----- Mike Hammett Intelligent Computing Solutions http://www.ics-il.com----- Original Message ----- From: "Martha Huizenga" <[EMAIL PROTECTED]>
To: "WISPA General List" <wireless@wispa.org> Sent: Wednesday, August 15, 2007 5:33 PM Subject: Re: [WISPA] Managed IT Service
It really does depend on your market. If you can get an office for $250 a month, then your prices are probably in line with your market. I couldn't get a closet for that price! :-)Mike Hammett wrote:Currently it is only myself, so I pocket 100% of it. I'll expand upon my thoughts not to defend my price, but to say where I'm coming from in an attempt to figure out if my current system won't scale or if everyone else is just screwing their customers.That said, I don't see how all of those things really add up to that much money. At $20/hour, that's just under $42k/year for a full time employee. Make that just over $43k after you figure in unemployment, social security, and Medicare. I only pay income tax on what I profit, so that's not part of the equation.Office space and use is pretty cheap. $250 for the whole office, I have options on other office spaces in the building.Most any problem can be quickly diagnosed and repaired, being able to include travel time within the 1 hour minimum. Otherwise, the $15/hour I make for beyond the included 3 hours surely pays for the $5 - $10 in mileage they would use (until I have my own vehicles).Everything is manual at the moment because there just isn't the volume, but I can't see the minute I spend entering into QuickBooks taking that much time or money to bill them, pay the employee, etc.There haven't been many things that I've encountered that I haven't been able to fix quickly. I know at least one other person that is about as smart as myself and they'd be tickled pink with $10/hour. I greatly prefer people that have gained their knowledge outside of formal education. After going through college, I would have only hired 2 people in my class of 30 (myself included) due to information absorption and retention rates. College just trains you to expect more than what you're really worth.etc.If we're going on 100 billable hours of work a month, that's 33 customers, assuming they actually need my services that month. I've only been doing this a couple months, but I really don't think I'll be needed much. They're paying for something they may not utilize, but have on reserve. 33 customers would be almost $60k/year. That leaves me $15k/year to cover all of those other, misc expenses. If I can't do that, I have bigger problems to deal with.Maybe I'll kick up my rates 25% or so, but $80 or $120/hour, IMNHO is just screwing the customer.----- Mike Hammett Intelligent Computing Solutions http://www.ics-il.com ----- Original Message ----- From: "Clint Ricker" <[EMAIL PROTECTED]> To: "WISPA General List" <wireless@wispa.org> Sent: Wednesday, August 15, 2007 4:30 PM Subject: Re: [WISPA] Managed IT ServiceI don't see any possible way that you're making any sort of actual profit onthis (or even really breaking even) at this rate, unless you've got some redicuously cheap labor.... Consider this...If you're doing $40 an hour, and you had a full time person billing 100% of the time (ie 168 hours per month), then you'll max out for that employee at about $80,000 of revenue....you then have to pay taxes, mileage, insurance,etc...Now, take into account that a single full time employee doing this full timein reality will never do more than 100 billable hours a month...This is from experience and even assumes that you're fairly streamlined interms of paperwork, supplies, travel routes, etc...This means, at $40 per hour, you'll only pull in $48,000 per year in revenue for that full time employee....assuming you have a streamlined operation. There's no room in there to pay them, pay taxes, pay mileage, pay for their portion of office space (and other expense), pay for billing, pay for yourtime in management, and so forth. I'd double it as a starting point if you're in a rural market, triple if you're urban, and probably more for people who aren't regular customers.Still, a lot does depend on your market and your business model. Are your employees knowledgeable? Do they really know what they are doing on thisstuff, or are they just fumbling through...Keep in mind, as well, that small business consulting is not too different from dealing with people in the home construction / repair industry--there are a lot of people who just walked off the farm, so to speak, and claim tobe in the business (no insult intended, and some of them do well). Theyaren't always the best in terms of quality, and they aren't always the best in terms of professionalism. Most businesses that have some sense pay moreto get better quality...in some sense, if you price yourself higher, youprice yourself into the good customers. You also give yourself the money todo it well... -Clint Ricker Kentnis Technologies On 8/15/07, Mike Hammett <[EMAIL PROTECTED]> wrote:Does this sound fair to all parties? My normal rate is $40/hour, with $80/hour for emergencies.I charge $150/month to manage a business's network. This includes 3 hoursof support. I also will VPN into the network and ensure that operating systems, anti-virus, etc. are updated, which does not consume any hours. Additional support is available at $35/$70 per hour. ----- Mike Hammett Intelligent Computing Solutions http://www.ics-il.com -------------------------------------------------------------------------------- WISPA Wants You! 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