Virtual Moxie - The Cure For The Common Virtual Assistance Practice

When should a client consider hiring vs working with a Virtual Assistant?

There’s a point (there are actually probably several, but I want to address just one today) at which a client’s need doesn’t fit well with the Virtual Assistant model. That’s when the client’s need for administrative help becomes so great that he really should, for financial and/or legal reasons, hire an employee.

Where’s that line? It’s going to be different for different people. But I’ll say that, in my view, any client with a Virtual Assistant whose fee is $50+ per hour, and who is consistently needing more than 10 hours/week is probably financially better off hiring an employee (even a virtual one). And at the point that he reaches or surpasses 20 hours/week, he’s probably legally better off as well.

The financial argument is simple. Number of hours X cost of hours will always tell the tale in terms of how smart using a model is. And in most places, it wouldn't it be as costly to have an employee as it would cost to pay a Virtual Assistant.

To quote myself, "Virtual Assistance was never created to be the inexpensive alternative to hiring employees, but the convenient, efficient and cost effective one." I've said that so often, I can say it in my sleep. And it's 100% true. And, like any other "convenience" model (think 7-11), there's a premium paid for it. 

Is it convenient? You bet--there's a lot of ease involved with this model. Is it efficient? Absolutely. Is it cost effective? Only up to a point. And the savvy business person has to seriously define for himself where ease/convenience becomes foolhardiness. That’s where the rubber has to meet the road.

I also understand that many people want to disregard tax law as “law.” But it is law, and breaking it can have serious consequences. Having the IRS determine that someone paid as a contractor is actually an employee has the possibility of crippling a business. So the less that the client/VA relationship looks like employment, the better. I’m betting that retaining the services of a Virtual Assistant beyond what the “work” world knows to be “regular part time” hours might make it look too much like employment.

I know I don’t want to test that theory. And I’m betting most of the client population wouldn’t, either.

Now, we could argue that a client would rarely need ONE Virtual Assistant for all that time, and that it might be smart to suggest to him that he build a team. I absolutely support that suggestion. It moves things back into the convenient, efficient, and cost-effective space, because there's no way to ever get a whole team's talent in one employee, so it removes both the financial and legal challenges in one fell swoop.

But I've talked with more than my share of clients recently who want ONE person for GOBS of hours. GOBS, I tell you. So they do exist, and there's a likelihood that if you haven't run into one of them, you will.

Is it your job, as a Virtual Assistant, to tell a client how to structure his business to get his support needs met, how to spend his money, or how to protect himself legally? Possibly not. But it’s smart to have the conversation as it’s merited, just in the same way you’d have a conversation about the best ways for a client to achieve any other goal he may have.

At the end of the day, a client has the right and responsibility to make his own decisions. And overpaying for his admin needs, or running the risk of having his practices scrutinized by the Feds are choices he needs to make—or walk away from.

But you show yourself as a consummate professional when you’re willing to have the conversation, even as you know that it might mean that he’ll make a different decision that could lead him away from your practice.

Bit O’Moxie: Standing for the client is always a fabulous idea. Remember, when you stand for the client, you ultimately stand for yourself and your practice, too.

Which comes first, the chicken or the egg?

It’s an age-old question that really usually has no answer. In most places in life, there’s no clarity about it—because if the egg didn’t come first, the chicken wouldn’t have happened, but if the chicken hadn’t come first, the egg couldn’t have been laid.

Blahblahblah...you can drive yourself batty thinking about stuff like that.

In your Virtual Assistance practice, I know of no other place that chicken/egg thing shows up more than in the discussion VAs have with themselves (and the stories they tell themselves and listen to from some industry leaders trying to sell them the latest and greatest success pill) around what needs to come first—clients or hard skills.

It’s not that you can’t get clients without first building your skill set---you can, by knowing how to handle the gaps between what you currently can’t do and what the clients need. It’s also not that you can’t get skills without having clients, first—you can, by focusing on learning things that help you make more of your strengths.

To believe anything else is to clutter your brain with lies.

But there’s one place that’s really not talked about in the same light. Instead, it gets talked about rarely at all (except by me, evidentally!), when, in reality, it needs to come before either clients or new skills.

That’s in building a strong foundation under your business.

