Hopefully this forum is suited for my question. I am a IT business owner. Up until now, we have mainly done one-time jobs for home and small business. Recently I have been given the opportunity to take on a contract for an office building. So basically I need some advice on what type of rate I should be asking for a job such as this. The client simply wants to maintain/upgrade about 30 terminals and 2 servers, as needed. Any direction would be very much appreciated.
Tek-Tips is the largest IT community on the Internet today!
Members share and learn making Tek-Tips Forums the best source of peer-reviewed technical information on the Internet!
-
Congratulations derfloh on being selected by the Tek-Tips community for having the most helpful posts in the forums last week. Way to Go!
Contractor rate average?
- Thread starter tpctech
- Start date
johnherman
MIS
Many options to consider.
Consider a Retainer plus work performed type of contract. You get a solid amount of money to sign the contract (retainer). This binds you to being available to support emergency work and problems. Then, have an hourly rate. Might also consider having a night and weekend/holiday rate. Could also base the retainer on the number of terminals and servers supported, so if they add terminals/servers, you get more money (due to added responsibility).
Or you might gamble on a fixed bid contract. For, say, $30,000 per year I will take care of any upgrades and repairs required on your systems. Replacement parts and upgrade equipment to be paid for by client. Or, say, fof $500 per terminal and $10,000 per server, I'll provide annual support.
Or you could opt to go with hourly only. For this type contract, I would definitely have higher rates for night and weekend/holiday work, but reserve the right to perform scheduled work and services during that timeframe at your option at the regular rate.
-------------------------
The trouble with doing something right the first time is that noboby appreciates how difficult it was.
- Steven Wright
Consider a Retainer plus work performed type of contract. You get a solid amount of money to sign the contract (retainer). This binds you to being available to support emergency work and problems. Then, have an hourly rate. Might also consider having a night and weekend/holiday rate. Could also base the retainer on the number of terminals and servers supported, so if they add terminals/servers, you get more money (due to added responsibility).
Or you might gamble on a fixed bid contract. For, say, $30,000 per year I will take care of any upgrades and repairs required on your systems. Replacement parts and upgrade equipment to be paid for by client. Or, say, fof $500 per terminal and $10,000 per server, I'll provide annual support.
Or you could opt to go with hourly only. For this type contract, I would definitely have higher rates for night and weekend/holiday work, but reserve the right to perform scheduled work and services during that timeframe at your option at the regular rate.
-------------------------
The trouble with doing something right the first time is that noboby appreciates how difficult it was.
- Steven Wright
Another model is to provide x amount of hours for a fixed rate monthly that they pay whether you use those hours or not. Or a fixed charge for some specific (very carefully defined) recurring tasks. Then charge an hourly rate for additonal hours or tasks. We do something similar with one of our customers. We charge a flat rate for price imports and maintaing their database (adding deleting users, setting up backups, restoring backups if need be, etc.), but changes to the web site itself are charged at an hourly rate.
As to what the rates you should charge, those are very much a function of the local area you are in.
Questions about posting. See faq183-874
As to what the rates you should charge, those are very much a function of the local area you are in.
Questions about posting. See faq183-874
You can get some ideas of rates at
SQLSister has a good point -- you need to write your contract very carefully so they don't take advantage of you. If you feel you're only willing to make 30 hours a month available to them (because you have other clients), then put a "step" in the pricing once they get to that number of hours to discourage them.
Also - make sure you keep good records. If things go sour, you'll need them to defend yourself. If you're on-site, and someone says "Oh, can you look at this while you're here?" -- make sure they send you an email confirming the request.
Chip H.
____________________________________________________________________
If you want to get the best response to a question, please read FAQ222-2244 first
SQLSister has a good point -- you need to write your contract very carefully so they don't take advantage of you. If you feel you're only willing to make 30 hours a month available to them (because you have other clients), then put a "step" in the pricing once they get to that number of hours to discourage them.
Also - make sure you keep good records. If things go sour, you'll need them to defend yourself. If you're on-site, and someone says "Oh, can you look at this while you're here?" -- make sure they send you an email confirming the request.
Chip H.
____________________________________________________________________
If you want to get the best response to a question, please read FAQ222-2244 first
- Thread starter
- #5
Thank you for all of your suggestions! I will certainly use them. If anyone else has some more points, please keep replying. Another question though... Initially I may need to bring in some outside help to get things in order quickly. If I choose to go the hourly contract path, is there something that can be included in the contract so that the extra manpower can be covered financially? Please forgive my ignorance in this area and thanks in advance for any further contributions.
johnherman
MIS
Write the contract such that you can hire or subcontract as necessary to meet the conditions required by the Service Level Agreement(s). This will not relieve you of the responsibility for the work. If you sign the contract, you are responsible for the work and actions of your employees. With subcontractors, you can sue them if you are sued.
-------------------------
The trouble with doing something right the first time is that noboby appreciates how difficult it was.
- Steven Wright
-------------------------
The trouble with doing something right the first time is that noboby appreciates how difficult it was.
- Steven Wright
There are some good suggestions in this thread, but the one idea I didn't see addressed would be:
How big is your company? Can you afford to not have this contract? I mean if you need the business (and let's face it, more business is good) then perhaps you need to position yourself at a cost effective rate even if you are only at break even point. You can build up a client relationship while proving your worth to them in such a way that they'd be more willing to go with a rate increase next year.
So, give some thought as to not fleece them coming in the door but rather build a good client relationship (which btw, can lead to other contracts because people talk and if you're good to one client, you can easily be referred for others).
Just something else to stew on...
Cheers!
- Status
Similar threads
