1

What is your rate?

I’m just curious what others charge for services not included in their standard offering.

I ask, because the other day a company asked me to fix a licensing problem. After I got there, I quickly found that 6 desktops had pirated copies of Windows and Office, and the 2 servers were running eval versions of Server 2003 Ent and Exchange Server 2003 Ent, both of which would be expiring in a couple of weeks. Due to the nature of the work (to be done on evenings and weekends) I quoted a conservative price of $160/hr for about 20 hrs of work.

I was laughed out of his office :frowning: I’ll get the last laugh when his network shuts down. Of course I explained what was entailed (backing up all data on the desktops and servers and basically rebuilding them, but he thought I was scamming him because I should only have to edit a .dll file to fix it. I don’t know where he got that idea from, be he said it should only take me 5 minutes to fix and he didn’t know where the .dll file was.

So, what would you have charged for a week of nights and weekend work?

6 Spice ups
2

The last counsulting company I worked for charged a similar amount (150-160) for the kind of work you are describing. This was about a year ago, so i think its still valid.

If it was after hours, I would have asked for more. The $160 would get you a 9-5 type of window. After hours was at time and a half ($225 range) and good clients will understand.

The only time we reduced the rate was for much longer engagements.

I think your rate is reasonable, but I dont know what market your in so that may have some influence.

To tell you the truth, if that guys is not willing to pay for quality professional work, I wouldn’t want him as a client.

HTH, and Good Luck.

Ohh and you should send the SBA his address, they can help him with his licensing issues! ha!

3

Forget the rates this client wants, forget the client. If he has this attitude to licencing what is his attitude going to be towards paying your overdue bill. There are plenty of customers out there that understand the value of IT to their business and are willing to pay a fair rate. This customer is obviously not one of those.

4

As far as your rate is concerned for out of hours and weekend work you’re coming in a little cheap (in the UK at least).

On the other hand the guy you were dealing with had a point (although he was a little off track). The eval editions of Server can be updated to the full version pretty easily without much downtime.

The Office and XP installations are easy to fix too. Office has a reg key that you can modify that prompts you to entry the prod key again. Do that and you can enter the legit key (once you’ve bought it) providing they’re the same versions. Same is the case with XP.

Hope this helps for the future.

5

I had a similar situation about a year ago! They were willing to pay my rate and I could do the work during 9-5 business hours at $150, so yes, your rate for after hours work is extremely low.

However, I decided because they had the attitude of why do we need licensing and things of that nature, it wouldn’t be in my interest to pursue them as a client because, on top of my rate, which was the only thing they were looking at, they would have to pay licensing fees, and of course being hit with two bills as large as those, they probably wouldn’t want to pay them after the work was done. So, I asked for a deposit of 50% of the proposed work and that’s when it became real to them and they said they would think about it, haven’t heard from them, but I have heard they just purchased new workstation machines and the license came with it, which of course was one of my recommendations, they got that bit for free!

I had another instance like that with an Embassy, they never paid for my work to do an RFP for them and they had tons of licensing issues on top of old machines, etc, etc…

I say when someone has these issues, never do an onsight visit first and waste your time. Ask them over the phone these several questions:

  1. How do you know you are not complient?

  2. Do you have a budget to fix this problem?

  3. What made you want to become complient?

  4. What is your time frame for doing so?

  5. What other projects to you have planned to see if some of the problems

can be resolved this way?

  1. Evaluations of your situation are free if you decide to give us the work, however you must first pay X dollars, which will then be subtracted from the final bill, would you like me to come in and do the evaluation?
6

I have had two consultant companies in, over the years, and both charged for the evaluation. Not taken off the next bill, but pay this for the network eval and then we can go from there.

I wouldn’t do this now, but at the time it was acceptable.

For me, looking at side jobs, yes I’d do it as eclecTech suggests.

7

Greetings.

Our current rate is $85 per hour. This is for just about anything we do. Next year this may change to a $95 per hour, for new clients, but i have not had the time to do more research on the matter. When i do this, i will need to figure out how to grandfather all of our clients into whatever new price we decide to go with. Services which may cost more are data recovery, special immediate response services, and various research services.

When i started the company, the approximate local rate was something like $120 - $200 per hour. I needed an instant edge over everyone else, so i priced our services out at $65 per hour. Looking back, i think i was crazy, but at the same time, i am not sure i would have as many clients as i do if i had higher rates. Now that we are more than just me, i have to pay close attention to our price structure.

One thing i have noticed is that because our rates are so low, we are a nearly perfect solution for other consultants (our competitors) to have us handle their clients. This has worked fairly well, financially, but i do not like being so limited. A few of our “partners” / competitors are cool and give us more free reign.

A buddy of mine was recently telling me i needed to raise our prices, but again, i really need to just take some time and figure out a solid strategy for our business so we can achieve our goals.

Apart from just seeing what other people are charging in your area(s), why did you choose the rate(s) you have?