I’ve written about this before, and it really is worth repeating. It’s foolhardy at best, and grossly negligent at worst to start a business on a wing and prayer.

The foundation should absolutely come first. And not a foundation created by looking around the net, seeing what others do, and making it up for yourself. That’s not a solid foundation. That’s a wobbly floor.

You’d never let a builder put up the walls on your house before laying the foundation. And why? Well, because there’s an order to things, and because to do that would mean that the foundation, laid later, if at all, wouldn’t be especially solid. Slipping it in under the walls would really be backwards.

So why would you go into business without having a proper foundation?

Listen… I train around foundation. If there’s anything in the world I know it’s this. Why God chose to make me brilliant in this, I’ll never know, but that’s the gift I have. And I look at VAs, many of whom believe themselves to be successful, but who come to me and within my asking one question, let me know that they don’t have a solid foundation.

Let me pose said question to you.

How did you set your fee?

What I mean, specifically, is that your fee is $X. How did you arrive at that number?

If you say anything like, “I joined a group and saw what other people are charging,” or, “My best friend Sally and I kicked it around and thought it sounded good,” or, “A VA coach told me that’s what I should be charging,” or, “I used a calculator on xyz.com web site and it suggested I charge this,” then I guarantee you are walking on one really wobbly floor. Your walls may be really nicely decorated, but your floor? It’s scary.

Here’s the reality of things. I’d bet that the majority of VAs are not profitable in their businesses. It’s not that they don’t want to be. But they don’t know how to know if they are or if they aren’t, so they wing it. Looking at the gross income, they may think they’re doing really well. But after taxes, expenses, and the like… well, let me say that I heard about someone today who was KEEPING less than $5/hour of what she was billing.

She’s better off with a job at McDonalds.

And the money piece of things is just one piece of the puzzle.

With the skills you brought with you to your business, you can be a great technician. But the technician should not be running the business—the business owner should. And if you know next to nothing about being a business owner, running the business as a technician will, ultimately, do nothing more than keep you running on that gerbil wheel you probably find yourself on.

Want to get ahead? Just stop. Stop chasing the clients. Stop chasing the skills. Stop chasing the work. Take the time to get help with laying your foundation, and then move forward again. To keep doing what you’re doing and expecting to see different results—well, that’s the definition of insanity.

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.

Turning a client around

I got a terrific letter from a VA in Canada who is deeply niched, has high standards, and who happens to work with many clients in the US. Some of them, she says, absolutely know they need her, yet aren’t thrilled about paying her fee, which, while not at all outrageous at $75/hour, seems to give them some pause.

Her question to me was how to, in a moxie-filled fashion, address that pause in a way that would turn them around.

I have a moxie-filled answer, but not the one you asked for.

Bit O’Moxie: Last week I wrote about resigning as mother of the universe, and on focusing on ease by paddling downstream more than upstream.

Trying to turn a client around about your fee is folly. It’s absolutely paddling upstream. Wanting to turn a client is a cross between mothering, and wanting the client to get your value (or like you, possibly)—but if you do a good job of expressing your value to begin with (as I assume you do given the state of your practice), then to want to do more is pure overkill, in my view.

Listen--clients either absolutely get your value, and immediately say yes to working with you, or they don’t get it, and they hem and haw about something, and very often it will be your fee—‘cause it’s flat out easy to focus on.

It’s not about your fee. Truly. It’s not about you at all. And that’s really why it’s probably wise to simply remove yourself from the conversations and let them go find someone who fits more into their comfort zones—monetary or otherwise.

But let’s pretend for a second that it is about your fee. So what? It's ok to have fees not everyone can afford. After all, you can't afford to work with everyone, either, you know? You have to be choosy about who you work with, and having clients self-select out based on anything that isn’t a fit for them is gooooooood. It simply leaves space in your practice for more fabulous clients who want to work with you and know it’s the right thing for them to do.

So, please, stop worrying about the economy here in the US, or people who walk away, seemingly due to your fee or anything else. Focus on your work. Focus on yourself. Focus on helping and delighting your current clients. The rest—all of it—will take care of itself.

Help MORE people by not compromising your fees

I’ve had occasion to read, recently, a concept I find intriguing. To be honest, I find it intriguing more in the way a human would be intrigued when seeing an alien for the first time, than anything else.

