. Plus, if you mess up your confidence will take a beating, and you’ll start to question whether you’ve made the right decision.

Don’t price yourself too low

It’s important that you position yourself well and a client can see that you’re good at what you do. If you’re really cheap people may think your work will be of poor quality and that you don’t value what you do.

So they won’t either.

People who are looking for a cheap deal will always go for the lower rate anyway so don’t try to compete with other VAs on price because there will always be someone cheaper than you and you do not want to be in a race to the bottom.

If you go in too low then it will be much harder to raise your prices later.

It’s also worth knowing that the previous average UK hourly rate of £25 an hour was set after the last recession because the cheaper VAs couldn’t afford to stay in business.

It’s much better to pitch yourself as having a speciality and charge accordingly.

It’s a fact that many people won’t understand or appreciate the value of what you do, but there are plenty of people on the planet who will.

You shouldn’t waste your time on someone who just wants the cheapest price instead, you need to focus your efforts on finding clients who are looking for a fantastic service and who are happy to pay for it. This is why you should focus on leveraging your niche.

Show your value and worth

You cannot underestimate the value clients place on you being reliable, consistent, easy to work with, great at communicating, a brilliant problem solver, and able to understand and anticipate their needs. They WILL pay good money for these qualities because they are actually hard to find.

You’d think every VA would deliver these things but they do not.

Many VAs communicate poorly with their clients, don’t update them on the status of their tasks, use personal problems as an excuse for missing deadlines, leave their clients in the lurch and mess them about.

So market yourself as being someone who is reliable, is good at what they do and knows what they’re doing. You can back this up with testimonials and case studies.

If you’re confident that you’re worth the money then your clients will be as well.

Be mindful of freebies

Sometimes you may want to ‘be kind’ to clients and end up massively overservicing them and giving away time for free. While a small amount is understandable, it can easily add up. For instance:

Imagine you charge £27 an hour and you give one client a free 15-minute catch-up call each week. That means you’re giving away one hour a month – which equals £324 a year.

And that’s just one client for just 15 minutes a week.

So again, while how you manage your clients is up to you, please be aware that time is money… your money.

Summary

While you will probably use a combination of pricing methods the most important thing is to be clear about how much you charge and never apologise for your rates.

Make sure your client always receives a top rate service (but don’t overservice them), knows what they’re being charged for (and when and how) and review your rates each year.

Resources and action

  • Watch the interview I held with a pricing specialist on how Virtual Assistants can improve their pricing strategy and mindset. There’s loads of actionable advice that will make an immediate difference to your income.
  • Watch this fantastic video called How We Sell: Men vs Women – then stop doing it!
  • Read my blog post on how to raise your rates. I even provide a proven email template you can use.
  • Consider investing in my pricing course and discover how to make more money without working more hours. The course covers next-level pricing strategies and shows you how to break through the hourly rate trap by charging project and package rates. I also discuss the psychology of pricing and introduce you to many pricing concepts you may not even be aware of.

46 Comments

Alison Biggerstaff

I’m still in the process of setting up. This has been a very informative post. Thank you

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Ish

Joanne, thank you for all the resources and advice.

Please could I ask you how the retainer calculation works? For example, if I am booked to work say 8hrs every Tuesday, how would you navigate those months with a fifth Tuesday? Does a retainer call for a certain amount of give and take in such a situation, or do you work on a timesheet basis, accounting for each hour spent working for that client? Thanks in advance!

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Joanne Munro

Yes, it’s a specific number of hours delivered over a calendar month. (1st to last date).
You use a time tracker (such as Toggl) and can also send a copy to the client if they would like you to do so.

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Helen Dyer

Hi there, as a VA for a year now – yay! I am braving the storm of asking for retainers from my clients, for all the reasons above. Can I ask do they need a contract for this, or would an email outlining the terms be suitable? Months notice of termination etc as normal? I also have to admit that none of my clients have contracts from me but I have contracts via their companies?? I need to sort this I know! Eek!

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Joanne Munro

Hi Helen, you definitely need a contract for any work you do because you will definitely regret it at some point if you don’t. It marks you out as being a professional business owner and protects you from being sued or screwed.

I sell a contract which includes your T&Cs and you can find it here. It was written specifically for VAs by an international contracts lawyer and is updated and resent to buyers free of charge any time the law changes.

You can read more about contracts here on my post called ‘Should Your Client Sign a Contract?’

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Awkward Prospective Client Questions: Answered - JULIE SYDENHAM

[…] I did my research when I decided to go freelance- I wanted to charge a fair rate for a great service and, after lots of snooping at other VA websites and a check through lots of VA mentoring blogs, I came to the obvious conclusion that the industry norm is £25 per hour. The reasons for this I won’t bore you with here but if you’d like to know the ins and outs you can head to Joanne Munro’s fantastic blog on the subject here. […]

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Dayna Colvin

Thank you Joanne so very much for this wonderful well-written article! I appreciate your kind human approach. 🙂 Your tips and advice are very helpful!

