Question of the Week – Retainer Clients vs. Pay-As-You-Go Clients

Q.  I would like for you to explain how the retainer basis works. I understand that a lot of VAs have a retainer system of some sort.

A. Laura Allen – Admissions Director of AssistU:  When I first began my practice, I offered a pay-as-you-go service.  That means you work the number of hours for the client prior to being paid for your services rendered.  I found that time management became an issue for me.  It was really impossible to gauge, especially at the beginning, how many hours a client was going to need.

Basically, the idea of a retainer is that the client is purchasing your time in advance.  You know the money is there ahead of time.  You’re able to gauge your time during the month as to how many hours the client is going to need.

That lets you move from being task-oriented with your clients to being goal-oriented.  That way you are really able to dig in deep and see the big picture.  Less than 10 hours goes by very quickly as far being able to dig deep.  It makes it hard to brainstorm and move toward some of the possible projects and places the client wants to go, but doesn’t have the time to put into right away.

Working on a retainer means that you have a contract with the client to do 10, 15 or 20 hours, whatever the two of you agree to at that time, and that time is dedicated to that clients business.

Sydni Craig-Hart: That’s a great explanation. I couldn’t have said that any better.

In my personal experience, I have almost exclusively done retainers in my business since I started. Just in the last six months I started doing a few projects because I’ve moved into web and blog design. Working on a retainer has always worked really well for me.

Also, from a practical standpoint, it makes it a lot easier to manage your cash flow. When you have a pay-as-you-go client and you’re not sure how long the project is going to take or if they’re able to pay, you can put yourself in a bind sometimes. This is especially true when you’re new and may not have interviewed the client as well as you should have or the client isn’t as familiar with virtual assistants as they would be after having worked with you.

You may run into some payment problems working under the pay-as-you-go fee structure. I don’t say that to alarm you, but so that you be realistic when deciding how you’ll work with your clients.  Setting yourself up to work in retainer partnerships only allows you to not have to worry about the money. You get paid up front. Then you can focus on giving your best service to your clients. The money is not an issue.

For more information on this, please check out my post on how to set your fees:
https://www.eatova.com/2008/10/24/how-to-calculate-your-fees/