“That’s AMAZING!….That is so much more than I make at my 9-5 job”
This is the point where I gently had to remind her – as a business owner, I have to cover expenses that an employee doesn’t have. This one piece of information is super-duper important when determining your own rates – so I decided to give it a blog post as a ‘friendly reminder’ when thinking about how to charge your clients.
Many Virtual Assistants choose a rate that ‘sounds pretty good’ and completely forget about the fact that they need to cover certain costs associated with working independently from home. When you are setting your rates – remember that the following expenses will now be YOUR responsibility:
- Consultation times with new Clients. You will not be getting paid to speak to new prospects so this needs to be factored into your billable rate.
- Sick Days and Vacation Days. You will probably want to take some time off this year…and (knock wood) you might even have an unexpected illness when you will be unable to work. Note that you will not be getting paid in either instance.
- Cost of training and learning new skills. You 100% most definitely need to keep on the ball by learning new skills and improving the ones you have. Training will now come out of your own pocket too!
- Invoicing, Filing, Bookkeeping – ugh. There are a lot of hours you will be ‘working’ for your own business and not able to bill those hours.
- Equipment and Supplies. Everything from that gorgeous new iphone to the pen you write with has to be paid for by you.
- Time spent marketing your own business. You don’t get paid for writing your blog, updating your facebook status or engaging people on Twitter.
- Medical Expenses. Working for yourself means no paid benefits. Your kids braces and that new pair of eye-glasses are now out-of-pocket expenses.
- Costs to run your office. Whether you’re renting a space somewhere or working from home, you will have to pay for small luxuries like ‘lights’ ‘heat’ ‘electricity’ etc. Yup – utility bills are now expenses too.
Once you factor in all of the costs to running your own business it’s easy to see why raising your rates might be a good idea. Want to try a really cool calculator to see if you are making a profit or breaking even? Freelance Switch has a handy cost calculator for entrepreneurs that just might help you figure out if your rates are where they need to be! You can check it out here.
You just might be surprised by the results.