It’s the concept of pricing one’s services based on what clients who need help can pay. And it seems to come from a very real and genuine place—a desire to be of service and to really help the people who need help.

Where my head tilt comes in is that I don’t see how those who set their fees appropriately and don’t change them for anyone—regardless of circumstance--aren’t being of equal service and don’t equally help the people who need help.

I mean, the grocery store doesn’t change the price of eggs based on what each person who wants eggs can pay. Eggs cost what eggs cost, and, while perhaps sorry if someone can’t afford the eggs, the price is the price.

And you know, funny that…because even in this down economy that everyone talks about, eggs still cost whatever eggs cost. And your services should, too.

Bit O’Moxie: In the same way that you can’t have everything—because you’d have no place to put it all, you can’t work with everyone—because you’d kill yourself trying. Therefore, don’t lower your fees, don’t pay a lick of attention to what’s going on in this world, continue to do what you do, and charge your appropriately set fees for it—and not a lick less.

In doing so, you actually help MORE people. You make a difference for those you help, and shine a light for all those who think they need to do more for less, or who would ask you to do more for less. By showing them that you are successful without compromising you show them that they can do it, too. And honestly--a hand up is usually far better than a hand out.

And for those who need help and can’t afford it from you? Trust that someone, somewhere, will give them what they need, think good thoughts for them, and send them on their way. You can’t possibly help everyone, nor should you try.

VAs are NOT cheaper than employees

As you mosey about the Net, you’ll see charts posted (perhaps you even have one on your own site) that show how working with a VA is less expensive than hiring an employee.

I have a fundamental issue with these kinds of charts. They’re not presenting an accurate picture. And what got me to write today is that I saw a tweet where a VA was explaining to a client that it’s a good deal to work with VAs because, in part, the client wouldn’t have to pay for benefits. A URL was then given to the VAnetworking comparison chart.

As for what the tweet said? It’s bunk. Clients absolutely DO pay for the Vas' benefits.

And chart makers really are coming from the right place--but what's being taken away from the charts is fundamentally incorrect.

So let’s take a look at all of this stuff. And let’s use the VAnetworking chart as an example. Here’s what it shows:

Now here’s my view on this, item by item:

Hourly Rate of Pay

Employee = $20 (btw, based on the US Dpt of Labor, an admin/office manager at the top of her pay grade would be making more like $22.89/hour
VA = $30-$100+

The VA’s hourly rate is what it is because she should have all the skills of the employed admin, plus, she has additional responsibilities (due to working virtually) that employed admins don’t have to have.

Fringe Benefits

Employee = $7 @35%
VA = Whatever it actually costs the VA to replace the sorts of benefits she would have had in the corporate world. Those costs are likely to be higher than 35% of her base hourly rate, because corporations have greater buying power for some of those benefits than do solopreneurs. No one client absorbs all the expense, but each pays part of it.

Overhead Rate

Employee = $10 @50%
VA = Based on actual cost, again—although significantly lower than in the employment scenario. It’s true that clients don’t have to have physical space, or pay various taxes/insurances, but there are other expenses clients DO have when working with VAs. There are times when clients may purchase equipment for their VAs to use because it’s specific only to them, and a VA would have no reason to have it, otherwise. Clients also routinely reimburse VAs for costs of postage, phone expenses, education, travel—all sorts of things.

Certifications/Experience (not included on the chart, but begs to be considered!)

Employee = An employee at the top of her pay grade can get all the certifications and special knowledge she wants, but hitting that ceiling is hitting that ceiling. She’s not going to “cost” her employer more in hourly expense beyond a certain point.
VA = Every new certification, every new skill mastered, even niching at a high level and gaining expertise in the needs of a specific group makes the VA more valuable. As a business owner, she has no ceiling on her fee, and appropriately raised, it’s absolutely passed on to the client.

At the end of the day, no matter what, an administrative employee is likely to be maxed out in cost to an employer at something under $50/hour.

So, to a certain financial point, VAs aren’t more “expensive” than employees—but that’s quickly moved beyond as a VA grows. Look at the VA Networking chart. In reality, how many of your VA colleagues do you know who are billing at just $35/hour? That’s barely profitable. And if you swap out the figure for a $50/hour (or more) VA, the figures on the chart are blown to hell. Actually, the value of that chart is blown all to hell if the VA’s fee just exceeds $37/hour.

