Tell the truth about who pays for your benefits

I’m home from FoVA, but not really ready to write about the experience (all good, though—I promise!). Next week, I’ll be much more ready. :)

Today, I’m all about dispelling a myth that is widely put forth in our world. It’s often expressed like this:

An employee will cost you 2-2.5x her hourly rate of pay because you pay for things like benefits, sick/vacation/personal time off, health insurance. You don’t pay a VA’s benefits so it’s less expensive to work with a VA!

I tried to dispel that myth in another post, but I think my specific message about this got overrun by what I was saying about something else. And I’m now seeing the myth so often that I thought I’d take yet another end run around it and see if I can make it clearer.

If your fees are set appropriately (read this post about how to set your VA fees), then part of what’s covered are your indirect expenses, which include the benefits you have to provide for yourself. As a result, every client absolutely DOES pay a portion of those expenses for you. He doesn’t pay the full amount of benefits you get, as he would likely if he were your employer, but he does pay. So it’s inaccurate (a lie, actually) to try to spin it to look as if he doesn’t.

So stop it, will ya? ;)

Virtual Assistance was never designed to be the low-cost alternative to hiring employees. And this conversation doesn't even take into considering ROI as it pertains to costs.

Bit O’Moxie: So, it’s far better to tell clients the truth about what your fee includes (if asked!), than to spin it so that he has an unrealistic view of it.

In reality, a VA’s hourly rate is significantly higher than an employee’s (even including benefits and such). Where the cost effectiveness factor comes in for clients is in paying only for the amount of time he needs, and it’s 100% productive time.

A guarantee of 40 hours/week at $29.70 ($22/hour plus 35% for benes) is $1188, which is significantly more expensive than 15 hours/month at $55—where every second is productive.

Comments

[Charity Robinson]

I am a new VA still trying to get clients but I totally agree with what you are saying, Stacy. Being up front about what the client pays for goes back to honesty and integrity. Your clients need to see value in you and in what you do, so of course they should want to pay you appropriately.

BTW, I love your blog and read it regularly. I can't wait to read about FoVA next time. Keep the Moxie coming!

[Stacy Brice]

Thanks, Charity! Good luck with your new business--let me know how I can help!