Hourly rates or monthly retainer?


How to decide which is right for your clients and your business

There’s no such thing as an average VA, and no such thing as an average client, which is why it can be a demanding to task to decide whether to encourage a client to move onto a monthly retainer. There are pros and cons to both routes and one of the key considerations is how you’d like to build your business.

If you became a VA because you wanted a varied and exciting work life with a chance to experience many different projects, having too many clients on monthly retainer would be a backward step for you. It would lead to a regular routine of doing similar tasks at similar points in the monthly cycle – very much what you were trying to get away from! On the other hand, if you like to know what money is coming in every month and appreciate the security of a reasonably routine working day, week and month, moving clients onto a monthly retainer could work for you.

Then there’s the question of billable hours. The main problem with billing by the hour is that there are only so many hours you can bill in a week, and if all your clients are paying by the hour, you’ll find yourself working 40 hours a week flat-out which allows no time for marketing and can lead to you doing mundane work that doesn’t thrill you, or develop your skills, but because it’s paying the bills and there’s no other hours in the week to look around for better work, you feel stuck with it.

The main problems with a retainer?

Two things:

  1. Clients can think they ‘own’ you and that means difficulties when you want to take a holiday or when they want their retainer to cover the last three days of every month, which is when all your other clients want your time too.
  2. Since the recession, retainer clients have been quicker to cancel if their own business looks even a little wobbly, which can leave a VA with a large hole to fill in their own income, and those clients don’t seem to return – possibly moving onto hourly billing with another VA when things look up.

Hourly clients, by contrast, seem more willing to talk about the problem and explore how to get the help they need from their current VA within the constraints of their budget.

So the obvious answer is to find the right balance of retained and hourly clients, with the skeleton of a VA business being supported by clients who want the security of knowing what they’re going to be paying for, and the certainty that ‘their’ VA will be taking care of their needs.

Around this structure a more flexible hourly billing can be highly effective for a VA both in giving scope to generate more income and also in growing a VA business that allows less developed skills to be honed and areas of professional development to be focused on. It also gives more space for marketing of your VA business which is vital for the long-term stability of your enterprise and allows new clients to get a ‘taste’ of what you offer on an hourly basis without having to commit to a retainer in the first couple of months.

So how do you determine your hourly and retainer rates?

Well there are as many ways as there are businesses. Remember what I said about there being no ‘average’ VA or client? There’s no ‘average’ fee either, but here are some considerations to bear in mind when setting your rates:

  • A monthly retainer has two big benefits for a client; that their work will be given a clear priority and – usually – that they pay a reduced rate for that work because they make a monthly commitment, so set your retainer fee attractively lower than your hourly one.
  • Bearing in mind that you’ll probably set your retainer rate lower than your hourly rate (it’s the biggest incentive for clients to move to retainer structures) it’s important not to underprice your retainer fee.
  • In addition, retainers can ‘teach’ clients to send you work at the last possible moment to use up the hours that they’ve paid for. This can add to stress without adding materially to your profits or wellbeing – price your retainer to ensure you’re compensated for such behaviour!
  • On the other hand, hourly rates have to be competitive – talking to other VAs about what they charge is helpful, and can lead to reciprocal arrangements where you agree to take on work for each other at busy times or to cover holidays and sickness.
  • During the fee conversation clients may focus entirely on cost; make sure you bring the conversation back to other things that matter: reliability, professionalism, meeting deadlines, competence etc.
  • Finally, remember that it’s good to overbudget a little, because no client has ever been unhappy about paying less than projected!


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  1. Thanks for this excellent ‘SWOT analysis’ of VA charging structures, Sarah. It’s a great insight into the points to be taken into consideration when setting your fees.
    I’ve been badly stung twice by retainer clients. Also, I can’t lose of the ingrained PA habit of saying “I’ll sort it” and taking on work from the retainer client which will push me way over the retainer hours paid for that month – and then not charging for the extra time (totally my fault, not my clients’).
    Now I don’t automatically offer retainers to new clients. You’ve touched on these topics in the article, but there is also the vexed question of getting the client to pay in advance. Or, even worse, getting to the end of the month and the expected payment is MIA. Having a set amount (hopefully) coming in regularly each month isn’t worth the hassle.
    Obviously this approach doesn’t suit everyone, but I much prefer to have an agile hourly rate, or work on one-off ad hoc projects at an agreed cost once I’ve established for myself (very important) exactly what work is going to be involved.

    • Thanks Debby and thanks for your comments relating to the topic. It is very difficult to decide the best route for you and your business. And of course it also depends on the client. But great that you’ve found what works best and are happy to stick with it.

      I’ve often been stung with the “oh it’ll only take a second” mentality too – which has often led to lots of time not actually billed. But that’s actually why I do offer the retainer – under very strict terms – as, for me, the hourly work sometimes would get overlooked if it’s a very quick job, not the retainer work. Your query about payment upfront hasn’t affected me … yet! And I hope it never does. I bill upfront and don’t start any work until he invoice has been paid. I then keep a very close eye on the hours and use tools to ‘count it down’ so I know when I’ve got to the end and can’t work any more that month without charging.

      Having said all that, I do prefer and mainly use the hourly billing method, as my checklist when deciding on taking on retainer work is lengthy:)


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