On the flip side, what clients get from VAs is exponentially greater than what they could get from employees—in terms of abilities, attitude, mindset, and commitment. And they get the added benefit of far less hassle—especially physical, and legal. They also may get to save by paying just for the time they need, but that’s solely dependent on how much time they need.

The more time they need, and the more they need from a top-notch, experienced VA, the more it costs. And at some point, comparing just dollar for dollar, it’s kind of easy to make the mental connection to being able to get more time from an employee for the money. But that still doesn’t address the added abilities the client gets from a top-notch VA that exceed what he’ll ever get from an employee with skills gained through employment.

And the reality? Very few clients using VAs will ever really need to so much time that hiring employees is a better option.

By way of example, sure, if you have a $37(complete compensation package/overhead cost) employee working 40 hours/week, that’s almost $77K/year. A $50/hour (complete) VA would cost $102K for the same amount of hours worked. But it’s the rare client who needs that much help. The very rare client. It’s far more likely that the client, with a high need, would buy something like 50 hours/month. And that would cost just $30K/year. The more “usual” client AssistU VAs see who need 10-20 hours/month would be paying $6K-$12K.

If a client needs 10-20 hours/month to accomplish what he needs done, then paying an employee is absolute overkill. In fact, it then becomes far more wasteful than working with a VA at a higher hourly rate.

I’ll say it again for the umpteenth time: Virtual Assistance was never intended to be the inexpensive alternative to hiring employees. It was intended to be the efficient, effective, and convenient one. (Do feel free to quote me, please!) And it is exactly that. But that comes at a higher price, as most conveniences do. It also comes with greater benefits.

VAs need to stop trying to make a case for being “cheaper” than employees—we just aren’t. It’s not a place where we need to compete. It’s stupid in the extreme, especially since it’s not true. Where we make sense is not in the dollar-to-dollar comparison, but in the effective/efficient/convenient—and even the GREEN comparison. Overall, for most clients, working with VAs is absolutely going to result in a cost savings over hiring employees.

Virtual Assistance best serves unconventional thinkers. If clients can’t wrap their heads around the reality that VAs present a unique opportunity for them to get the high-level administrative support any business owner/person needs to move forward strongly, and/or don’t want to pay for the convenience, they should absolutely feel comfortable going the employment route. And you should feel equally comfortable helping them see that path clearly and quickly.

Are you impoverishing your business?

Today is Blog Action Day, when bloggers everywhere are writing about poverty. I’m proud and happy to lend my voice to the conversation, and to do that well, I first want to talk about what poverty is, so you’ll get where I’m coming from.

I suspect that when most people think about poverty, they think about people who lack the fundamental necessities of life. Whether money, housing, food, etc., the lack thereof makes a person poor, or impoverished. Often overlooked is that something or someone can also be impoverished of strength, vitality, and spirit.

While people can often not do anything (or can’t see that they can do anything) to change their circumstances with regard to money, housing, food, clothes—necessities of life, what I find sadder still are those who impoverish themselves by their actions and/or sometimes inactions--those who sacrifice that which could have flourished to fear, or often, ignorance.

Within the Virtual Assistance community, I work every day to teach, train, and coach Virtual Assistants to step fully into their own glory and power, and to understand that self-sacrifice, and self-impoverishment serves no one--not themselves, not their clients, not their professional communities, not the global community--no one.

Today, a quick and simple lesson for a time in our history when there has been ignited a great deal of fear which I’m starting to see reflected in our professional community. It’s a lesson that may scare some, and may lead them to impoverish their businesses more than they do now because of that fear. But it’s a lesson that is designed to be powerFULL, and to reaffirm the personal and professional power each VA has inherent in his/her own business: the power to be profitable and to take care of him/herself even today—in spite of today.

I want all VAs to have fees that are set appropriately so that none of them suffer, or are impoverishing their businesses.

I happened to see a tweet the other day that led me to a blog post I found interesting. Although the writer isn’t a VA, she’s written a far better article than most other non-VAs write.

