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For those of you who freelance or a full time IT consultant, how much do you charge for your IT services? I’m thinking about doing some on the side work that might/could potentially lead into me breaking out of my job.

More specifically, how much would you charge to do a remote session with a client showing them how they can use their computer better?

Any and all help is greatly appreciated!

Thanks,

Scott Lucas

20 Spice ups
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It depends on your competition as well as what you feel comfortable charging while still making a living for yourself.

I have charged anything between £20-£50 per hour in the past (depending on work requested), which doesn’t help you in the slightest, but it will be the same for most replies, as location and competition will play a huge factor in what is deemed acceptable.

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Mr. Lucas,
please allow me to share with you the benefit of my self employed experience.

  1. You need to make sure you have a financial advisor to help you best manage your money both personally and professionally. Going on your own or as you say breaking away from your job to go on your own is a risky and dangerous decision without a strong financial protection plan in place. There are start up cost even if you are operating out of your home, and even more if you decide to operate out of a leased or rented brick and mortar building.

Thing to consider building insurance, business licences fee’s cost of registering with the franchise tax board if you plan on being a reseller of hardware which is a given in the IT support and service arena, business cards, and flyers so on and so forth.

In my experience starting from my home and having to move into an actual office as my client base began to grow I found out that I was in need of more money as I expanded so I registered with various IT staffing firms to make additional money to help pay my overhead of running a business and to pay bills. WHY you ask, good question there are various times during the year when residential and commercial clients will not be able to spend money on IT services until the very last minute due to Tax season, or Holidays, or employee vacation seasons all of which hit randomly and regularly. During these times you will need to be sitting on a very large cash reserve to help pay bills during these times, and in my case to keep earning money to keep the bank account filled as much as possible and it also helps me when during the times when there is absolutely nothing going on at my office when service call request are absolutely dead and this happens.

My advice to you is while you still have a career take a long hard look at what you want to do, devise a solid business plan, if you have not gotten one yet hire a financial advisor share with them what your plans for the immediate and distant future, put at least $50,000.00 away to help you start up your business, one other thing if your employer finds out you are starting up your business they may state a conflict of interest on part of the company and let you go which legally they can do to protect their interest. And most importantly find yourself a business mentor, take collage courses on business administration and management so you have a familiarity with how to run, manage, and operate your business, and subscribe to business journals, magazines online business blogs or vlogs, and the wall street journal in order to help navigate the uncertain economy we are living in.

One last thing I cannot stress enough. Moving away from being an employee to being self employed is an All or Nothing decision that cannot be taken lightly. Either you commit 100% of yourself to making your business plan work or you stay employed working for someone else this is a decision that is not for the faint of heart. Many many great business owners have made a strong go of it the first time around, and quite a few have had many start up failures before they found strong footing, and a great deal of those whom have tried to make a go of starting their own business have failed and given up completely with some even going bankrupt. Sir you asked for advice I am giving you the hard facts because myself and other successful business owners all have one thing in common we have all faced the adverse reality of starting a business and it has been difficult as well as painful personally.

Regarding how much I charge for remote desktop service if and when I do perform such a service it is for established clients most of whom retain my services annually. The remote desktop services are built into the annual rate. For those not on retainer and are potentially new clients I do not charge I consider it a try before you buy in hopes of landing a new client.

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Compare prices with between your competitors and then lower your prices to gain business. Once you have a well established reputation then rise your prices to match the competition. Always offer more than they do.

For teaching your customers you may want to charge in 15 min blocks. If you want, you can sell the time blocks in bulk in advance at a discounted rate. Then when ever the customer wants a lesson they can schedule a day and time with you.

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Never ask how much someone else charges. Everyones fees are different and you are focusing to much on the cost.

You want clients that will pay your rate. Not who ever is cheaper.

Better to ask is how much you need to make while covering your expenses? How much do you need to survive? What are people wiling to pay in your area?

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Relevant Thread:

http://community.spiceworks.com/topic/479153-the-pros-and-cons-of-owning-your-own-business

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Charge your clients enough to cover your overhead (only you know what that is) plus what you feel your work is worth in your marketplace. If you can’t cover your overhead and make a profit off of every hour you work… then it is not worth it.

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I’m guessing you aren’t currently charging a proper rate if at all?

Surprising to find that once you go it alone and have to charge a proper rate that this work which caused you to make the break from employee to boss disappears.

When deciding on a rate (as others have mentioned) you have build in your outgoings, fuel costs, insurances, living costs etc. This rate, in part, also has to cover those times when you don’t have any work or you spend time working on a proposal just in the hope of getting work.

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Berrick,
very good reply, it is amazing how many so called I want to be self employed change their mind once they actually sit down and do the math, and talk with others that have been in business over the first five year mark have to say. Your comment hits the nail on the head directly and spot on in short.

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In addition to spicing everything said so far, I’ll toss in the “Rule of Thirds”:

  • 1/3 pays you. Don’t forget to pay yourself FIRST.

  • 1/3 of what the business’s gross income goes to covering business expenses.

  • 1/3 goes back to the business for operating capital. This will become critical down the road. You’ll need cash reserves to expand, cover unexpected costs, etc.

Use this rule when deciding your rate.

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Different clients have different expectations, and can pay different rates. The non-profit working out of an old house is not going to be able to pay what your top accounting or law firm will. As mentioned above - you need to talk to a professional about taxes & structure.

But to answer your question $40/hr is a fair rate for remote training.