8

Mr. Odom,

Well, I called a few of my competitors and asked a them for an hourly rate quote . They all seemed to be between $160/hr to $200/hr. That seems expensive to me…I was really expecting something in the range you are talking about. As I started getting new clients, I found most businesses (above 10 or 15 employees), had no problem with my rates. The smaller ones want everything and they want it for $8/hr to $10/hr, sometimes I can’t help but laugh.

Anyone else have similar experience?

9

Greetings.

The Chris, most of my clients realize that the chances of them finding someone to who knows as much as we do and who will beat our prices is pretty much behind their chances of winning the next big lottery. So, they usually do not complain about our prices. HOWEVER, some clients are simply hurting, and they just tell me to keep my time down to a bare minimum, basically enough to keep them above water. They realize, because i tell them, that if they get hit with just about anything they may sink. But when money is tight, they do not have a lot of options.

Some of our clients have tried being stingy, but we usually just slap them around a bit, preferably after duct taping them to a hot server rack or such …

10

I don’t compromise on rate and I’m not the cheapest but I’m not the most expensive. I’m priced fair for the professional services I offer.

I learned not to worry about other folks money the hard way, by almost loosing a contract. They told me I wasn’t doing enough and I didn’t respond to their calls and all these things were not really visible billing hours, they started to learn and then call me on the phone to get the help and not really want to pay because they, “just had a simple question”. So I told them, it is really difficult to do the things you’ll need done with the restriction of money.

So be it, they looked into getting another contract that would allow them to get a response. So, I did find out about it at the last minute and I know the level of service they need and the cost it should be, so I sent in my proposal as well, did care what the competitions price was. I came in $700 higher than the competition on a monthly basis, but offered a little more services that would cost me about $100 additonal a month myself. Guess what?

They told me don’t worry about their money, let them worry about it, just get the job done and they wanted to go with my proposal!

So it really isn’t about being cheapest and working yourself to death, some people don’t like cheap either.

Figure out what you want in terms of income and how much your company can support to bring that in. I don’t think $85 or even $95 is priced cheaped to be honest, it is reasonable, but that depends on what you are supporting for that cost. It also seems like a break-fix per hour model that is slowly loosing ground in todays IT services market. Also, with hourly billing it has a lot of overhead associated with it that you really don’t realize until you analyze it more closely. So Odom, I think if you are going to stay with the break-fix model you may want to increase your rates to cover some of the outsourced automation cost that you are soon to incur because you want to compete. This will also give you a great opporutnity to take on more clients with less overhead!

I have another discussion posted that is somewhat in line with this but not completly so take a look there all and post some comments there if you wish!

http://community.spiceworks.com/topic/19308

and another

http://community.spiceworks.com/topic/19733

11

You should not consider providing services in an environment that is participating in questionable licensing practices and then having actually trying to get some legitimate technical support to resolve issues… In reality, if you are a Microsoft Partner, etc., you might be obligated to report them, at the very least, they are on their own… Move on to the next customer…

12

Hello All,
Some very good points here especially by Odom & elecTech; just to through my two cents in…
I worked for a field service organization in the Bay Area for about three years starting back in 97. They started out with a price structure something like this:
For 1 year contract (paid 50% up front) for 80 hours, the client got a tech guaranteed on site within 1hour (usually sooner depending on the distance from home office, or starting point) at a rate of $85.00hr. during regular business hours. (Off hours were min. charge of $165.hr. and depended greatly on what was needed)
New customers or customers without a contract would pay $135.hr. for non-contract daytime hours. These price’s went up over time, when I left the company new/un-contracted labor was $185.hr. all other prices were raised in perspective, except a few long term customers grandfathered in at a little higher than their original rate.
I also have ventured out at times on my own and charged less as Odom did. I found that most companies that wish to hire you either do not have in house IT or are trying to supplement what they do have for your expertise! Keep in mind, if they were to hire you as a “regular employee” (whatever that is) they would be paying a yearly salary for your services. As contract labor you are only getting a portion of that!
Some companies will (as I like to say) want you to “prostitute yourself”, “sell your soul to the company”, or “give your services away”. If their company did that, they wouldn’t be in business very long! Although you may need to do this in the event you are loosing a customer over a service/time issue. But, this should not be the norm.
When considering your rates, consider this: Think about how you/your company “adds values above the other service companies out there” to what you are doing for your client base. Try to get some of your past customers to write review’s that you can share with prospective customers. Put that on your website, etc. word of mouth is still one of the most powerful sales tools out there. If you are sub-contracting for your competition, make sure those customers know who is actually doing the work; otherwise you are making your competition look good, unless you are doing a crappie job (most of us won’t even go there) In the grand scheme of things you will help yourself, and our industry, if you raise your price closer to the going rate.
And finally, if you think the guy who you tried to get a contract with could be a good customer (very possibly not with what you explained) you may wish to go back and re-negotiate fewer hours, with what RW2887 has mentioned. But make sure you test this (on your own systems) and understand how you would implement this on the client systems before you walk in the door.

Good luck on your future ventures…