Jump to content
Guest

Retainer Fees

Recommended Posts

Guest

Hello All!

 

I've been thinking ahead to when I have my first client and how to go about getting paid. My rate will be $25.00 per hour and I want to know if I should charge a retainer fee before starting a task. Is this appropriate? If so, how much should I charge? Also, once the client is an established regular, do I continue to ask for a retainer fee or should I only do this for new clients? I welcome everyone's input and advice and I apologize if I've repeated a topic that has already been discussed.

 

Wishing you all a great day!

 

Liz

Share this post


Link to post
Share on other sites

Guest

Danielle,

 

Thanks for your reply and for setting me straight about retainers versus deposits. As you can see I have a lot to learn, espcially about setting up a fee structure. I never considered charging a client based on hours per month so that's something I need to think about as well. Looks like I have a lot of homework to do. Anyhow your input is greatly appreciated - thanks!

 

Liz

Share this post


Link to post
Share on other sites
Guest clark_christa

Excellent info, Danielle!

 

It's that kind of explanation that makes things much easier for us newbies!!! smile.gif

 

Christa C.

Share this post


Link to post
Share on other sites

Hi Liz:

 

If you want, you can go to my rates page which will give you a good idea of how retainer and PAYG works. If you decide to do something similar, all I ask is that you don't plagerize and use your own words. smile.gif

 

Rates

Share this post


Link to post
Share on other sites
Guest

Naomi,

 

Thanks for the offer to browse your rates page. It was helpful and much appreciated. Now I have a better understanding of how it works.

 

As for copying your words, you don't have to worry I would never do that. When I write something I want it to reflect my own personality and read as I would speak. It's one thing to take an idea and put it in your own words, but to flat out copy something word for word, without permission, is stealing. I gather that this has happened to you in the past and that's just wrong.

 

Again, thank you!

 

Liz

Share this post


Link to post
Share on other sites
Guest TerryGreen

Liz,

 

I agree pretty much with what everyone else said . . . except, I don't agree that you will be shooting yourself in the foot if you offer a retainer rate for less than 20 hours per month. Quite the contrary. I offer 10-15-20+ hour retainers, with the discount based on the # of hours per month (10%-15%-20%) If you did the same, at your rate of $25.00 an hour, you would see the following:

 

10 hours @ 10% = $22.50 per hour or $225.00 per month

15 hours @ 15% = $21.25 per hour or $318.75 per month

20 hours @ 20% = $20.00 per hour or $400.00 per month

 

While 20 hours a month guarantees a higher number of billable hours per month, you certainly won't be losing any money. Plus, I find that clients are more apt to start at 10 hours per month over 20.

 

The above is just an example. I am sure other VAs have other formulas for how they compute their retainer rates, but the above works for me wink.gif .

 

Terry

 

Share this post


Link to post
Share on other sites
Guest TerryGreen

Danielle,

 

Please explain how contracting for 10 hours of work per month rather than 20 hours of work per month has a an ill effect on your hourly rate. I came up with my hourly rate using the same principles you did, with the big picture in mind when deciding how to structure my retainer fees. While my retainer rates are discounted as a specific benefit for retainer clients, trust me, I am not being paid an employees wage for my services. I fully understand the value of my services, that I am a business - not an employee, and the process for computing a competitive hourly rate. When I originally started my business as an office-based secretarial service in 1991, my rate was $26 an hour for WP and transcription and $30 an hour for DTP. I have very successfully raised my rates over the course of the past 13 years, and charge more than enough to make a profit. Maybe I don't understand your point, because if you use the example I gave, less retainer hours per month means a higher hourly rate within the retainer structure.

 

Terry

Share this post


Link to post
Share on other sites
Guest TerryGreen

Danielle,

 

There is no need to apologize smile.gif , I was not offended. I just couldn't understand your reasoning that more hours meant less money, especially, when the retainer rate was higher for the lower amount of hours. Maybe Liz could start out with a much lower discount to encourage retainer clients since her rates are at the low end of the scale. I do, however, feel that retainer clients are the bread-and-butter clients of our industry, and are well worth the discounted rates.

 

And yes, there is certainly more than one way to skin a cat . . . that's what makes this industry so interesting and growth-oriented.

 

Terry

Share this post


Link to post
Share on other sites
Guest

I get the feeling that I'm doing something wrong by charging $25.00 per hour. At this point, I'm not up and running yet and certainly don't have clients, but if $25/hr is too low then maybe I need to re-think this before I set my rates.

 

Thanks to everyone for their feedback.

 

Liz

Share this post


Link to post
Share on other sites
Guest clark_christa

I understand what you mean, Liz.