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I’ll echo Bryce’s statement here and add that you’ll need to balance your price with need for business growth. If you enter the market with too high of a price, be prepared for slower growth (though, you will be attracting the right kind of clients and won’t have to raise your price later, which is better in the long-term). A lower price will allow you to attract a higher volume of clientele, but will necessitate a price hike later on, which can be a turn-off (but can also be an effective way to weed out clients who aren’t helpful to your long-term growth).

Lastly, find out who your competition is. If you’re just up against the Geek Squad & Craigslist (I assume you’re just doing residential services, from your OP), you can make your prices fairly high if you can push your value statement well enough (that goes for any market, but is more true with very disparate competition like this example). If there are plenty of competing services, you’ll have to do something unique to separate yourself from the pack. You may want to consult a marketing professional to analyze your local market and help you develop an effective and unique brand.

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This is a great rule of thumb, I do alot of side work as well tho not in IT, and follow a similar model.

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Figure out how much the solution is worth and charge that. If it’s virus removal for a home user, you have to consider your competition since one shop can probably do it as well as another.

If it’s more complicated stuff figure out how much money it will save them if you show them a different way, and make sure you can make a good business case for the project. Then you can charge what you want. They come out ahead and you come out ahead.

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Take a look at Jon Acuff’s book “Quitter.”

That helped me a ton.

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Few other considerations…

If you go out on your own, be sure to get professional liability insurance - this covers you when you possibly break something of theirs, write a program that horks something, or do something on a server that kills something critical and costs the client money. Personally, I’m insured for $1,000,000 because some of the clients I work with are multi-million dollar organizations per year. It isn’t too expensive for the peace of mind it offers. If you own your own business and have an accident you’re liable for, this might be the difference between you and bankruptcy.

Figure out what market you’re targeting. Business clients will generally pay a bit more if your skills and quality of labor are where they expect/need them to be. Consumer (home users) clients are generally looking for a better price/deal since they don’t always know what level of skills/quality of labor to look for.

Everything people said about the 1/3 rules, keeping a cash reserve, all are good things. IT is a cyclical industry in terms of when businesses/people spend money based on fiscal years and tax returns, etc. You don’t want to go too long without actually earning a paycheck.

If you do things by the job, be sure to have a scope of work lined out prior to beginning the job. You want a clear understanding between you and the client as to what is expected of you to do and what qualifies as a milestones or a completed job. Any changes to that would constitute a “additional/change” and would need to be negotiated above and beyond the pricing for the original scope of work.

If it’s a small startup that doesn’t need an actual office space, just work out of your home. Designate one room in your house that is purely for work and only for work. This will allow you to write off that space on taxes or if you do well enough, your business can “rent” that space for a reasonable amount of money. It’s better to keep your overhead as low as possible for a good while.

Consider getting a payroll company to do the payroll, even if it’s for just you. They will figure up and deal with the taxes. You just approve the amounts and hand over the money. That tax burden is then off of you.

Anyway, this was more than I intended to write, but all very valid points that I learned owning my own IT company and now working for another.

Best of luck to you!

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puts pinky to lips 1 MILLION DOLLARS! maniacal laugh

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In the southeast region of the US, i would not go below $50/hr.

As a counterpoint: I was self employed IT for a decade, and I could not be happier to be back in a 9-5, regular office IT job. Checks don’t bounce, no hustling for new business, regular hours, regular pay, blah blah… basically, make sure you are going to enjoy the day-to-day running your own business BS. I hated it. Taxes, insurance, licensing, advertising… so much non-IT stuff to keep track of. I personally like to fix sh*t, not do paperwork. Be sure you consider this angle as well. If you enjoy/can tolerate the business administration, then go for it full throttle.

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One other thing I meant to add… This is something I learned right away from a seminar I went to when I first opened my business. MAINTAIN YOUR PRICE INTEGRITY.

What this means is determine and set a price per hour that is fair to everyone. Stick to this price per hour. Any invoice should list this amount. If you ever choose to not bill someone as that per hour, you still use that price. Just discount the labor or don’t bill as many hours on the invoice.

For example: You set your price per hour to be $75. You then work three hours on a project for Billy Bob. You feel like charging him $225 would be a bit more than Billy would stomach/be okay with and would rather charge him $150.

Do not do this:

Labor…3 hrs…@ $50/hr…= $150.00

If you do that, people will wonder why it’s $50/hr one time and $75/hr another time. This is a “bad” thing, cause then they feel like they are getting screwed - whether that’s reality or not, it’s the perception that matters.

Put it on the invoice something like:

Labor…2 hrs…@ $75/hr…= $150.00

or

Labor…2 hrs…@ $75/hr…Discount: $0.00/hr…= $150.00

Labor - Unbilled…1 hrs…@ $75/hr…Discount: $75.00/hr…= $0.00

Personally, I do the latter for two reasons. 1) I want the client to know I was there for 3 hours, not 2 hours. 2) I want them to know they have saved money. I want it on the invoice clearly. This also allows me to point out to them at the end of a year how much they’ve saved working with me. The perception is clear that they have saved money, and they are generally happier, purely because of that perception, even though both examples are billing for the same amount.

Another thing to consider is if you’re going on-site to clients, charging them a Trip Fee to cover gas, wear and tear on the car, and your drive time. Most businesses are used to paying for things like this. This price should basically cover your costs and is generally not a money maker. My boss has set prices for set distances, 0-25 miles $36.50, 25-50 miles $55.50, etc. This is for all clients, whether they are 1 mile away or 25 miles. The cost averages out over time.

By the same rationale as above, maintain your trip fee pricing integrity. You can comp trip fees similar to above. That way they know how many times you were on-site and that they are saving money.

Hopefully all that is clear, if not, you’re welcome to message me directly for clarification. :slight_smile:

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a little bit less than your closest comparative competition