Do I Know What to Charge as an IT Consultant? - Spiceworks ...

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How Do I Know What to Charge as an IT Consultant?http://www.experts-exchange.com/ITPro/Consulting/A_1905-How-Do-I-Know-What-to-Ch...Page 8 of 134/3/2012Author CommentThanks!(cell phone - 3rd item Figure 1)Expert CommentFantastic article, I will be sharing this link around to a few people lolExpert CommentInteresting article. I guess we're a little lucky here in Australia that we don't need health insurance (we have agood public health system), so that cuts out one cost.I'd almost say however that the cost of sales should be higher, aside from advertising there is the time spentconvincing a potential customer that they should use your services (in my case, it is project based) I have yet tosee a customer that didn't need a little nudge to get them on board. Even without an actual cost (and let's face itthere is always one, even if it's simply purchasing a cup of coffee for the potential customer) there is the timecost, and that time cost can go up quite considerably if there is any sort of travel time involved as well.I personally work on the basis of 50% billable time, 10% misc (eg training etc), 40% sales, and make sure thatthe 50% billable time covers the cost of winning the sale in the first place, and covers the cost of the saleswhich I didn't win.Expert Commentcongratulations,so helpfull articleregardsedoExpert CommentWow...It's like you looked straight into my books for the IT with an office. I have been needing this article andthese numbers for years. I am way too cheap for consulting and support I do. You just made my check go up.Much thanks.Author Comment
How Do I Know What to Charge as an IT Consultant?http://www.experts-exchange.com/ITPro/Consulting/A_1905-How-Do-I-Know-What-to-Ch...Page 9 of 134/3/2012harvyk,Cost of sales is whatever you need it to be. This is just a guideline that tries to take into account all majorexpenses. Your expenses can definitely vary and things like sales and marketing expenses don't necessarilyhave correct or even consistent answers.I was even thinking today that for clients that you may have a recurring agreement with, you can lower yourrate on. For example, if you consistently work 2 days (16 hours) per week at a given client, then, with anaverage of 4-5 hours of billable time the other three days, you could lower your rate for the consistent client.Ultimately, the point of the article to help both consultants and those who need there services understand whatan appropriate rate is for professional services.Expert Commentleew,Again, thank you for the time you spent putting this incredible article together. You know what I thinkwould be equally or more valuable to post? You mentioned agreements with certain clients. It would be great tohave a breakdown on what contributes to the determination to the cost of that monthly agreement with theclient. For example; if they have 1 Exchange Server or 2 servers, number of computers, complexity of softwareon each computer, VPN networks tying into other locations, network printers and so on. It would be beautiful tohave a rough calculator based on the equipment and setup a client has to determine an agreement amount permonth. Obviously the sell is that off-site IT is much less costly than full-time on-site IT, and generally an offsiteIT person is much more skilled than a FULL TIME on-site IT, as they deal with more computers,equipment, and more IT problems making their skill level increase exponentially over a FULL TIME 1 site ITguy, but how much less costly do you determine? There is always the infamous never paid invoice of justhaving access to a highly skilled IT Pro that is always looking out for the best situation in terms of technologyto implement or not implement into your business, including the numerous free questions/consulting youprovide over the years via email or a quick conversation on the phone.Author CommentZionTech1,What you're asking about is, in my opinion, how to price yourself as a Managed Services Provider. This is adifficult question.I'm a part of a great group of Small Business Consultants in New York City. We have monthly meetings wherewe have discussions on various business and technical topics, go over recent developments in IT and relatedbusinesses, and have presentations from vendors. A few months back we had a discussion on this topic and theonly thing that was clear was that this wasn't clear. Everyone has their own definitions of what they'll includeand how they'll include it. Some may have certain hardware requirements to even offer such a service while
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