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How much do we charge???

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by psk

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Hello everyone...this is my first posting and I'm hoping for some advice and feedback. I'm new to IT and started a consulting business about a year ago here in South Florida, after 25 years of insurance sales and the resultant burnout, and have managed to accumulate about 25 customers via word of mouth references. My best client is a very successful small family business that is growing, and we've mutually agreed a service/ maintenance agreement is appropriate going forward. They have a p2p network with five workstations, but are in the process of building a new office and will be growing to about 8. They also have satellite sales offices thoughout south florida which I occasionally visit to address problems. I've managed to bill them approx. $10,000 this year, but that includes a minimal amount of hardware/ software that I purchased on their behalf. I've been charging $65 per hour and plan to increase to $75 by January. So, my question is how do you guys customarily structure these agreements? Thank you, in advance, for any suggestions and advice.

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by fbspector

Are you asking about the service agreement or are you concerned about the going rate? I have been in the biz for 26 years now and my service agreements are varied. The verbiage is the same legal jargon, but the price depends on the client really. You know your customers. Some are high maintenance and some are easy. Some take forever to pay, I bill accordingly. I have no choice, but it has kept me in biz for a while now and no complaints.

by dmambo

As an occasional consumer of IT consultants, my experience is that for general network work, I have paid $85/hr to a guy who has been in business for 10+ years. He gives me a $10 discount if I buy blocks of 10 hours or more and pay in advance. He would "bank" those hours for me for use at any time. He is also pretty good about not nickel and dimeing me for every phone call/e-mail. I don't call upon his services too often, so I don't know if he's on retainer with his regulars, or if he gives them a better rate.

For specialized VAR work on our MRP system, I pay $135/hr, which, IMHO, I feel is a huge rip-off. The software vendor requires that we have a business partner on-site for major upgrades or they will not allow us to maintain current licensure. This guy is a couple hours away, and I minimize his time as much as possible.

If I were you, I'd try to structure it so that you get an annual fee, say $6,000, which includes 8 hours per month of services whether they use it or not. Additional hours above 8 are billed at a better rate than your standard hourly, maybe $5 less per hour.

Pay to have an attorney draw up the initial contract!!!! Then you can use that as boilerplate for future agreements. It'll be money well-spent.

by psk

thanks for the good ideas, DMambo...i appreciate your investment of time to my concerns.

by carlton.tilley

consider a three way billing approach. Retainer:get a clear and defining defenition of the sevices to be preformed in your contract on a monthly basis. make sure you add an aditional services clause or state anything outside of the defining contract will be billed as aditional services. that will leave you the flexablity to charge for Flat Rate Billing: for small jobs and By The Hour: for medium sized jobs that may occure with your client. Get The Picture?

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