One of the things virtual assistants often ask when they’re starting out is whether they should start with rock-bottom rates to get more customers. For virtual assistants with little or no experience, offering cheap rates seems like a fast and easy way to have a competitive edge over the competition. Everyone wants a bargain and if you provide the best bargain, people will flock.
There’s no denying that providing lower rates is a good way to market your services. At times, it’s even expected especially if you have very little or no experience or skill to justify asking for a higher price. Some would even say that it’s a reasonable and fair.
But there’s a difference between having reasonable rates and having cheap rates. Sometimes these two rates coincide with one another but most of the time they don’t. For the most part, what you know you can offer as a virtual assistant should be the factor that determines on whether or not starting with cheap rates is reasonable for your business.
- You get a customer base pretty quickly, especially once the word gets out that your rates are lower than other VA services. This strategy would work well if you don’t have any specialized services that would help you stand out from the competition, you have a lot of competition, and you don’t have the experience or skills to compete. Cheaper rates would help you get the clients that you need to test and hone your skills on; and you could add this to the cost of doing business.
- It’s easier to market your services when your start out with low rates. People are always looking for a bargain. And if you’re prices are lower than everyone else’s, then people will want to know.
- You might end up having more clients than you can handle. If you’re just starting out as a VA, pacing yourself is extremely important. It takes a lot of practice to become very productive, squeezing in as many tasks as you can in every hour. Having lower rates means you may have to take in more clients than you can handle in order to be profitable. And if you have to work longer and work more in order to earn just enough, then you’re not making the most of your time as a VA.
- You’ll be forced to keep clients you don’t want. This is related to the paragraph above. If you need to have more clients in order to be profitable, this might mean you have to accept work even from clients that you don’t like: clients that are too demanding, that don’t provide clear instructions, etc.
- Difficulty raising your rates. Some of your clients will leave once you raise your rates and your income will drop. But if you provide quality service, you market yourself well and you have a good relationships with your clients, you can expect your income to pick up in the future.
- Being associated with low quality. Cheap doesn’t always mean low quality but some people might think that the way you do business may have something to do with your bargain bin prices. This isn’t true in most situations but there’s a reason why people often say, “You get what you pay for”.
- It might now be worth it. If you have a marketable skill, there’s really no point in starting really cheap. Yes, you should set rates commensurate to your skills but you shouldn’t undersell yourself. If you have a skill that most VAs don’t have, use that as your leverage to get better rates. There’s no point in marketing yourself as a VA is you can’t get as much as you can out of it.
Starting a business is difficult enough. The best place to start, for any business, to start with a pricing scheme that’s fair and reasonable. An objective assessment of your skills and market research are just some of the factors you can use to help you create a pricing scheme that works for you and your client. With hard work, marketing, good client relations, and lots of luck, there’s no reason why you shouldn’t succeed as a VA with rates you can live with.