And it led me to want to add something to what was shared.

It says: “One thing a veteran virtual assistant will tell you is that pay rate depends on credentials and training.”

Actually, training/credentials are just two parts of it. Your fee is actually based (or should be) on a mathematical calculation, where there’s very little guess work involved.

I find that many VAs who come to me for coaching of one sort or another have no idea what their fees need to be in order for them to be profitable. And when I have them figure it out, they are often astounded to find that, as a practical matter, they’ve set their fees far lower than is practicable.

Be smart. Don’t assume that your fees are set appropriately. It’s folly to do that. And if your fee is set under $30, I can just about guarantee that, unless you live in a hut on a mountain in West Virginia, your business is not profitable.

Here’s the calculation and how to use it:

You must first arrive at a base hourly wage. This is a cost for time only. It shouldn’t take into consideration any expense.

The Bureau of Labor Statistics lists the median hourly rates for US workers (shown below). You can see this table yourself, if you've a mind to. The most current information is more than a year old, but I suspect it hasn’t changed much, if at all. If you think it’s changed, pad it the way you see most fit to.

Secretaries: $14.04/hour
Administrative Assistants, and Executive Assistants: $19.57
Office and Administrative Worker Managers: $22.89

For the purposes of figuring out your fee, you’d want to pick whichever hourly rate is most appropriately tied to the work you currently do for clients. If you’re doing very task-based work, you’d choose the rate for Secretaries. If you do some of that, but there’s a degree of strategy and responsibility involved, choose the Admin/EA rate. And if you are managing a client, or a client’s business, or overseeing the work that others do for your client (plus all the other stuff!), choose the rate for the Office Manager. This is, btw, the amount you are going to pay yourself at the end of the day.

Next, you have to account for all of your indirect expenses. An indirect expense is any expense that’s not tied to an account. So, it’s your office supplies, furniture, rent, utilities, business insurance, trade association memberships, continuing education, etc. Smart business owners know that they absolutely need to account for all of it, whether or not they actually need it. Absolutely include all your indirect expenses and anything that might not technically fall into usual indirect expense, but that you want to be sure your fees cover.

Things that VAs often don’t consider are some of the benes they’d have if employed, such as:

Vacation, sick, holiday and personal time
I suggest you plan on taking at least three weeks (week = 5 days) of vacation, one week of sick time, one week of personal time, and the major federal/national holidays in your country. In the US, that would end up being a total of 33 days, or 7 (rounded) weeks. If you are of a particular religious group and have other days that you need to take away from your business, be sure to add those in, too.
Health insurance
Many VAs have insurance coverage via a spouse’s employer so they don’t factor this cost in. But in reality, if that coverage went away tomorrow, you’d want your business to pay for your health insurance premiums (yours, not your family’s). So get a quote for yourself, and factor that in to your indirect expenses
Retirement account
If you were employed, some percentage of the contribution to your retirement account would be made by your employer. Pick a percentage, and add that in to your calculation.

Then you need to figure out how many billable hours there are in your work week. Use that to figure out how many billable hours there are in your work year (be sure to take into consideration the time off you calculated... your work year will not be 52 weeks long!)

Once you have those figures, you have what you need to work this formula:

1. Billable hours/week X 45 weeks/year (or however many weeks you plan to work) = billable hours/year
2. Annual indirect costs divided by billable hours/year = hourly costs
3. Hourly costs + hourly pay + 10%-30% profit = hourly rate

The calculation doesn’t include an amount to include for special training or certification you earn—and unfortunately, I’ve never seen anything in any professional group that says, definitively, how you price/value those kinds of things, so that’s really going to be a guess (but I would suggest that $1/hour per higher skill, and $3/hour for a certification isn’t too much to ask, and may, in fact, be too little!).

So, let’s say Suzie’s working this formula, and she’s an AssistU-trained VA with three years experience FT in her business. She plans to work 45 weeks/year, and do 25 billable hours each week. She does high-end client work, plus was an EA in the corporate world for 15 years, so she’s claiming $23/hour as her hourly rate. Her indirect expenses are $35K/year, and she wants a 20% profit. She’s been through the Authorsmart program to help her with her niche working with best-selling authors, and she’s an AssistU Certified Professional Virtual Assistant. This year, she’s attended/ing two high-end multi-day seminars by esteemed teachers, so she figures the increase in her skills will be worth $15 more per hour.

