I see it all the time… VAs barely making enough money and ultimately deciding to throw in the towel because it’s not worth it. Sure, the business is fun, the hours are flexible, but when it comes to making ‘real’ money, they haven’t seemed to crack the code on that part. And what do I mean by ‘real’ money? Well, it depends on who you ask because we all have different ‘why’s’. I love my business because it affords me the opportunity to do all the things I want to do, like attending every single one of my son’s marching band competitions without having to ask a boss for time off, or traveling to fun and exotic places with the family (Rome in 2011 and Kenya in 2012). But let’s face it, I can’t travel, donate money, or have my nice car without making money. It’s either run a successful business or go back to a JOB. yuck.
So let’s dive right in and figure out how we can make YOU more money.
Mistake #1: Estimating too many billable hours
Most VAs promote the fact that the “client only pays for time worked” which is great. But I believe that VAs overestimate the number of hours they are actually going to WORK which can be billed to their clients.
For example, if you work 40 hours per week, you may bill 20 of those hours. This may be because you don’t have enough work from clients or you’ll be doing tasks that aren’t billable: record keeping, answering short emails, installing software, calling your mom, researching new technology, talking with prospects, answering RFPs, participating in forums, creating products… The list is long.
So make sure to keep that in mind when coming up with your business model and factor in non-billable time.
Mistake #2: Underestimating your value
Here is something else I see often. If you start off your business with low rates and are providing a very valuable service, it’s not like clients are going to give you more money out of the goodness of their hearts. Do your research to see what the market will bear for the services you provide. DO NOT base your rates on your expenses or geographic location. DO base your rates on the value you are providing to your clients.
Mistake #3: Putting yourself on the sale rack
So you’ve stopped underestimating your value and know what you are worth. But then you act like a deer in the headlights when a prospective client starts asking about your rates. This is pretty common to be uncomfortable to state your rates. If this is you, and I used to do it as well, it’s so easy to tell the client what he or she wants to hear which may be a lower price than you wanted to charge.
Please stop doing that.
Instead, post your rates on your website so that when it comes to the topic of rates, you can refer him or her to your web page. You can also send a questionnaire before the phone interview which will give you a better picture of what they are looking for and won’t catch you off-guard. And then practice, practice, practice stating your rates.
Mistake #4: Chasing too many squirrels at the same time
Have you ever tried to chase two squirrels at the same time and tried to catch them? (Not that I make it a habit of going in my backyard and chasing squirrels, but I see my dogs try and it’s impossible and funny.) But it’s like that in business. You should focus on one core market, business model, or marketing strategy at a time.
I once had a client who wanted to start a multi-VA business and a consulting business at the same time. She had lots of ideas but got so overwhelmed that nothing got done. I told her to focus on just one business model for now and really zero in on WHO she would serve. Everything became a lot easier and she began attracting clients because she was focused. Years later, she started the second business but only after she was a success with the first one.
It’s easy to get caught up in the “I need to start this business, write that book, create those products, produce a membership site…” As my friend Carrie Wilkerson says, “it leads to a path of distraction.” And the more distracted you are, well, it follows that your business will suffer.
Mistake #5: Not providing enough options
Most clients don’t know what they don’t know and LOVE to be given ideas. If you submit articles as a monthly service, how about adding an upsell package that takes those articles and creating an e-book or producing tweets, blog updates, and Facebook posts? I have a client who added 4 hours per month to our package when I pointed out that her most active customers and clients came from LinkedIn but we weren’t actively promoting anything there. Yes, it takes time to draft some copy and send promotions to 50 groups on LinkedIn, but the return on investment was worth it. She pays me $300 more per month but averages $2500 more in sales. It’s all about the bottom line and the client really appreciates the extra $2200 in revenue 🙂
It may be obvious to you and me, but it’s easy to get caught up in the day to day and assume the clients know everything. But don’t hesitate to let the client know how he or she can make more money because ultimately it will increase your bottom line as well.
So there’s 5 reasons why I think VAs aren’t making more money. Many of us make these mistakes and course correct as we learn valuable lessons about what to charge, how to charge, how to pick ideal clients, and so on. Remember, no one says your rates are set in stone and you can increase your rates at any time. (If you need a “rate increase” example, check out my forms collection at http://virtualassistantforms.com/forms)
Tell me what you think – are you underestimating, undercharging, or not focused enough? What is stopping you from increasing your rates? Love me some comments!