IT Consulting Pricing help needed

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deca300

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Hi Everyone,

Not sure if I'm posting in the wrong forum here.
I have started a new IT Consulting company in Port Elizabeth.
I have two new clients now,
a - school = 2 servers, 120 Computers.
b - Law firm with 20 PC's and 1 server.

I'm am going to do like 1 - 2 visits onsite per week... Plus do remote support.
Monitor systems, do backups etc...

What more or less do I charge for this?
Or how do I calculate this?
Any help appreciated :)
 
You started a new IT company AND got 2 clients...but you do not know what to charge them for your work?? Just when I thought I've heard it all. What did you quote your new clients when you approached them for these contracts?
 
MightyQuin said:
You started a new IT company AND got 2 clients...but you do not know what to charge them for your work?? Just when I thought I've heard it all. What did you quote your new clients when you approached them for these contracts?
Click to expand...

Just what I was thinking.
 
well yes... the school I made 15k per month and the law firm R4500... I just want to know if its a decent price what would you say?
 
deca300 said:
Hi Everyone,

Not sure if I'm posting in the wrong forum here.
I have started a new IT Consulting company in Port Elizabeth.
I have two new clients now,
a - school = 2 servers, 120 Computers.
b - Law firm with 20 PC's and 1 server.

I'm am going to do like 1 - 2 visits onsite per week... Plus do remote support.
Monitor systems, do backups etc...

What more or less do I charge for this?
Or how do I calculate this?
Any help appreciated :)
Click to expand...

Your operating costs vs time needed might be a good way to start - charge more than it will cost you to deliver the service (including your salary). It really depends on the systems they employ and how well you can lock down the machines to stop problems.

Perhaps look at a basic fee plus a per device rate.

Good luck!
 
You'll need to work out your fixed costs + variable costs. Then you'll have to calculate the contribution per consultation hour for your breakeven level. Then set a desired profit target and adjust your contribution p/h.
 
Bern and mass09 thanks a lot for the reply... wont say the same to the rest.. anyway I'm working something out thanks a lot!
 
I charge 350/hr provided it is straightforward stuff. My clients did show me an estimate from another lot charging 250/hr so I said go for it. They didn't. It is a bit of a minefield because there will always be under-cutters and franchises to compete with but I told them they should consider their hourly rate and decide why mine should be less. Ask your lawyers how much they charge per hour and prepare yourself for a shock. If I wasn't thirsty, I'd go to 500/hr. Check out Dial-A-Nerd's rates, which vary per task.

http://www.dialanerd.co.za/AtHome/Rates.aspx

Considering their rates and that mine are whatever is involved, I feel I am charging a fair, if not reasonable, price.
 
Interesting, I charge R450.00 an hour, usually on a monthly contract. I believe that that is a reasonable rate based on my experience.
 
Electron1 said:
Interesting, I charge R450.00 an hour, usually on a monthly contract. I believe that that is a reasonable rate based on my experience.
Click to expand...

You're right - it is fair. And if anyone wants to undercut you, let them have the headache. I find that they aalways come back after the inevitable bad experience.

Time to up my rate to R400 (petrol, troll roads, liquor price increases)
 
So at R400.00ph - he should be giving the school 9 hours per week?

I'm guessing he isn't - so he's making a healthy profit?

EDIT : I'm assuming an onsite visit is a few hours to check all is working
 
Dolby said:
So at R400.00ph - he should be giving the school 9 hours per week?

I'm guessing he isn't - so he's making a healthy profit?

EDIT : I'm assuming an onsite visit is a few hours to check all is working
Click to expand...

I believe if you have a customer on a monthly contract, you should be giving them the hours they pay for, however that does include remote support. the big problem is that it is a balancing act as you do not always know when they may need you. What I do is try to do a weekly visit, and then at the end of the month if the hours are not used up, i do preventative maintenance - btw this is usually done remotely after hours.
 
The OP clearly is asking what rate he should charge because he might be afraid of charging too little or too much? No need to jump down his throat because he is asking a simple question. He is obviously a new business owner and he is just checking if he is doing the right thing.

Here is a few things to consider when you set your fees:
1. Your break even ratio. How much do you need to charge to break even? If you want to know how to do this calculation send me a pm or email and I will mail you some stuff
2. Pricing of your competitors. Look at the lowest and highest priced competitors. Never charge too little or your clients will ask why are you so cheap, and never price too high until you have made a name for yourself. I recommend that you consider your value proposition and price accordingly.
3. Value proposition. Consider and decide on your value proposition (quality or service or pricing etc.). Price according to it.
4. Expertise. Exactly how good are you? Are you of average experience and skill? Then charge average. Same is true for higher and lower levels of skill.
5. Income goals. You know how much you want to earn, and that should be reflected in your fee.

As always, you can pm or email me with more detailed questions. I dont charge if it is all via email :D
 
No one is jumping down his throat - it's pure curiosity.

If I say to you that I sell TVs at R5,000.00 each but I have no idea what I even buy them for, you're also going to ask how I got to the selling price if I'm not sure? That's all
 
Another reason smaller start ups should also charge less is your overheads tend to be lower - no large office and staff to take care of.

One thing I can suggest is be very careful about trying to win business by promising you will ensure everything works no matter what as you can end up working 20 hrs a day to just keep their systems usable. This normally happens when your client has really crappy hardware, has loads of junk software and won't let you lock the machines down properly. Don't create a reason for them to not want to invest in their IT infrastructure because you will have to keep it alive due to your SLA...

I think if you are starting out you should go with a reasonable (but competitive) hourly rate "prepaid" for the initial stage to gauge the work required - be open to your client about this. You don't know their environment and it will be a learning curve for both of you to figure out the best price/service mix. It also stops ridiculous requests which are likely on an unlimited support option - otherwise it would be better they hire a full time IT guy.

Make sure you have solid remote support access (SECURE!!) - it will make your support turnaround times MUCH faster. Also a simple monitoring service is maybe not a bade idea as well as a backup remote access option (in case its the connectivity that is down.

If you would like more detailed suggestions PM me.
 
deca300 said:
Bern and mass09 thanks a lot for the reply... wont say the same to the rest.. anyway I'm working something out thanks a lot!
Click to expand...

If you gave ALL the info in your original post i.e. mentioned what you are charging, my response would opbviously have been completely different. You are overcharging the school by quite a bit I think, but if they are willing to pay that, go for it.

We charge R395 per hour for basic support and R495 per hour for server related work.
 
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