Client wants to retain me

[Zurg]

Good evening everybody

A client of mine asked me if I would consider being paid a retainer instead of me invoicing them every time they request my services, he did not give me a figure yet, he just asked me to think about it.

Please keep in mind I am still studying but I foresee majority of it being online at least for this year, although I will limit my hours once they come up with a proposal.

At the moment they aren't that big of a company and their requirements are fairly simple but they are growing steadily even through the pandemic.

For me the deciding factor will be money, I don't really have any overheads aside from fuel which is still costly, its about 26km there and back home again fuel consumption is about 9.1 L/100km = TLDR = it costs me about R100 there and back.

What I offer

• I've built their entire infrastructure from the ground up including their VOIP system, I tend to resolve most issues within the hour.
• Remote support (I usually respond within 15 minutes - 60 minutes) / Troubleshooting.
• Majority of their issues would be related to admin/Microsoft Office and email.
• Advice on anything tech related ie: new devices.

I've look at what people/companies charge per hour for some of these things and my pricing is pretty average.

I think what they're looking for is a techy person who's not a fulltime employee.

I'd love input from the forum as majority of you are in the field.

Thanks

 

[|tera|]

You would need to check your previous invoices and work done.
Even if the client says X amount, you need to be able to counter with sensibility that the monthly amount is close to it at the very least.

Work may change. You may be needed more or less. So make sure you know what to charge.

 

[RVQ]

You would need to check your previous invoices and work done.
Even if the client says X amount, you need to be able to counter with sensibility that the monthly amount is close to it at the very least.

Work may change. You may be needed more or less. So make sure you know what to charge.

I agree, while I understand the clients point of view of wanting to control costs its extremely Important that you understand what the service is worth monthly. Calculate the average for all the previous work done and ensure you clearly define what the monthly retainer gives them. Consider a rolling window where a busy month can be written off against a quiet month but be clear that continously increasing workload will be means for renegotiation. I've too often witnessed clients abuse services billed at a standard rate and then have them cry foul when you call them out on it.

 

[|tera|]

I agree, while I understand the clients point of view of wanting to control costs its extremely Important that you understand what the service is worth monthly. Calculate the average for all the previous work done and ensure you clearly define what the monthly retainer gives them. Consider a rolling window where a busy month can be written off against a quiet month but be clear that continously increasing workload will be means for renegotiation. I've too often witnessed clients abuse services billed at a standard rate and then have them cry foul when you call them out on it.

Good advice with the window route.
Please do all of this in writing.
School fees are expensive.

 

[Zurg]

@|tera| @RVQ Thanks for the advice, I'll be sure to do my homework.

 

[ToxicBunny]

@|tera| @RVQ Thanks for the advice, I'll be sure to do my homework.

Definitely do your homework.

And of course, the retainer is largely meant to be a slightly reduced hourly cost for a set amount of hours per month of your time basically (in its most basic form).
If your monthly average for the last 6 months is say 20 hours per month and you've billed them R250 per hour, you then drop it to say R200 per hour for 20 hours a month. You are then assured of getting that money every month and they are also assured of getting your time but its for a lower fixed rate, but if they need 28 hours of support that month the additional 8 hours can either be as a carry over from a previous month if you adopt a system like that, or you bill them at a prevailing per hourly rate that is higher than the contracted base rate.

 

[TheMightyQuin]

@|tera| @RVQ Thanks for the advice, I'll be sure to do my homework.

The ONLY reason this client, and ANY client for that matter, will make such an offer, is because they have done the math and will save money...meaning you make less.

Work out your costs.

How often do you have to travel out there and do you normally then bill them for that?

How will a retainer affect that?

Will this be an SLA or allocated hours per month?

These guys want a permanent techie without the labor law issues.

My company have been through this a few times.

 

[Zurg]

The ONLY reason this client, and ANY client for that matter, will make such an offer, is because they have done the math and will save money...meaning you make less.

Work out your costs.

Yep I've done the math, they would need to offer me nothing less than R10k per month in order to make it worth my while without being greedy. This is based on data going back about 6 months and averaged out.

How often do you have to travel out there and do you normally then bill them for that?

Whenever they request me to do work I bill them for it but I've only recently been charging them correctly and that's where the k*k started with a retainer because they realised I'm starting to charge them standard price.
Keep in mind I have never had a proper business as a client, I'm very new to the business side and they saw an opportunity to take advantage of that.

How will a retainer affect that?

Will this be an SLA or allocated hours per month?

Yeah that's how I calculated it, otherwise if an employee doesn't want to work they can just unplug something, wouldn't be the first time its happened.

These guys want a permanent techie without the labor law issues.

