Would you like to pick up an extra $200 to $600 a month without quitting your full-time job and without getting into a multi-level marketing scheme? If you have the gift of gab and the right technical skills, you can probably find at least one client willing to pay you for on-call tech support. This week, I’ll tell you how I negotiated a sweet deal that lasted nearly three years.
Negotiations and service level agreements
Before you enter into an agreement to provide ad hoc tech support, you need to decide whether you’re going to agree to be available "on call" or "on retainer." In her September 2000 article "Negotiating on-call and retainer arrangements," TechRepublic contributor Meredith Little explains the difference. "Being on call implies that your client will want you to respond immediately," Little wrote. "On retainer implies that the client wants you to be available to work on specific projects. While you would be needed within a reasonable amount of time, the element of urgency is probably not as great."
Little also discusses the necessity of creating a service level agreement (SLA). That document defines exactly how often and how quickly you’ll be expected to respond to calls for help.
Many tech support professionals don’t pursue those relationships for a couple of reasons. First, our "day jobs" often demand more than eight hours a day, and there simply isn’t much time left over for moonlighting. In addition, many techies don’t want to get tied to any particular client unless the circumstances and the money are just right.
Case study: Prepaid, on-call phone support
I was introduced to the concept of "money on the side" by a coworker who would build and install local area networks for small businesses. He ordered and installed the machines, configured the software, collected his check, and was on his merry way.
One of his clients asked if he could update a custom database application, and that’s when he called me. Over a three-month period, I billed the client for around 100 hours (at $75 per hour) for analyzing and updating his software. During that time, the only written agreements we had were the design specification documents. I made the client sign off on every change to screens and reports.
When the programming work was completed, the client asked me if I’d be willing to provide ongoing support for his end users—store managers located in eight or nine cities across the United States. We expected that, from time to time, users would need help working through reports, recovering data, troubleshooting printers, and so on.
The client’s first question was "You’re not going to charge me $75 to talk to my managers on the phone, are you?" This was the key moment in the negotiation.
"I’ll do it for $60 per hour," I said, "but I’d like to be paid in advance."
The client liked getting a discount on my normal rate (most clients love to feel like they’re getting a bargain) but wasn’t too keen on paying me in advance. However, I won him over by offering to provide 12 hours of support per month, if he paid me for 10 hours in advance. Here are the details we ironed out in our SLA:
- The client agreed to cut me a check for $600 every month.
- I agreed to respond to all calls within 24 hours and to notify the client when I was going to be unavailable due to vacation or other reasons.
- I agreed to provide up to 12 hours of telephone support per month for that $600 fee.
- I agreed to "roll over" any unused time to the next month.
- In months when I provided more than 12 hours of support, the client agreed to pay me $60 for each additional hour above and beyond the hours that had been rolled over.
- I agreed to bill the client to the nearest minute of time spent on the phone with his people.
- I agreed to provide, each month, a report showing how much time I spent supporting each of the client’s managers. The client used that report to bill back my time to each business unit.
For the first year or so, the client used up the prepaid hours almost every month. There was a lot of turnover, and the client needed me to train and support new employees. In the second year, the client had less turnover, and the senior employees were training the new employees. The client needed less and less tech support and had rolled over lots of extra hours.
In the second quarter of the third year, I provided only three or four hours of support in each month. The client, understandably, decided to discontinue our on-call support agreement.
There was no provision for refunds in our agreement, so the client couldn’t get his money back for the hours he’d already purchased. However, I agreed to honor all of the hours that had been rolled over, even after the checks stopped rolling in. Every now and then, I still get a call from one of this client’s employees asking for help, and I’m darn happy to oblige.
Jobs on the side
Have you successfully negotiated an on-call or retainer relationship with a client? If so, share your experiences with fellow TechRepublic members by posting a note below or writing to Jeff.