During a recent conversation, a friend asked what was the difference between hourly, retainer and project rates. More specifically, how could she figure out which one she needed?
Excellent question!
The three most common ways VAs bill are Hourly, Retainer, and Project. The term Day Rate or VIP day is also growing in popularity. There is no right or wrong way to go, only which option is best for you.
And you can adjust as you need.
Most VAs will charge hourly to get a sense of what their clients need and as the relationship grows and the number of hours a month becomes more consistent, they will shift the client to a retainer. Or vice versa.
Knowing the options will help you figure out what you need for your business and find a VA who fits the bill.
Hourly or Pay-As-You-Go (PAYG)
Time worked is tracked and billed by the hour. Usually a VA will track their time using time tracking software. At the end of the week, month or determined pay period, the VA will invoice for the hours worked. Clients pay for hours worked after they’ve been worked.
Paying by the hour is the most popular way to pay when you’re getting to know your VA. This option gives you the time to establish trust, get consistent in handing off work, and determine the actual number of hours used each month. Paying hourly ensures that all the time paid for is time worked. This helps avoid the conversation of additional hours or unworked roll-over hours.
This is helpful in the beginning for clients to make sure they have enough work to fill up a retainer each month and determine their budget. However, most VAs prioritize retainer clients over hourly clients and by not having a predetermined number of hours, a VA may or may not have time to work on a project with the demands of other client work.
Retainer
A pre-paid package of hours per month. Retainers can start as low as 5 hours or as many as 20+ hours a month. Clients pre-pay at the beginning of the month for the hours that will be worked.
When setting a monthly budget, a retainer is more ideal because you’ll know what you’re spending a month and approximately how many hours that will give you. Clients can use the hours however they need. The VA sets those hours aside each month and plans around them.
The downside is who is in charge of making sure those hours get used…the client. While a good VA will make every effort to fill up the time, it’s ultimately the client’s responsibility to give their VA enough work for the number of hours paid for. If a client doesn’t use their monthly retainer hours by the end of the month, the VA is unlikely to rollover unused hours to the next month.
If you know you have regular tasks every month like creating social media content, email inbox management or scheduling, retainers work well. Retainers can be a bigger financial outlay and you have a fixed cost whether you use the full number of hours or not.
Projects
A quoted rate for the scope of the project. Projects are typically one off tasks that are not repeated, have a start and end date, and have specific deliverables in exchange for the project rate. Projects don’t require a monthly commitment.
However most virtual assistant tasks are repetitive in nature and don’t lend themselves to project status.
Day Rate/VIP Day
A set package of hours that are used in one day rather than spread throughout a month. Clients pay for the number of hours for a single day to be used on whatever tasks fit into the day.
This structure works well for clients who are in a time crunch and need to get projects done quickly and efficiently without the commitment of a long-term VA.
Deciding on the right billing plan is as unique as your business needs.
- Do you need only one-time work for a specific project?
- Do you need consistent help or occasional support?
- Are you looking to build a relationship with a reliable professional?
- Do you need general admin support or specialized skills?
Asking the right questions will help you determine the best billing plan for your business.
Need support figuring it out? I can help! Leave a comment below or send me an email.
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