HOW TO DETERMINE THE PRICE OF YOUR WORK?

Most virtual assistants who are just starting out face the challenge of choosing the right pricing model. It often happens that virtual assistants set too low an hourly rate, for fear of not finding clients.

Such an approach creates problems for both the assistant and the client in the long run because it is difficult to subsequently increase the contracted price, without explaining what additional value you provide the client.

You are again in a situation where you have to deliver something extra to rationalize the price increase.

On the other hand, the client calculates the cost of your service according to the price you agreed on and plans his expenses accordingly. He also invests his time in you, introduces you to his work, counting on long-term cooperation.

That is why it is extremely important to set the prices correctly from the start, in order to avoid unpleasant situations with clients, but also the inevitable burnout if you work too much and earn too little.

That's why we're going to break this process down into simple steps to help you understand all aspects of pricing.

1. CALCULATE TAXES AND OTHER CHARGES

The amount of tax that the VA will pay, depending on the business model it chooses. Toni Milun created an excellent and simple calculator for the participants of our course for virtual assistants, with which they have accurate information about which business model is the most profitable for them personally.

As a virtual assistant in Croatia, you will be treated as a self-employed person. You can do business through your own company, craft, work contract, specialized platforms that offer you the possibility to use their platform for invoicing and receiving money from clients, for a certain fee, eg Native teams. This means that you are responsible for reporting and paying taxes, contributions and all other legal obligations.

Good news? As a self-employed person, you have the freedom to choose how, when and where to work!

However, it is also important to remember that you will have to take care of all accounting and tax obligations yourself, including paying tax advances and filing the necessary returns.

Often this cost will also include a bookkeeper, if you are not competent to keep business books yourself.

From the very beginning, we advise you to keep records of all expenses. That way, you will have control over the situation and you will be able to react quickly if the cost projection you made is not realistic and make a correction.

As a self-employed person in Croatia, plan to set aside around 30-35% of your income for taxes and contributions. If you don't pay your quarterly tax advances, you could face late filing penalties when you file your annual return.

2. DEFINE HOW MUCH INCOME DO YOU NEED?

If you plan to make your virtual assistant business your main source of income, it's a good idea to set prices based on your financial needs.

For example, if you need to earn €4,000 per month after tax, you should plan to have a gross income of around €5,715 to cover all expenses and taxes.

3. DEFINE HOW MUCH TIME YOU CAN ALLOCATE

Being an entrepreneur is not easy, especially in the beginning. You will have to devote a lot of time to finding clients, developing the business and delivering services.

We recommend that you devote at least 5 hours per week to just developing and advertising your business, in addition to the working hours you will spend on client tasks.

If you are serious about building a successful business, it is crucial that you organize your time and be disciplined.

Set a schedule that doesn't change and stick to it.

4. DETERMINE THE PRICE OF YOUR WORK

Once you have calculated how much you need to earn per month and how many working hours you can devote to the business, you are ready to determine your price.

Let's say you can dedicate 40 hours a week to your work, and use 5 hours a week for development and marketing.

That leaves you with 35 working hours per week, or about 140 hours per month to bill for your services.

Using a simple formula, you can calculate your hourly rate:

• Determine the desired monthly amount of income (salary for which you want to work) - e.g. 2,000 EUR per month
• Make a projection of annual business costs and divide the total amount by 12 months (costs of internet, telephone, software, equipment, contributions, taxes, etc.) so that you get an average amount on a monthly basis - for example, 300 EUR per month
• Determine the amount of hours you want to work per month (e.g. 160 h)
• Add up the total amount of the desired monthly income and add the monthly operating expenses (2,000 EUR + 300 EUR = 2,300 EUR)
• Divide the received amount with the amount of hours you want to work per month and you have received the amount of the minimum hourly rate, which should be the price of your work with clients - 2,300 EUR/160 h = 14.38 EUR/h

DIFFERENT TYPES OF PRICES

You can charge for your services in different ways, depending on the type of work and the preferences of your clients:

• Hourly rate - The simplest way of billing - you charge per hour worked
• Package price per project - Fixed price for a specific project, regardless of hours spent.
• Retainer packages - Fixed monthly fee for a certain number of hours of work each month.
• Package of usable hours - The client pays in advance for a certain number of hours that can be used within a certain period.

Pricing can be challenging, but with the right information and planning, you can set prices that reflect the value of your services and ensure the sustainability of your business. Always consult a tax professional to ensure you meet all legal obligations.

The GoThrive platform offers the resources, advice and support you need to successfully build your career as a virtual assistant.

Join our database of the best virtual assistants in the industry!