1

Ive been contacted by a local company asking me to install a new server in their office, in addition to a few other small projects. I am in IT but haven’t done anything outside of my employer other than small jobs for friends and such.

The gist of it is that a local consulting firm gave them a quote for the job and I said I could do it and save them a good bit of money. I have no problem with the job, what Im unsure of is how to structure my price. I initially said I could do it for about $XXX.XX. Should I just charge that price or should I define an hourly rate? If so, what is the going rate for a consultant? This would include probably 10 hours of so of time and some driving, though not a huge amount.

12 Spice ups
2

Whatever you charge, put in enough so when things go wrong you are not working for free.

3 Spice ups
3

Most consultants seem to charge a set rate per hour, plus the cost of materials. That rate should vary geographically and based on your experience or the level of difficulty for the job, but we usually pay somewhere between $80 to $100 per hour for IT consultants.

3 Spice ups
4

My recommendation is to charge what you feel your time is worth without going to overboard. Typically I would charge a flat rate for the installation provided I was able to do a site inspection and had a good idea what was involved with the installation. Then I would set the expectation that only included the installation and making sure the users could connect and access data and printers, etc. If they needed anything beyond that it was an hourly charge. That way you will not be taken advantage of or feel obligated to continue to support for free after what you promised to do was completed. Good luck with your installation and let us know how it went.

5

Time and materials. Boston area about $100/hr. Though they’ll have sticker shock if you don’t give them some type of estimate. Nothing worse than handing them a $1200 when they thought it would be 4 hours.

6

I’d like to do what all my physician clients do. charge an absolutely outrageous amount, let the insurance company decide what they would like to pay, then write off the balance.

they write off moremoney then they make… must be some kind of tax scam

7

Have you already quoted them a price? A flat rate works as long as you don’t run into snags. And as others have pointed out, depends on what region you are in. Also you need to figure in post install support. Nothing worse than quoting a low price and having the client nickel and dime you later with a ton of questions

1 Spice up
8

I verbally quoted a price of $1000, which was half of what the consulting firm wanted. I think that should easily cover my time as this is going to be a pretty simple project. What I was worried about was whether I should break it out hourly or stick with that. I received a response this morning that a flat rate was ok.

As far as support goes, you are correct…that was a concern of mine. My hope is to make it as easy as possible to administer and will write up some documentation on adding users/folders. The girl I am dealing with is pretty sharp, I worked with her previously for 10 years.

9

I would like to add that flat rates are fine if you do it wisely. Make sure to over estimate your time. If you think it will take 3 hrs then put 5 in the quote. Maybe even put 5 hrs in the quote but state that you’ll only charge them the actual amount of time if it’s less. Something like that. Be reasonable! Don’t charge them 5 hrs if it only ends of taking you 1. The other 4 hours give you some flexibility to not loose money if things go wrong.

The key is to have a very well defined scope of work. That way when they start asking you to do 10 other things or they are not ready when you show up or anything else that basically wastes your time and thus your money, you have something to point them back to when it shows up on their bill.

We have a SOW that is very detailed about what is and isn’t covered for the install. We don’t always enforce everything in the SOW. Depending on the customer, how they behave and how much money is at stake we have many options to make sure we don’t loose money.

In our experience, good clients will not be dissuaded by a good SOW. Bad clients will whine and complain because they really want something for nothing and you’ve now made it hard for them to get that. After reading the SOW they will try to turn it around on you that you want to nickle and dime them. Which in reality is what they want to do to you. I simply tell them that “this is in place to protect both you and I from potential disagreements and misunderstandings. If there is anything you would like to add or remove we can discuss it before you sign the agreement.” Although we very rarely change our SOW, we have done so for reasonable people that have a reasonable explanation ask to why they don’t want to sign it.

Verify short list of things to include

  1. What your rates are outside of the fixed price both during business hours and after hours.

  2. What is not included.

For example we always say something like this for software installs “Any costs associated to gain additional features or support of the software not currently licensed will be the responsibility of the Customer. If additional support is required beyond the items listed in the SOW it will be billed on a time and materials basis.”

Something like “This is a new software installation only. No training is included in this installation.”

Because installing quickbooks is not the same as showing someone how to enter all of their transactions into quickbooks".

  1. What is included.

Just saying you’re going to Install a server is not enough. Something like “Installing one(1) user provided, legally licensed Windows 2008 R2 Standard Server on one(1) customer supplied server as a 2nd domain controller. Identification and availability of a server meeting recommended guidelines is the responsibility of the Customer. If additional support is required beyond items listed in the SOW it will be billed on a time and materials basis.” In this case you can charge more money if they need your help deciding which server to put it on. Maybe they even need a new one. Don’t do it for free.

Remember that you don’t have to charge for everything extra but you can if they become a pain or start asking for things way outside the of SOW.

Bottom line, people will take, take take if you let them! Always protect yourself and provide value for your customers and you’ll be fine.

Good luck.

1 Spice up
10

If you quote them 5 hours to do the work, you should charge them for 5 hours. If you finish it sooner, you should still charge the 5 hours and the same if you finish it over budget. It’s a case of protecting both sides by putting in your best accurate quotation based on having the experience previously to be able to do so.

The idea of charging less if the job takes less time is generous, as long as the client is prepared to be charged more if the job takes longer. It’s a case of give and take in these situations, and in this case your ‘quotation’ becomes an ‘estimate’ in terms of contract law.

We quote for work and stick to the quote regardless. We pay highly for our engineers time in terms of employment contract for a 40 hour week, and we have to pay them if they work or not. The fact that we are able to perform our work quickly and efficiently is down to employing the right calibre of person and the experience over 20+ years of being in the industry.

On a final note. Be careful of ‘moonlighting’. If you are performing a service outside your employment that your employer pays you to do whilst working for him, and your company that employs you also offers that service, you are in affect in direct competition with them. Your employer gives you financial security by paying you a salary, and worrying about finding enough work for you to feed off, so you would/should have a moral obligation to feed into the pot by introducing that work to the company you work for.

If one of our engineers was performing his duties outside of hours to further his own gains, when it comes to him asking for a pay rise, he’ll be shown the door!!!