 

I'm also struggling with my pricing structure and having been a temp for so long, I almost feel guilty charging more than $25/hr (but I didn't take into account overhead costs, etc. for my Employee Wage). But, I think in the long run it is important not to undersell your services - for yourself, your clients and the VA industry as a whole. It's a lot easier to up your prices in the beginning and give discounts, rather than surprise your existing clients with an increase down the line.

 

Still, it's not easy. Yesterday an 83 year old lady called asking me to teach her how to send an email. I don't know what to charge for that!!! (I might just do it for some tea and cookies!) biggrin.gif

 

Christa C.

Share this post


Link to post
Share on other sites

Hey, girls!

 

Yeah..me, too! Me, too!! I think I'm on the low-end, but never really realized it. I started my rate at that and have kept it....now that I've been going through all these posts from the "veterans", I believe it might be time to re-think my pricing as well. I hear ya!! What about flat rates for different projects? I know some do and some don't.

 

Have a great evening and thanks for all the info!! biggrin.gif

 

Michelle

 

 

Share this post


Link to post
Share on other sites
Guest TerryGreen

Michelle,

 

"Quoting" flat rates are ok for some projects, but just remember - you still compute them using your hourly rate and how long it will take to complete the project. Even though projects may be similar, they all have different variables and need to be considered on a project-by-project basis. I've quoted flat rates as an estimate before, but only when I use the Industry Production Standards as a guide for estimated time. Plus, I always make sure my clients know that it is an estimate, not etched in stone. I usually give a low/high end estimate as well.

 

Terry

Share this post


Link to post
Share on other sites
Guest TerryGreen

Danielle,

 

You can order the publication by contacting Nina Feldman of ABSSI. She offers them on her website. Here's the link to her resource page: http://www.ninafeldman.com/resources.htm

 

I've been using them for years, and they come in very handy.

 

Terry

Share this post


Link to post
Share on other sites

Hi all! smile.gif

 

I just want to add a little more to this topic. It might also help some of the new VAs. There are actually two common categories of VAs or ways of doing business. The first is project and piecework, and the second is relationship/partnership based.

 

The project and piecework VA/business usually works with a large amount of clients because they do a project or piece of work for a client and then move on to the next client. Many VAs' will have different rates for the different types of projects or piecework. The VAs' rates are usually calculated on the hourly rate and a standard for the type of work (similar to what Terry mentioned). In most cases, the VA invoices after the the project or piecework has been completed.

 

The relationship/partnership VA/business usually works with a small amount of clients on an ongoing basis. In a relationship/partnership set up, clients are usually long-term clients (several months to years). In many ways, the VA becomes part of the client's business. This is where the retainer is more common. The VAs' rates are calculated on an hourly rate only, not by projects or piecework. The client pays for the VAs' time to cover all aspects of assistance and the rate is the same no matter what work has been done. In most cases, the VA invoices once a month, with retainer clients paying in advance for the following month.

 

There are a few VA/businesses that meld the two common types together; however, from what I have read in various forums and postings, most VAs fall into one or the other category.

Share this post


Link to post
Share on other sites

Hi Liz,

 

I've read with much interest your original post and the myriad of responses. It seems to me that two questions have been raised - setting your rates and retainers/deposits.

 

You have to set your rates based on the value you bring or will bring to your clients, and only you can assess that value. With that said, I strongly feel that your rates should be based on your background/experience in the field, as well as the training you've received in your effort to be the best VA you can be. Also remember that setting your fees too low may say to prospective clients that you don't value yourself and your contribution, have less training than others and/or have little confidence in your ability. As a side note - If you've not pursued specific VA training, there are many options available, and that training should include instruction on setting your fees to match your value.

 

There are probably many who will disagree with me, but I no longer offer a PAYG option. However, I do have two retainer options - a 5 hour and a 10 hour which is discounted 10%. The 5 hour retainer is equivalent to my PAYG rate but allows me to get the money in advance. Most of my clients go over their retainer hours; if they do so consistenly, I encourage them to go to the next level. Terry Green's discounts make sense, and when I have more clients at 18 hours or so, I too will offer a 20 hour retainer with a higher discount. Please take a look at this page on my web site.

 

Good luck and let us know when that first client "knocks" on your door!

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Want to Become a VA?
    Invest in The VAC!
    How Do YOU Startup A

    Virtual Assistant Organization Association
    Upgrade Your FREE Account & Receive Today...
    * Access to Our Bus JOB Board *
    * Group Coaching & Training*
    *Training Tracks*
    * Private Mastermind Area *
    * Business Templates *
    * Contracts & Forms*
    * Plus VAinsider Perks! *
    UPGRADE HERE


    Virtual Assistant Organization Association

    Virtual Assistant Organization Association











×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.