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Rate Structure/Policies

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Tonight I sat down and finalized my fee and rate structure, and detailed the different policies, etc that apply to each. I put it all into a spreadsheet, and I was hoping you all would take a look at it and see if you notice anything that is unclear or any red flags before I put it into contract form. The rates themselves have been removed, but just suffice it to say that PAYG>PPDH>MRET>LRET.

 

The abbreviations used are:

PAYG=Pay-As-You-Go

PPDH=Prepaid Hours

MRET=Month-to-Month Retainer

LRET=Long-Term Retainer

 

SPREADSHEET

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One thing I would recommend is no rollover hours. This is going to be a complete nightmare for you.

 

I know, I know, that's the general consensus - I've gone back and forth on it, and I really want to offer it as an added perk for my best clients, which is why it is only offered on a 12 month long-term retainer complete with Early Termination fees and the whole 9 yards, and on an extremely limited basis. I'm still thinking about it - I've already changed my mind 6 times this morning, lol, so I may take it out again, but I'm about 90% sure that I still want to have it in there under that one program. The PAYG doesn't really have rollover hours - I just want to get everyone on the same schedule, so I am allowing the initial 2 hour deposit to be used through the end of the first full month, after which they get billed monthly for the 2 hour deposit at the end of the month.

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This is a good chart for all VAs to start and figure out their pay schedule and thanks for sharing :)

 

So is the PAYG rate twice the price of the hourly PPDH rate? That will definitely entice people to pay up front which is a good idea.

 

Anyway you can, be it discounts on retainers, etc. you want to try and entice your clients to pay up front. Why? Because it saves you time at month end. You don't have to hunt down clients to get your money owing to you! ;)

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This is a good chart for all VAs to start and figure out their pay schedule and thanks for sharing :)

 

So is the PAYG rate twice the price of the hourly PPDH rate? That will definitely entice people to pay up front which is a good idea.

 

Anyway you can, be it discounts on retainers, etc. you want to try and entice your clients to pay up front. Why? Because it saves you time at month end. You don't have to hunt down clients to get your money owing to you! ;)

 

Thanks, it really did help to put all the thoughts swirling around in my brain into some sort of recognizable format, and help me sort through it all. I have versions of this scribbled in multiple places as I've jotted down ideas, but typing it out and putting it into categories helped me really nail down exactly what I want to do and really highlight what the pros/cons are to each model. I hope the idea can help someone else, as well.

 

As for the difference between PAYG and PPDH, it's not quite twice, but the difference is significant :)

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I am going to play devil's advocate here. Although you have done a fantastic job at setting everything out, I found your chart a little confusing. As a client I might just run away in the other direction and find a VA that has a simple $x per hour rate without worries as to rollovers, due dates, specials, etc..

 

From experience I have gone from having several different pay structures to one very simple one - $X per hour billed for exact time spent on a project.

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I appreciate that and see your point. This is not something I would ever show to a client - I think if I didn't know what I was looking at, I might run screaming in the other direction were a potential service provider show this to me. Most of the information here is for my reference only, and for contract purposes (and a client would only see the contract for the specific plan that they choose - the rest won't be there).

 

All a new client really needs to know is that they can Pay as they go for a higher rate and a 2 hour minimum per month or they can pre-purchase blocks of hours at a significant discount to be used within 60 days. I won't be offering retainers for the first 2 months working with a client, as I believe that it will take at least that long to really get a feel for what a client wants/needs and whether we will work well together. After that, I will offer them the opportunity to move to a retainer for an additional discount.

Edited by AmandaB

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After playing with numbers and so forth for a while, I decided simple is best:

 

Hourly rate: $XX

Prepaid blocks of hours - 10% off Hourly Rate with 1/4 hour billing

Monthly Retainers - 15% off Hourly Rate; billing 1/10th hour; 1 hour free strategy planning per month; referral program participation

 

I've scored 4 new clients in 2 1/2 months since switching to this simple formula. I've also got 6 possible referral clients. One I know I won't take because they are bound and determined that the site needs to be redone first (even though my web goddess has said its fine, it just needs some SEO done on it)

 

Its good to go through all of that so you know where you stand and what you want/need from your clients. Just keep that to yourself.

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After playing with numbers and so forth for a while, I decided simple is best:

 

Hourly rate: $XX

Prepaid blocks of hours - 10% off Hourly Rate with 1/4 hour billing

Monthly Retainers - 15% off Hourly Rate; billing 1/10th hour; 1 hour free strategy planning per month; referral program participation

 

I've scored 4 new clients in 2 1/2 months since switching to this simple formula. I've also got 6 possible referral clients. One I know I won't take because they are bound and determined that the site needs to be redone first (even though my web goddess has said its fine, it just needs some SEO done on it)

 

Its good to go through all of that so you know where you stand and what you want/need from your clients. Just keep that to yourself.

Dana,

 

I like your set up. Do you let them decide how many hours they want to prepay and do they just use them until they are gone and then buy another block? I also like your 1 hour free strategy planning for the retainer folks; can I "borrow" that idea?

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Dana,

 

I like your set up. Do you let them decide how many hours they want to prepay and do they just use them until they are gone and then buy another block? I also like your 1 hour free strategy planning for the retainer folks; can I "borrow" that idea?

 

Feel free to borrow anything. Contact me if you need anything else. My phone number is 248-419-0341.

 

As for the prepaids - I like for the minimum to be 10 hours, but will do 5 hours with a 30 day expiration in rare circumstances.

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Hello,

 

I have a few questions. Can anyone explain how the pre-paid blocks work? Is it like a Retainer?

 

How do you figure out the Retainer rate? Do you use your high end base rate or your low end for example if your hourly rates are $30, $40 and $50 depending on the work, what would you base your Retainer rate on? Wouldn't it be better to charge at the higher rate?

 

 

It seems that there are different ways VA's bill their time i.e. 15 min increments, 1/10 of a hr, 1/12 hr increments, 1 min increments etc. What would be the best ways to figure out billing time by the minute, hr etc.?

 

As always thank you for all your input

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One thing I would recommend is no rollover hours. This is going to be a complete nightmare for you.

 

Good point. Glad I saw this as I was wondering about those. I like Dana's idea of a free one-hour for strategy planning. It will limit the time they (and I) spend "discussing" rather than getting to the point.

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Hello,

 

New to the forums here and unfortunately I wasn't able to view the PDF would love to know what your updated information and ideas are - still torn on my decisions for billing - tried hourly - got burned, now trying monthly/retainer hours or packages.

 

Thanks.

Patti

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Just to clarify my "Prepaid Blocks": If a client buys a 10 hour block with a 30-day expiration, they get a 10% discount and the time to use it starts from the day their credit card clears my bank (usually 48 hours after I run it).

 

For example, client contacts me on August 23rd, signs the contract and gives me the Credit Card Authorization on the 25th, I run the card on the 25th, it clears on the 27th. The client has until September 27th to use all the hours they purchased, if on a 30-day plan.

 

5 hour blocks, no matter what, get no discount.

 

Blocks of hours with a 30-day expiration get a 10% discount. Blocks of hours with a 60-day expiration get a 5% discount.

 

No, they don't carry over. Use 'em or lose 'em.

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Great Spreadsheet :-) I have to print it out to review it. I like many of the ideas stated. PAYG is always good. I seem to like retainers and package deals. But this thread is making me think some more. Yea for that! I just hope I don't overthink it.

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