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Tonita Haynes

Hi Joanne,
I was wondering if all 3 days can be used in the way rates can be set? I’m a newbie and I’m trying to set up. I’m specializing in medical/healthcare bc I’ve worked as a unit secretary in hospitals and have at least 6 yrs experience. Please help me!

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Joanne Munro

They can indeed. You just pick the rate appropriate for the task. A client is unlikely to go for a retainer if they haven’t worked with you yet and also you won’t have an idea of how long their regular tasks will take so hourly is preferable for both parties in the beginning.

So you could have one client on an hourly rate then move them over to a retainer, you could have another client who you charge a one-off fee for doing specific tasks and you could have a few other clients on retainers (and then by the hour if they occasionally go over their hours). You could even have a client who is hourly (or a retainer) then you quote a one-off project fee for setting up a newsletter etc. There are many tasks that should be package/project rates because otherwise you’ll never earn more than there are billable hours in the day. Moving away from an hourly rate is the goal.

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Dr. Karen

What a fantastic website you have! Well done! So I’ve been hiring my millenial kids to help me out since my formal VA retired to focus on her passion (dance). They are quick to learn anything related to internet and one is studying marketing and is good with video, webpages, audio. The other is learning the ropes and will in the future become a health coach. Right now, doing some work for me is helping her by offering her a job and she’ll need to know this stuff when she’s a coach. So neither are worth the $30-40/hour plus at the moment. Do you offer any courses that teach the actual VA skill sets (not necessarily how to be in your own business and attract clients since they already have a client – me – since they both will move onto their own coaching businesses in the future)? Thank you!

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Joanne Munro

Hi there and thank you very much for your comment. How lucky you are to have two children who are so eager to learn and get on in life! How marvellous.

I don’t actually offer any admin courses (a VA’s main skills are administrative) but there are many free admin courses online; Microsoft have a lot of good ones and so does Lynda.com. It doesn’t sound like your children actually need any specialist admin training if they are going to work in coaching though. Thank you again for reading and taking the time to comment.

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Toks

“Warning – One of the most important things I’ve learned (and I learned this the hard way AND more than once) is that anyone who questions your rates, is going to be a nightmare client. They just want the cheapest rate and they’ll be awkward, pay you late and sometimes try to get out of paying you at all. They’re not worth the hassle so give them a wide berth.”

This paragraph really resonates with me, as it’s something I’m currently dealing with right now. It sucks, but I guess you live and you learn!

Thanks for this brilliant article. I go back to it time and time again whenever I get a new client, especially for project work, which is a bit trickier to work out, but hopefully I’ll get better at it in time!

Reply
Melanie

Also in the UK, employers are required to contribute to a pension – something else that needs to be covered by your rate!

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Julie @ JAM Business Support Services

Hi Joanne, Thanks for this post, its been quite useful as I am just starting up a new VA business and wondering how much to charge, and if I should charge by the hour, pre-paid package or by the project. This has given me much to think about 🙂

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Shani

I also had another question that I forgot to ask. The author of that Lifehacker article wrote that occasionally a client won’t pay at all. He said to just accept this. That sounds awful to me, and I would not stand for it. Is it true and how do you deal with that? I did have a co-worker at my last job who was also a freelancer. He said he’d been waiting awhile for payments from a few clients. How long do clients usually take to pay? Does it just vary from client to client? Thanks so much for all the information and advice on this website! It’s helping me so much.

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Shani

Hi Jo, I am in the process of setting up my VA business and deciding on my rates now. After reading your post and the Lifehacker one, I don’t want to list an hourly rate on my site. I just want to list the project and the retainer options. Would not listing an hourly rate turn some clients away?

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Diana

Hi! After being laid off I decided to be a VA without too much research and by pure luck, I landed a dream client! She was searching for a pay per hour VA. I now know that isn’t ideal, but since I already gave her my price ($40/hr – it sounded good to me at the moment), I’m not sure if you have any tips for me regarding being paid per hour or what to include in the contract because that hasn’t been written yet.

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Joanne Munro

Hi Diana, there may be different laws in the states to the ones in the UK regarding what needs to be in a contract because we have to comply with the Provision of Services Regulation 2009. I would use the free ones on this website or ask other US VAs/freelancers for advice. Regarding being paid by the hour, I would use Toggl time tracker (I discuss this in my post on how to invoice and get paid) and try to move them on to a retainer after a month or two when you are both happy with each other. Good luck with your new client!

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confiance

Hello Joanne,
I loved this website, I am Confiance from Rwanda, I want to start VA in Rwanda, I have not heard anyone here doing this business but my concern is on pricing, and contracts. any assistance?
Thank you

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Chris

Hello J,
I am a property manager in real estate( residential high rise management) and I have about 8-9 years experience doing this. I feel there are so many levels of property management and believe I could offer my services in this specialty. Not sure if anyone is on this area yet.
Any advice on this front?