25 X 45 = 1125 billable hours/year

$35K/1125 = $32 (rounded) hourly costs

$32 + $23 + $15 + 20% = $84/hour = the fee Suzie needs to charge her clients to be profitable in her business. To break that down a bit more…

$32 pays her expenses (including time off, insurance, and a portion of her retirement savings)
$38 goes in her own pocket, free and clear
$14 is profit for the business

By setting her fees this way, Suzie now is well compensated for her time, she covers all her expenses—including paid leave and a contribution to her retirement account, and her business is profitable. Is she rich? Nope. But she's free. She's at choice the way no one living in poverty can be. She works exactly as much as she wants, when she wants, and how she wants. She's taking care of herself. She's large and in charge and in command of her own world, and she'll never again be dependent on anyone--a BIG piece of what happens with poverty causing lack of necessities. And her income can be adjusted at any time by raising her fee, or the hours she works.

It's
All
Up
To
Suzie

...or you, as the case may be. And that, my friends, is a richness that even money can't buy. Yay!

Now, off you go. And when you’ve figured out what your fee needs to be, leave me a comment and let me know what it turned out to be, and how close (or far!) you currently are from it, and how it makes you feel to know what your fees need to be for you to have a strong, healthy, vibrant business!

Gimmicks? We don't need no stinkin' gimmicks!

Every time I turn around, I’m amazed at what I see people doing in the name of drumming up business. This past week, I’ve seen everything from service plans (“For $X, we’ll do A, B, and C for you, and for $XX, we’ll do E, T, and X for you, and for $XXX, we’ll do A, B, C, E, T, AND X for you!”), to offering to let multiple clients share one retainer.

And I’m amazed, not because I think innovation is bad or wrong—if I did, AssistU and much of what’s considered standard in the Virtual Assistance profession (PAYG, and retainer, long-term collaborative relationships with clients, partnering...they list goes on a while) wouldn’t exist today the way that it does.

No; I’m amazed because my sense is that if VAs weren’t struggling, I doubt they’d be coming up with such complex, and truly, sometimes silly ideas (and I do, for the record, think that packages, and shared retainers are flat out silly—if you care to know why, feel free to email me (stacy at virtual moxie dot com) and ask!).

What this constantly brings me back to is that many VAs simply don’t have strong foundations under them, nor do they have clear direction for the path they’re following. They put out to the world that they have it all together; their businesses are going well and they’re happy, when, I suspect that, inside, they know none of that is true.

If it were true, they’d have a very solid standard around their service offerings. They wouldn’t need to create packages, and they sure wouldn’t need to have multiple clients share one retainer.

So how *does* someone get from wherever she is to having a solid foundation that will allow her to grow a solid business where she doesn’t have to create gimmicks in order to get business?

It would be really easy for me to say “standards.” That’s what I’m all about, after all. And in truth, if I said it, I’d be correct.

But there’s more to it than standards. It’s a mindset. There’s a mindset that calls a person to do whatever it takes, and another that calls a person to know what’s right and appropriate for her, and to never settle for less—no matter what. The first is driven by fear. The second, by self-love and being abundance minded.

Bit O’Moxie: If fear drives you, you will never have the business you want. N-E-V-E-R. Figure out what the fears are, root them out (a great coach can often help with this, although sometimes a mental health professional might be a better help, depending on the situation), and put them out of your life. Only then can you build a business where your light can fully shine, where you can create strong and truly value-based product/service offerings, and where you’ll attract to your practice the high-quality clients that will allow you to never again have to turn to gimmicks to make money again.

If you don’t want to be perceived as a commodity, don’t set your fees as if you can be bought in bulk

I’ve seen some Virtual Assistants who have a particular standard that simply doesn’t serve them. I feel certain they don’t know that, or they wouldn’t do it.

The standard is to have a multi-tiered retainer program. Some couch it simply as “options.” Others couch it in “jewels” (sapphire, ruby, diamond). Others still couch it in precious metals (bronze, silver, gold, platinum). Ultimately, the richer the level (platinum is “richer” than gold, for instance), the more hours are included in the retainer, for less money per hour.

