Hourly Rates: Don’t Lowball to Get Clients

Reading time: 4 minutes.

Setting your rates and prices is one of the most talked about topics of independent consultants. You don’t want to set your rates too high for fear that it will drive away potential clients, but if you set them too low, you may end up putting in a lot of hourly work, for pay that doesn’t represent what you are worth. The fact is, hourly rates that you charge your clients are very closely related to the ultimate success or failure of your business. So how do you go about determining your sweet spot?

The most common mistake people make when first starting out is setting an hourly rate that is too low. This is due to a couple of things: you feel like you will drive away potential clients or maybe you don’t even know if you are worth charging a premium rate. First things first. You have to get your small business clients used to paying a certain hourly rate up front. It is very difficult to raise your rates up to where they should be after the fact. Increases of 5 – 15% yearly or overtime are normal, but if you need your hourly rate to jump from $10 to $85, you will likely lose all of your current clients.


What’s wrong with setting a low rate?

Setting a low hourly rate in the hopes of attracting new clients is a poor strategy. For one thing, these clients expect low rates in the long run and you can’t afford to give permanently discounted hourly rates. By charging too little you may have to effectively dump your whole client list and start over if you ever want to make a huge rate hike. This could cause a lot of stress or cause you to take on too many clients while you make the transition.
Secondly, low rates attract low rate clients. By setting your rates too low, not only do you look like a cheap consultant that isn’t experienced enough to charge what you are worth, but you attract clients that either don’t have the budget for a proper assistant or they are looking to cut corners in their business. Do you want to work for a person or a company that is willing to cut corners on pay right up front?

If you want to attract a few clients fast, you can offer them a “sample” service for a free or discounted rate – of course make sure they know your normal rate before you begin your services. This allows them to see a bit of your work and feel more comfortable with your talent. Another option is to give them a trial of a set number of hours for a month. If your rate is $35/hr, then give them a sample of 5 hours for the month at a rate of $175. This enables you to work together without compromising your rate structure. This will bring customers in the door but does not set up an expectation that your rates will stay low forever.

How to Determine Your Hourly Rates

Two of the biggest factors in determining your rate lie in your ideal client and your experience. Know what type of client you want to work for. If you are targeting law firms, then your average rate will be higher than if you are expecting to do services for stay at home moms. After you define your ideal client, examine the amount of experience and education you have. If you have any experience or higher education at all – maybe you have been working as an administrative assistant for a couple of years – then you should be commanding at least $25/hour. The more specialized your services though, the higher your rate can go and you can compare yourself to the industry norm. If your specialty is graphic design and you were commanding $50/hr for your services, then you need to be at or above that rate as an individual consultant. Once you determine your hourly rate, how will you invoice your clients?


Some clients may prefer to pay you hourly – that is, you keep track of your time and you bill them for hours worked. Alternately, clients can pay for a certain amount of hours up front and use your services until their hours run out. Then they can purchase another package of hours or complete their services with you. In both examples, you would track your time (you can use a tool like Harvest) and present a monthly report to your client. This shows them what projects you spend most of your time on and keeps a record of their time used.


When you contract with your clients on a retainer rate, they “retain” your services for the month at that rate. Depending on the client, they may still ask for monthly time reports, but retainers typically aren’t tied to the hours you work. Think of this as being similar to a salaried employee. Your pay is set for the month whether you work 40 hours or 60.


A project rate is quoted by you based on your hourly rate and the amount of time you predict it will take to complete a project. For example, if your hourly rate is $30/hour for web design and you estimate it will take you 20 hours to create a website (based on previous client work), you would charge $600 for the project. After you complete that project, your work for that client is complete until they contract you for another project or a different rate package. Make sure you determine your processes ahead of time and have them in your contracts. Determine what percentage of your fee you will collect up front (usually half) and the remainder will be invoiced at the completion of the project.


It’s All up to you, Really

Ultimately, you want to make sure you are making a profit. Calculate your monthly expenses, what you spend on office supplies, business memberships, co-working spaces, etc. and figure out the total amount you should be making to cover that. Also, make sure to factor in any specialty training or higher education you have so you can justify your higher rates. When clients pay top dollar for a virtual admin consultant, they will expect professionalism, experience and proactivity. Show them that they are not hiring a low rate task assistant from India and show them the Benefits of Hiring an Ambitious, Entrepreneurial Remote Assistant.

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