Also, how do I name my business?
Thanks and great articles.

Chris Chicago IL

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Joanne Munro

Hi Chris, good to hear from you. I have a blog post on how to go about naming your business that you can find listed on the ‘Start Here’ page. The Facebook group (link in the sidebar) would be a great place to find out if there are any other VAs who specialise in real estate (I think there are) and it would also be a good idea to find out if this was viable yourself by asking your contacts. I look forward to seeing you in the VA Handbookers Facebook group if you aren’t already a member.

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Alison

Very useful article Jo, please can you assist me in what packages you use as obviously the licences on the Microsoft Home packages are not acceptable for business and business packages are expensive for start-ups. Thank you

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Joanne Munro

Hi Alison, I do actually use the Home version as I don’t need Outlook and the other things they offer. I just wanted Word, Excel and PowerPoint.

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Lesley

WAIT! I need help. I’m a new VA and my heart nearly exploded when you said, about not every hour being billable, that there’s emails to answer… What exactly do you mean by that? When I’m communicating w/ a client via email or having a meeting with them or talking to them on the phone about work, I am billing them (I work at an hourly rate). Am I doing something wrong by that? It’s part of the job, getting instruction?

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Joanne Munro

Hi Lesley, thank you for commenting. No, you’re right, you DO charge for emails and calls that are completely client-related, but there will definitely be times where you will be doing your own admin stuff that isn’t directly client-related but will eat into your time such as sorting client folders and familiarising yourself with some of their systems. Unless a client says they’re happy to pay you to learn their systems then a VA should know how to use them if they offer that as a service. I don’t think I made that clear in the post and I can see why you thought that so I have amended it. x

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Rindy Anstee

Thank you Jo for another great article. I am steadily working my way through the course and all the various blog posts etc., so many great nuggets of information. The video is hilarious and really hits home – very, very helpful. “I am enough!” 🙂

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Peter Crispin

Hi ,I’m new to this I didn’t know VA,s existed until recently browsed 9th Internet how to get extra income. I’m 60 yrs old experienced Logistics Route Planner. With 32 yrs – 18yrs in Logistics Planning Management I am wanting -willing to work from home as a VA .I cannot see this anywhere on the VA websites .Believing it to be new how do I start up .Could you be honest and advise me is it a good idea. I’m sure given correct contacts it would work.
Pete

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Joanne Munro

HI Peter, good to see you. It is perfectly feasible for you to offer your services as a freelancer. Being a VA is kinda simple really: you offer your skills to people you know and people you don’t, you do the work, you get paid. That’s kinda it!

Many people over think it but it sounds like you have the skills, the experience, the knowledge, the contacts and the drive to succeed – and that’s all you need really. Everything you need on how to set up is here on this site so just keep reading. The START HERE page is the best option as you can see a list of everything I’ve written so far. x

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Sue

Hi,

I am looking into setting up as a virtual PA, with legal as my speciality. However, I am unsure as to (a) what equipment would be essential; (b) what equipment would be a luxury; and (c) what clients would expect i.e. should I have a separate land line at my home dedicated to my business or should I simply use my mobile phone/Skype?

Any suggestions would be gratefully received.

Reply
Joanne Munro

Hi Sue, you’ll find the answers in my guide on what tools you need (and don’t need) to set up a VA business which you can access by signing up to my newsletter in the sidebar on the right. I say no to a separate land line otherwise you’re not going to be very virtual! I just use my mobile. You can have a Skype line if you want to though – I sometimes get one when I go abroad. Having legal services as your speciality os a fantastic niche and you will do well. As long as you can do the work, invoice and get paid, the rest just sorts itself out and isn’t that important. x

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Trisha

Excellent article. I’m an executive assistant with 30+ years experience. I have been considering the VA profession for a couple of years but trying to determine what and how to charge has been my biggest hold back. I’m set up and ready to go but not sure how to get started finding clients and then what to charge.

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Joanne Munro

Hi Trisha, I’m really pleased you’ve decided to become a VA; it’s a great line of work. Everything you need to answer those questions is on this site. The blog posts 23 ways to market your business and the 3 best ways to find your first client will help you. My guide on how to get new clients also shows you the only method I use to get mine. x

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Ali Harriman

I’m registered with Timeetc and while its a great place to start as a v.a., it doesn’t take long to appreciate that the hourly method of remuneration isn’t ideal. I recently branched out to taking private clients, with medical as my speciality, and am considering structuring a retainer package to offer potential clients. Great article as always Jo!

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Joanne Munro

You’re welcome Ali! I love that there’s so many different niche’s for VAs and that medical is working out for you. People should always look at doing what they know. Retainers or project-based pricing is always good, I got some great ideas on how to add value and charge more from a book called The Wealthy Freelancer as well. x

Reply

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