This is what I call the Costco pricing model. If you buy more of something, it costs you less than if you buy less of it. It’s commodity-based thinking, and the sole reason why places like Costco exist is because it works…for some things.

It works, for instance, for cans of corn. It does not work for services. I mean, it does work for services…if you want money to be the biggest factor that your clients consider. It does work for services…if you work in a call center in Bangalore. It does not work in an industry that tells clients that fit is the top criterion for choosing a VA.

If your fee is appropriately set, then THAT is your fee. And whether someone puts you on retainer for ten, 20, even 60 hours/month, your hourly rate needs to remain the same.

Someone asked me why it matters. Well, first of all, it matters because of what I just shared. But it also matters because in structuring your fees that way, you set yourself up to end up being haggled where you don’t want to be, and where you shouldn’t be.

For instance—let’s say that you have a $500 retainer that includes ten hours of your time, and a $675 retainer that includes 15 hours of your time. So that you don’t have to do the math, that makes the first retainer fee $50/hour, and the second $45/hour. So, your client Jack is on the $675 retainer. And one day Jack calls and says, “My business just skyrocketed. What’s the lowest fee you can give me if I want 25 hours/month?”

You think about it, and logically, based on your pricing model, it should be $875 (which would be $35/hour). But now you’re stuck, because you know you can’t afford to work for that. So you tell Jack that $45/hour is as low as you can go, and a 25 hour retainer would be $1125. Jack says, “How is that fair? You gave a discount when I went from ten hours to 15. How can there not be any other discount when I want to buy more of your time?”

Now, you certainly can say that that’s just the way it is. That’s your right. But Jack already sees you as a commodity—because that’s how you set yourself up in his eyes—and he is not going to understand. He may take his business elsewhere (probably a good idea, anyway, really!), or he may begrudgingly agree to your terms.

But why set things up in the beginning that could possibly cause you problems down the road? What’s the point of that, exactly?

Bit O’Moxie: There is no point. That’s the truth. Discounting your fees does nothing for you, and the only thing it does for the client is make him think of you in dollars and cents.

Set your fees appropriately. This means doing the hard work to figure out what they should be, and having them be exactly that. Then decide on retainer. Pick one. Just one. Make it ten hours, or 20, or 25—whatever you want it to be. And have that be the starting place for each client. Increase the retainer, at the same hourly rate, every quarter or so, based on the number of hours the client actually uses.

For instance, if you have a ten hour retainer ($500), and after three months, Jack is routinely using 16, move him to a retainer of $750 to include 15 hours (be round about it…an hour or two/month in overages won’t kill you). If Jack is using 19, move him to a retainer of  $1000 to include 20 hours (he’ll use the extra for sure!). Adjust it every quarter to make it appropriate for him (and to allow you an appropriate picture of how much work you've committed to), but never ever go below your minimum—whatever that is (in our example, 10 hours). And never offer a discount on your fee!

Let this be your mantra this week: What I offer has a value distinct from all others because I am distinct from all others. I am not a commodity!

Never try to convince anyone...

Recently, I've gotten a lot of questions about how to "convince" clients of things. Questions like:

"How do I convince a client to work with me?" Or, "How do I convince a client that I'm a better fit than an off-shored VA?"

Bit O’Moxie: You don't. You have no reason to. Either clients get it, or they don't. Either they want to work with you, or they don't. Have pride in who you are, what you do, and what you can handle for clients. Let your life speak for you. There's really nothing else that's needed, and nothing else that really works.

Extra Bit O’Moxie: Need some great language to use for questions like, "Why would I want to work with you?" Or, "Why do I want to work with you when I can hire a VA in Bangalore for $4/hour?" Here it is:

"You may not." (Pause for effect)

"However, if you want someone who will genuinely care about your business, actively work for your success, and who has the mad skills and resources to help you take your business to the next level, I very well may be the person you need to be working with. Tell me...what do you think about that?"

Either the prospect will get it, and make appropriate murmuring noises as he considers what you've said, or he'll not get it, and his answer will let you know that. Let his response guide your next action. Stand tall in who you are, and never forget the value you know you create for clients.

Never try to teach a pig to sing.
It wastes your time, and annoys the pig.