Susan wrote to ask:

I’m a speaker, in my second mastermind group where the leader has told us that we shouldn’t pay a VA more than $20 per hour. Given that your VAs’ fees are higher than that (and even hiring an employee would cost less), do you ever feel like you should be justifying that?

No; I don’t.  But I feel that you should ask the people who tell you that to justify what they’re saying, because what you’re being taught is just crap.

Listen—I hope someone has taught you the importance of running a profitable business, and more, how to know whether you are or aren’t. If you don’t know, I’d love to schedule a call with you to help you with that.

But let’s assume for the moment that you understand what goes into making a business profitable. And let’s assume that you know how much you need to earn to be so.

If you think about it, do you, for a second, think you could run a profitable business, covering your indirects and paying yourself, on $20/hour?  At least here in North America, with our systems of taxation alone, there’s just no way.

It's short-sighted at best, and grossly negligent at worst that you've been told to not pay a VA more than $20-hour. You couldn't be profitable at that rate. Why would your VA be

The thing is—many VAs haven’t been taught to be profitable, and don’t have a clue what they need to be so. Most people who use the term “freelancer,” don’t even know they’re in business for themselves. Go off the grid a bit and look at the people offering services on Craigslist, or through the neighborhood email list, and they think $15 or $20/hour is terrific because they don’t know better. And as a result, they’ll take your $15 or $20/hour. Chances are it probably looks pretty good to them.

But people in unprofitable businesses don’t stay in business very long.

So it’s short-sighted at best, and grossly negligent at worst that your mastermind leaders have told you to not pay more than $20/hour.

And as much as VAs deserve to pay herself well, cover her expenses, and make a bit more (aka profit), you deserve to work with someone running a solid (and profit is a part of that) business. Why would you invest in anyone else? Why would you trust someone else with the keys to your proverbial kingdom?

As to the idea that you could hire an employee for less—it’s absolutely possible that working with a VA could be more expensive. But that depends on how you value your time, and how easy you like your life to be.

When you hire an employee (even a virtual employee), on top of a salary or hourly wage, you have a ton of things you need to administer (payroll, maybe benefits), many things to buy or lease (equipment, furniture), you have to deal with a variety of insurances (workers’ comp, unemployment), pay your share of taxes, conform to Federal mandates (OSHA, ERISA), and you have to share space well (no more working in your pajamas!), or if your employee works for you from home, you’re legally compelled to make sure that, at a minimum, her work environment is ergonomically safe. It requires a lot of time to set up and keep on top of, and it can be energetically grueling.

Virtual Assistance was never intended to be the low-cost alternative to getting administrative and operational support. It was intended to be, and absolutely is the most convenient alternative to having on-site or virtual employees provide that support. As a result, you pay more for the convenience of working with another business (not your employee) and having none of the responsibilities and requirements listed above

If you value your money over your time, and you don’t quickly draw the connection between the fact that spending your time comes at a cost, then you might find working with a VA to be expensive. But if you want more time for yourself to spend in ways that matter to you, then working with a VA is truly a bargain. And working with a VA who runs a solid and profitable business is a smart bargain.