I've had 3 other people tell me that, say no more.

My company have been through this a few times.

Yeah I thought it about it, definitely not doing that, I want nothing further to do with these guys.

I passed all my modules for Uni last year so I'm just going to keep focussing on my end goal.

This client is very demanding, extremely aggressive on the phone and harasses me to the point where he'll call me at like 6pm even though I was there that day because something isn't working and when I get there its either an employee or something silly because of loadshedding but either way they want things sorted out the same day and if not then next day, they look at me as a patsy because I'm young and find it very difficult to say no to people. I regret the day I ever got involved with them.

I much preferred when I was focused on providing a service to individuals, I made more money and didn't have like 20 people asking me to help them with **** I wasn't even initially requested to do and for some reason Management decided to give my number to your average Joe Soap asking to assist them with random k*k.

I'm really thinking of just getting a new number after all this over.

I felt like I was doing so well when I left that retail job only to walk into this then again maybe this is the path I am meant to go down in order to learn from the mistakes I've made.

 

[Random717]

Sounds like it's time to raise your prices and limit your available hours, as your studies are more important. They'll quickly get more organised on their side about who should be calling you, and what is actually important enough to be paying you to fix. Also ease off on the within 1 hour response times.
I had a similar sounding client that still kept calling me 8 years after I first did some work for them, despite me quadrupling prices and taking days to respond sometimes. They even sent their driver around to collect me a few times, though it was only 7km away.

 

[RedViking]

I don't like it. They want to pay you less. Walk away. Even better, look for more clients. If you desperate and they say, well, either you accept our lower offer or we find someone else (which will probably cost them more), you don't have a choice anyways.

Sounds to me like a lot of work and something that will have to be ongoing. Also sounds to me like something you can be very successful in offering to more clients at a higher hourly rate.

But then again, what do I know, I am just gatvol of cheap labour and companies looking at paying as little as possible getting as much as possible. I do know if you don't have many choices, you take what you get and work towards something better.

 

[TheMightyQuin]

Yep I've done the math, they would need to offer me nothing less than R10k per month in order to make it worth my while without being greedy. This is based on data going back about 6 months and averaged out.

Whenever they request me to do work I bill them for it but I've only recently been charging them correctly and that's where the k*k started with a retainer because they realised I'm starting to charge them standard price.
Keep in mind I have never had a proper business as a client, I'm very new to the business side and they saw an opportunity to take advantage of that.

Yeah that's how I calculated it, otherwise if an employee doesn't want to work they can just unplug something, wouldn't be the first time its happened.

I've had 3 other people tell me that, say no more.


Yeah I thought it about it, definitely not doing that, I want nothing further to do with these guys.

I passed all my modules for Uni last year so I'm just going to keep focussing on my end goal.

This client is very demanding, extremely aggressive on the phone and harasses me to the point where he'll call me at like 6pm even though I was there that day because something isn't working and when I get there its either an employee or something silly because of loadshedding but either way they want things sorted out the same day and if not then next day, they look at me as a patsy because I'm young and find it very difficult to say no to people. I regret the day I ever got involved with them.

I much preferred when I was focused on providing a service to individuals, I made more money and didn't have like 20 people asking me to help them with **** I wasn't even initially requested to do and for some reason Management decided to give my number to your average Joe Soap asking to assist them with random k*k.

I'm really thinking of just getting a new number after all this over.

I felt like I was doing so well when I left that retail job only to walk into this then again maybe this is the path I am meant to go down in order to learn from the mistakes I've made.

The most most important question: are they "good" payers?

Meaning: do they pay every bill you send them on time and in full?

If they do, then you only need to bill correctly and sit back.

If NOT, tell them to fuk off.

Also, depending on how complicated their systems are, it is NOT always that simple just to change IT service providers.

It sounds in your post as if you are NOT dependent on these guys, so that does put you in the driving seat.

Offer them a retainer ( NOT and SLA) that is in YOUR favor.

Limited hours, strictly 8:30 am to 16:30pm.

Payment Up Front for the month via DO only.

I learned these things over 21 years of building an IT company from nothing, so let me save you some headaches....

 

[IssiAmd]

The most most important question: are they "good" payers?

Meaning: do they pay every bill you send them on time and in full?

If they do, then you only need to bill correctly and sit back.

If NOT, tell them to fuk off.

Also, depending on how complicated their systems are, it is NOT always that simple just to change IT service providers.

It sounds in your post as if you are NOT dependent on these guys, so that does put you in the driving seat.

Offer them a retainer ( NOT and SLA) that is in YOUR favor.

Limited hours, strictly 8:30 am to 16:30pm.

