Replies to This Discussion

Permalink Reply by Jean Mejia on April 27, 2009 at 5:41pm

Hi Collette!

When I sub-contract out, I currently have a client rate that I complete for "other positions" such as administration of email, phone calls, etc. Then, I have tasks that need to be delegated such as social bookmarking, blog/web manager, etc. These rates are set out by my client and then I inform my sub-contractor how much I will pay him/her.

Depending on the duties and how much "project management" I will need to interfere with, I usually keep a $1 or $2 for myself and give the rest to the sub-contractor since they are for the most part, taking a load off of my plate.

Hope this helps.

Respectfully,
Jean Mejia

Permalink Reply by JoCarole Carpenter on May 27, 2009 at 3:48pm

Collette, I have heard of both. Sometimes the contractor does have a set rate and that is what they are prepared to pay and there is no negotiation in this scenario. So that may work for some and not for others.

In my case I always charge less than I would a regular client when working with a VA practice. I feel the VA owner should make money for the marketing, invoicing and other work involved. HTH
Jo-Carole

Permalink Reply by Diane Hess on May 29, 2009 at 5:51pm

Hi

I normally pay my subcontractors a 60/40 split. Of course, the company makes 60% because I am doing all of the leg work and spending the funds to market my business. The majority of the time subcontractors prefer a percentage rate. It normally works out to a hirer volume of work for my subcontractors.

Permalink Reply by Dawn Pigoni on September 2, 2009 at 7:28pm

For my sub-contract work I take my current published price and offer 10 to 15% discount depending on the complexity of the work

Permalink Reply by Michelle Maria Nicholas on January 21, 2010 at 3:36pm

I have read the comments in this discussion and find it very helpful. I like Dianne's idea about the 60/40 split very much. It gives me a benchmark for paying subcontractors. However, I am currently in the process of working out a pricing schedule and I went about it a little more formal in that I created an Excel workbook with individual spreadsheets for each category of solutions, then on each spreadshet I list vertically subsets for each solution that is applicable to that category. For example, under Business Solutions heading I have HRM or Finance etc.

Across the page horizontally I add colums for the base rate and each category of overhead/Cost of Sales, that is the cost of doing business. The overhead/COS would include things like telephone, utilities, Internet, Insurance, etc. Each overhead expense is based upon a percentage rate that I charge back to the business. I take this base rate and mutiply it by the percentage in each column across the page to come up with a final net price. So all I have to do now is find a financial analyst who is willing to work with me to tell me how much of each service I need to sell to meet my annual revenue target. Referrals anyone or is anyone willing to swap service?
Michelle
http://www.worksmartebusinesssolutions.com

Permalink Reply by Joanne Matheson on March 6, 2010 at 12:56pm

Hi Collette, I'm setup as a subcontractor service only - my base rate is $20/hr however depending on the job I am flexible - i've worked assigned for $15/hr and for newsletters $10/page. It all comes down to honest from the VA assigning the task and being able to negotiate.

Thank you

Joanne Matheson

Permalink Reply by Janet Falkenberg on August 4, 2010 at 7:59pm

This has been an excellent discussion on rates and how VAs who hire subcontractors view the payment arrangements. The split is a fair way for the VA and the subcontractor to each get a piece of the pie. I have assumed that the VA and subcontractor would work out some type of split depending on the difficulty of the work.