What if someone told you that you could make more money without raising your prices? As an Online Service based entrepreneur, you would probably think that's crazy and impossible. Especially as a Virtual Assistant or Online Business Manager - aside from dropping hourly packages, the next loudest advice out there is to raise your pricing. Sound about right?
Well, I have news for you....it's NOT the only way. You CAN increase your income, work less and get more consistent income (as in stable & secure) without increasing your prices by even $1. NOT 1$ more! Don't believe me?
Well, let me tell you a story....about one of my amazing mentorship clients who happens to be a wicked fast Virtual Assistant. When we started working together we pulled together a quick business overview to evaluate how much she was working, # of clients, services and current income.
Client Biz Overview (beginning)
- 18 Hourly package clients + 6 one time small task clients (without on-going contracts)
- Packages ranged from 5 to 40 hours every 30 to 90 days
- Inconsistent billing (meaning she never knew when her next payments were coming and they would drag out sometimes for up to 90 days)
- Daily billing time to evaluate where clients were with hours and determining next invoice date
- And over 256 hours booked at any given time (let's do the math - that's about 64 hours a week)
Her goals included consistent $5k/months, onboard a team member and decrease workload (without decreasing income).
The caveat to whatever strategy we devised: she wanted to stay at a lower price range as she had a passion for the specific target audience she was serving. Although many would advise her to raise her rates to match her value, that's not what we did! However, this client did not equate her value with her price, but instead with her service to her clientele. A level of fairness that I had not encountered in quite some time.
Ultimately, the solution was simple.
New Pricing/Packaging Strategy
- Convert all packages from hourly billing to a Monthly commitment. So if a client was on 10 hours (that could be used in 60-90 days), convert them to a 10 hour/month package.
- Eliminate 90 day and 5 hour packages and replace with 10 hours/month
- Determine a scope of work to be accomplished in the hourly package and stop offering hourly packages with an unknown scope of work (this is the quickest way for fast workers to burn out)
- Determine two consistent billing dates per month
- Convert all clients she LOVED working with to new monthly packages and decline renewals on those she did not align with
- Place all new clients and converted clients on automatic payment plans
- Start offering scope of work packages (based on her hourly rate but with very defined deliverables)
By implementing the above strategy, this would allow her to do the following:
- Have consistent income on two days per month that she could rely upon
- Allow her to decrease her hours by converting the clients she loved to slightly higher hour packages and eliminate the clients who caused more stress than joy
- Eliminate the numerous hours she spent on tracking hours and invoicing
- Allow her to hire a team member who could now follow a set scope of work versus a set number of hours for anything under the sun.
Within 1 month of implementation, we revisited her biz overview...
Client Biz Overview (updated 1 month)
- 14 Monthly package clients
- 1 Scope of Work client at full time rate
- Consistent monthly billing
- Hired 1 new team member
Now, before you think to yourself, "$1200 a month isn't much." Make sure you pay attention to the fact that she decreased her client load from 24 to 15 (approximately a 61 hour decrease!! That's more than a WHOLE week's worth of work!), hired a team member and got herself out of working SUPER fast and taking forever to use up a client's hours.
So the next time someone tells you to simply "raise your rates"....take a look at your overall business overview and see where potential changes in your internal operations, pricing structure, and offerings might be. You may be surprised at how easy it can be to decrease your workload while increasing your income.
This is what worked for her, but know that something different may work for you. Interested in growing your business in a way that feels great to you? Let's talk.