Virtual Moxie - The Cure For The Common Virtual Assistance Practice

I'm Not a Bank: Dealing With Late-Paying Clients

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Molly wrote to pick my brain:

"I have a client I really enjoy working with. Unfortunately, she sometimes pays late. It’s getting to be more often, too. Whenever she has to pay late, it’s because either she didn’t bill her clients on time so her money didn’t arrive soon enough to use it to pay me, or her clients are late paying her and she doesn’t have it to pay me on time. Usually, it’s the second scenario.

In my agreement with her, I say that work will stop when an invoice is five days late.

She’s ok with stopping.

I feel like something’s wrong with this scenario, but I can’t put it into words, much less figure out how to talk with her about it.

Any light you can shed on this would be wonderful"

There are a couple of things going on that I can see. Maybe other readers will have other ideas—if you do, please be sure to share with us in comments!

1. You put the clause in your agreement about stopping work when invoices are late to protect yourself from being screwed. Smart, that. But what you didn’t think about was the client who wouldn’t mind stopping and picking up again when she’s able to pay. What you meant to do was create a disincentive. What your client sees is a way to keep her place in your practice even as she’s not honoring the agreement to pay you on time. She really shouldn’t be able to have both.

To shift this, consider changing your standard to include a consequence to stop this from happening. For instance, it might be that if you have to stop working for non-timely payment more than twice in a six-month period, you’ll stop working with the client all together.

You're not hard-hearted. Everyone can run into a snag. But....

2. You’re not a bank. Working but not being paid on time is tantamount to floating the client a loan. You can’t really afford to do that.

You want to work with clients who can easily afford your fee and who can reliably pay you each month. On time. Clients who are living as hand-to-mouth as your client seems to be can’t do that. And, in the general hierarchy of life, you will always be one of the last to be paid with whatever the available funds are. First will be her shelter, then food, then any services to keep life and work going that she can’t do without, and somewhere below that is you.  I do realize that problems flow from one person to the next, but they don't have to flow to you. It's your choice to not allow this on a regular basis.

To shift this, consider creating a standard that says that you only work with clients who can easily afford your fee. They exist--I know because I am one and I know plenty of others.

To discern who can and cannot pay you reliably, you’ll need to have a fairly direct conversation with anyone you interview. You might consider saying that you need to know that you’ll be paid on time, and want the client to understand that your being paid cannot depend on her being paid. Ask what kind of cushion the client has to maintain cash flow or deal with tight money situations that will prevent paying you late. Then only work with clients who answer the question to your satisfaction.

With regard to this client, you might just say the truth: “I really enjoy working with you, and I can’t afford to be paid late any more. My invoice needs to be paid whether or not your invoices are paid. What other arrangements can you make so that this doesn’t happen again?”

Then only continue to work with her if her answer is satisfactory to you. Otherwise, let her go and create room for someone new who can afford to work with you and will pay you on time.

Good luck, Molly!

Intake--Who Pays?

The time between when you send your client agreement/intake packet to a new client and the time you actually begin working with her is the "intake" period--the time you do the work to get things ready on your end to work with the client. 

This might be setting up files, or reading materials the client sends you to bring you up to speed, or setting up an online collaborative workspace, or any number of other things you might do in preparation for the actual work to begin.

Regardless, it should all be billable time. If you hadn't thought about it, I hope you will.

Those who think about it and bill for it often take that time off the first month's retainer. Unfortunately, I've heard from so many who don't tell the new client that the intake is billable, or that it will be taken from the retainer, and so there's often a fairly straight-from-the-gate disconnect for the client--at the very beginning of the relationship where one can least be afforded. That disconnect is an experiential one; rather than feeling like she's gotten a lot of work for her retainer hours, it feels like she's gotten less than she expected. And she did; she's actually gotten the retainer minus some number of intake hours.

So, if you want to bill for the intake, first tell the client that that's the case. And then as to how to bill for it, there are two (at least!) ways to consider doing it.

1. Take the time from the retainer as mentioned above
2. If you pretty much know how long it usually takes you to do the intake, charge a flat fee, upfront, to be paid with your initial retainer. 

Whatever way you choose to do it would also be explained to the client so she wouldn't be surprised.

Either way, you create an explicit agreement about the fact that paying for the intake is going to happen and how, and there can be no misunderstanding or disconnect for the client.

Do you do it another way? I'd love to hear about it. Just leave me a comment :)

"Affording" Time Away is All In the Numbers

One of my fondest desires is that Virtual Assistants be profitable in their businesses.

To be profitable means that the business pays you, pays expenses not passed through to clients for their own work, and has a little left over.

When I hear people talking about VAs “underearning” as a platform for telling them how to make MORE, my first thought is, “First you have to teach them to know if what they have NOW makes them profitable. From there, they can decide if they want MORE.” Not everyone does, you know. Some people really want enough.

Either way, making sure that your business is profitable is important.

And I’ve been sharing a formula that objectively tells you whether that’s happening or not, for nearly 15 years. I’ve posted about it on Moxie, most recently here.

What I’ve realized recently is that part of the way I’ve talked about it is unclear. And I say that because I’m realizing that many people who share the outcomes of their formulas do not do this piece—the piece about adding in time off as an indirect expense.