Payment Up Front for the month via DO only.

I learned these things over 21 years of building an IT company from nothing, so let me save you some headaches....

Agree here
If they're good payers then just bill them for all their employee's kak.
Charge a rate you're happy with and if they're paying then happiness, don't worry too much about their attitude.

As advised cap your support hours, any work after hours will be billed separately at a premium rate.
Again if they pay, happiness.

 

[kingmilo]

A lot of interesting advice here.

You have a great learning opportunity here as you’ve probably already realized. This may be a big turning point in your career as you might stumble into starting your own business.

You are going to need a contract with a service level agreement.
The SLA should stipulate your response time (I would recommend 4 hours, during working hours), as well as the retainer (take your average monthly income from the customer and deduct 20%), along with a limit of hours per month after which you charge an hourly fee which you stipulate.

What is happening here is very normal, it’s a negotiation and the essence of doing business.

My only concern is that you need to establish boundaries from the start with your customers. Always have a work phone so that you can switch it off/send to voicemail after hours. Decide how much abuse you are willing to deal with vs how much the money and your time means to you. I personally don’t tolerate abusive customers, but then again I have the luxury of letting them go if they are nasty.

We do all have to eat **** from time to time though.

Best of luck! It sounds like you have an interesting and exciting time ahead of you

 

[TheMightyQuin]

A lot of interesting advice here.

You have a great learning opportunity here as you’ve probably already realized. This may be a big turning point in your career as you might stumble into starting your own business.

You are going to need a contract with a service level agreement.
The SLA should stipulate your response time (I would recommend 4 hours, during working hours), as well as the retainer (take your average monthly income from the customer and deduct 20%), along with a limit of hours per month after which you charge an hourly fee which you stipulate.

What is happening here is very normal, it’s a negotiation and the essence of doing business.

My only concern is that you need to establish boundaries from the start with your customers. Always have a work phone so that you can switch it off/send to voicemail after hours. Decide how much abuse you are willing to deal with vs how much the money and your time means to you. I personally don’t tolerate abusive customers, but then again I have the luxury of letting them go if they are nasty.

We do all have to eat **** from time to time though.

Best of luck! It sounds like you have an interesting and exciting time ahead of you

I agree with everything here...EXCEPT the SLA part.

You have an SLA with a client, when you have a team of techies, NOT when you are a one-man-show.

 

[Zurg]

The most most important question: are they "good" payers?

Meaning: do they pay every bill you send them on time and in full?

If they do, then you only need to bill correctly and sit back.

If NOT, tell them to fuk off.

Also, depending on how complicated their systems are, it is NOT always that simple just to change IT service providers.

It sounds in your post as if you are NOT dependent on these guys, so that does put you in the driving seat.

Offer them a retainer ( NOT and SLA) that is in YOUR favor.

Limited hours, strictly 8:30 am to 16:30pm.

Payment Up Front for the month via DO only.

I learned these things over 21 years of building an IT company from nothing, so let me save you some headaches....

Let me clarify some things, I am not dependant on the money, what I do make is for fuel, chipping in on the internet bill etc and if I want to go out.

Some may say that's privileged and yes maybe it is, the point is that this company doesn't respect me, I can't reveal anymore info because I'm still finishing up some things and wouldn't things to turn nasty.

The reason why I started this company was to learn and make something some cash along the way, for the first year (more like 6 months) including equipment I managed to generate about R100k which is double what I made when I was working retail.

In the beginning it was costing me everytime they have an issue because the family vehicle I'm using is heavy on fuel so everytime I used to go to their premises would cost me 100 bucks.

 

[RedViking]

Let me clarify some things, I am not dependant on the money, what I do make is for fuel, chipping in on the internet bill etc and if I want to go out.

Some may say that's privileged and yes maybe it is, the point is that this company doesn't respect me, I can't reveal anymore info because I'm still finishing up some things and wouldn't things to turn nasty.

The reason why I started this company was to learn and make something some cash along the way, for the first year (more like 6 months) including equipment I managed to generate about R100k which is double what I made when I was working retail.

In the beginning it was costing me everytime they have an issue because the family vehicle I'm using is heavy on fuel so everytime I used to go to their premises would cost me 100 bucks.

In that case, I would definitely find more Clients and take the risk and keep the rates the same, with some increase over a year. Also see if you can do more stuff remotely with less driving.

 

[xodosman123]

My advice would be, do what you want as everyone will have a different opinion if you listen to the advice you are basically following what other people want you to do. I never listen to anyone, That is how I built my various companies... You basically have to have the drive and need to follow your instincts, If I had listened to all the advice I would simply be at home afraid of what would be.