The Undervalued Australian Virtual Assistant: Why Pricing Matters for Success in the VA Industry
While I’ve been shouting up and down the street within the Aussie VA groups recently about how frustrating it is to see new VAs pricing themselves at the same rates (and sometimes even lower) than I was charging as a new VA almost 2 decades ago, it’s come to my attention that many Aussie business owners don’t realise that this is happening in the VA industry and that it’s a huge problem.
Over the past 2 decades I’ve been happy to see that the majority of VAs who are running professional virtual services are charging a good $30-$50 an hour more than I charged 20 years ago. So generally, between $50-$80 an hour depending on the service.
However, not only are there a huge number of newish VAs still thinking they can create a successful business that gives them freedom and flexibility on a measly $30 an hour, but there are also VA TRAINERS out there who are suggesting that they START at $20 an hour!
$20 an hour!
I’ve had a clause on my website for many years that states that anyone looking for a VA through our website needs to respect that our members don’t charge less than $30 for any service. A couple of years ago that increased to $40 minimum. I’d be more comfortable putting it at $50 an hour but I know some VAs are still charging in the 40s for basic admin.
The reason I have this clause is that you actually need to be making money to run a successful business. You also have a lot of expenses you need to factor in.
Some business owners (including VAs) think you just need a laptop and an internet service to be a VA.
This is simply not true.
If you want to run your own business, usually you envisage something that gives you a sense of pride and accomplishment. Something that allows you the freedom and flexibility to work your own hours, choose who you’ll work with and what services you want to offer.
Can you do that on $20 an hour? Or even $30?
Having client work for 8 hours a day, 5 days a week at $20 an hour sounds a lot like $800 doesn’t it.
That’s not so bad.
As long as the flexibility and freedom you were after isn’t very important to you.
And you’re sitting down so it’s not like it’s a bad thing that you’re earning around the same as someone at McDonalds.
Let’s not worry about the absence of any annual leave, sick leave or superannuation.
Marketing your business will just have to be done out of hours.
As will networking, ongoing training (if you can afford it - which you won't) and your own business admin. But you love your biz - working an extra 3 hours a day on the back end isn’t so bad, is it?
You can find clients easily who will pay you $20 an hour. So, you’ll be fully booked in no-time.
Working your arse off day and night. Always cutting corners because you can’t afford to belong to any paid communities, get insurance, sign up for training opportunities because in this day and age running a household means you need as much of that $800 as possible.
Not that you’ll get the $800 once you take out tax. So, let’s take out the 30% tax rate make it $560 to be more realistic. Which is $14 an hour for the client hours.
I suppose we should factor in those unpaid admin hours - let’s underestimate and make it just 2 hours a day. So that’s $560 income per week / 50 hours which means you get $11.20 per hour before business expenses.
But it’s worth it, isn’t it?
Because you can walk away from your business outside of those hours. It won’t be a 24 hour thing where you are worrying about your biz, your clients, your cashflow 24/7……
And for $11.20 you’re still earning more than an offshore VA….
Oh. Hang on. No, you’re not. They earn about $14 an hour without the business expenses. Sometimes more.
They aren’t actually expected to bring initiative and strategy to the table. You actually have to offer MORE than they do, to get a client to believe you’re worth more than an offshore VA even when you're only charging $20 an hour.
And with $11.20 in your pocket, I’m sure you’re wondering why you’d bother bringing more to the table. Why are you working so hard for so little?
OK so let’s consider expenses. That laptop, the internet connection, your mobile phone.
What about if you need to pay for some software subscriptions? You want to attend some training sessions? Build your community? Insurance?
Heaven forbid you’d like a coach to guide you. You can’t even afford now to pay that trainer who suggested you charge $20 an hour in the first place.
So, without those expenses, assuming you’ll be working 48 weeks in the year (some of that sick leave, some annual leave - I hope you don’t have to manage school holidays or childcare expenses) you too could work more than full time hours for $21.5k per year.
For the VAs and the business owners out there, who don’t think that VAs charging these ridiculously low rates is a problem, let me assure you that it is. Because they cannot survive. They cannot thrive. They will struggle mentally and financially.
And to the trainer out there who thinks this is a good way to support fellow women in business - shame on you. You just want to make it look easy to get clients and you want to work with women who don’t value themselves enough to realise that your messaging is derogatory and insulting. Women who deserve so much better.
You can do the math on $30 an hour and trust me, it won’t be much better. You’ll have an extra $13k a year to work with and that’s going to be exactly what you need to pay for some of those expenses you couldn’t even afford at $20 an hour. So, you’ll have no more money in your pocket but you’ll at least be able to afford the equipment.
As an Aussie VA you have to show up more than just ‘doing the task’ to make you worth the clients’ ROI. They can get people to tick off tasks offshore for $14 an hour so if you want to charge any more than that you need to have more on offer. You need to build your community, keep training, bring the intuition and the strategic mindset. And that’s worth so much more than $20 or $30 an hour.
So, bring it. But also charge for it. Because this is business, not a charity and those little benefits called ‘flexibility and freedom’ can only be achieved if you set yourself up right.
If you want to be part of a tribe that values you and will help you elevate, make sure you join us at Virtually Yours. The VA network that is all about empowering you and giving you a space to thrive and snuggle at the same time.
Hugs,
Rosie
Well said Rosie. I cringe when I see businesses outsource to VAs overseas who brag about how cheap it is… I think it says a lot more about who NOT to work for..
It’s not cool is it – especially when they themselves charge an arm and a leg.
Offshore rates are getting better which is good but they cannot be compared to what a VA in Aust needs to charge to survive. So the Aussie VA has to deliver a higher level so they are actually worth more. But who would bother at $20 an hour. Not me that’s for sure.
Thanks for commenting!
Rosie