So I want to see if I can clarify.

Let me start by saying that some indirect expenses are easy to see, and therefore, to include when you're listing expenses. You get a phone bill. You have an internet access bill. You know how much that new printer cost.

But it’s the cost of the things that you can’t see—or, maybe better—that you don’t see all the time, that seem to get people all ajumble. Things like time off. Or making a contribution to a retirement account.

When you were an employee, back in the day when such things were provided, you had paid time off, and possibly a match of funds into your retirement account. Now you have to be thinking about replacing those “benefits” on your own dime. And the reason so many VAs say things like, “I can’t afford a vacation,” or “I can’t afford insurance,” or “I can’t afford continuing education” is because they didn’t add it in as an indirect expense which is then covered by their fees.

‘Cause if it’s in your fee, you have the money for it.

Ok – so to revisit the formula, in the post referenced above, it looks like this:

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

And I counsel VAs to take more time off than they ever had working for someone else. You need it, trust me on that.

I'm happy to say that most VAs I know are taking some time (I still think they deserve and need to take more!), but they’re not compensating for it in the formula, so it’s not “paid” time away. No wonder they can’t “afford” it. :)

Here’s what it would look like (roughly) without compensating for the time off:

Suzie is 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 (although taxed, of course!)
• $14 is profit for the business

Awesome. Except that those seven weeks she’s not working? She earns nothing, nada, zilch.

And that’s ok, if that feels like what you want to do, but I think you deserve to be able to “afford” to do it, and most people will never be able to unless they are compensated for the time.

So if our pal Suzie wanted to cover her time away, here’s how that would look:

7 weeks off x 25 billable hours/week = 175 hours

175 hours x $23/hour = $4025

Going back into the formula, adding that amount into the indirect expense:

$39K (rounded)/1125=$35/hour costs

$35+$23+15+20% = $88/hour instead of the previously thought of $84/hour.

Who knew that four little dollars more per hour would amount to $4K over the cost of a year?

Your numbers will obviously vary because they’re your numbers, and every person’s numbers are different,, but work them. To be paid, cover your expenses, and have a bit left over so that you can say you have a profitable business and speak the truth about it, work the formula--the numbers don’t lie.

Your turn: Run the formula… where are you?

Best service to clients? The truth.

If it came up once, last week, it had to have come up nine times. MOST of the times, from clients searching for great VAs.

It’s this notion that working with a VA is less expensive than hiring employees—in part, because the client doesn’t pay for things like benefits, where an employer would.

I’ve written about it before (probably more than once, but that post is a goodie), so I won’t belabor it with you. Just know, in case you don't have time to read the post now, that the notion is a load of crap.

Instead, I want to share what the clients said to me, once I’d set them straight.

Representative convo:

Client: And it’s so great because I get to save money in not having to pay for anything other than the VA’s time! If I had to have employees and pay for insurance and time off, I couldn’t afford to get the help I obviously need.
Me: That idea that you don’t pay for anything other than time isn’t accurate.
Client: What do you mean?
Me: (No need to write what I said—it’s in the post I suggested you read, above)
Client: Ohhhhhhh. Ummm… well, that makes sense, of course. But why would they tell me something that isn’t true? Now that I think about it, it doesn’t make me feel exactly safe with this model.

Now, so that you know, I tell clients all the time that the VAs they hear this from probably don’t really know better themselves, or aren’t thinking about it enough to see that it doesn’t make sense. I do all I can to make sure the client’s know that they are safe with the model. AND, I suggest they actually talk with VAs they consult with about profitability because a VA who covers her expenses and is profitable is a much better long-term choice than one who is clueless about this stuff.

Bit O’Moxie: Have the moxie to tell the truth. The reality of what you offer is so awesome that you don’t have to “spin” it in order to make it appear more attractive. AND, you do the client no favor by presenting anything other than the completely real and true picture of what’s going on in every context—this one, included.

Clients need the whole picture so they can make good decisions for themselves. Without it, expectations are unmet, and they can feel taken advantage of and unsafe.

Understanding that your fee covers your expenses allows them to really understand what their money is doing—and whether it’s a best use. After all, for some clients, the best solution actually is hiring an employee! But no client can think through that strategically if you’re painting an unrealistic picture.

And there's absolutely no reason that you have to. The picture is beautiful, as is.

Look, we all pay the expenses of the businesses we buy from. That’s how it works. Whether you go to the grocery store and buy eggs, or go to the dry-cleaners, the dentist, or the car wash, part of what you pay covers the business expenses—including the benefits that are paid to workers, if the business has them.

Your Virtual Assistant practice is no different from any other business. If your fee does not include coverage for your expenses—including the benefits you provide for yourself, then you are not profitable. Said more straightforwardly--you're probably volunteering for yourself.

I want you to succeed and thrive in your business… not just get by. I want you to know that you can pay for everything that needs paying for, and pay yourself, and make a profit. In truth, that’s the only way you’ll be in business for more than about a nanosecond.

So feel free to stand up like any other business owner and tell your clients what’s true about your fee (should the conversation come up). You may do them the greatest service ever by simply giving them the real view of things.

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.