Costing / Pricing query

Hi All,

This might be too much of a “personal” question for an open forum but I wondered if anyone would be willing to share some of their cost calculations and hourly rate. I know Tom has his hourly rate on the website and thought that given his general open approach that some others here might do the same.

I’m going through the process of moving from break fix to a more managed proactive service. I’m currently trying to decide what I should be looking to charge per device and am really struggling. I think that most of the computers I currently manage I only ever need to touch once or twice a year so coming up with a monthly “On average I spend x hours per PC” seems a bit silly and I will be calculating my billing by the second almost. Same applies to phones, switches, servers, access points etc. The actual hands on per device time per month is really quite low.

I’m also not sure where to place my hourly rate. I’ve been doing this for 20 years so I know I can’t be too far off or I wouldn’t have any work. I know that hourly rates will vary massively by region and that I need to be charging enough to cover my costs. The UK nationals minimum wage is just short of £9 per hour and I currently charge between £50 and £75 depending on the customer and the type of work (pulling network cable costs less than sitting on management committees). This works out at somewhere between 5.5x and 8.5 times that minimum, I wondered if anyone else could look at a similar ratio (easy if you are in the UK…).

I do understand that some people might find this too detailed to be prepared to share but if you can I would appreciate it, a DM would also work if you don’t mind sharing but don’t want it on the forum.

I’m from the UK so I know the cheapskate culture it’s all to pervasive, that is a major hurdle.

While I work in a different domain as a management consultant my rates are in the 800-950€ range, in a past life I implemented microsoft project server and was pimped out at 1500+£.

Not sure the actual rates are so important but the justification is that the best part of 20+ years of experience has gone into building up my knowledge (across a range of fields). The customer simply doesn’t see the effort that goes into building up the knowledge they see that you identified a permission was incorrectly set in SQL, they could have solved that in 5 mins !

They are paying for the effort it takes to keep up with the technology, most companies suck with crappy workers hence they need external help, that’s when you come in.

If the job is easy to scope it’s easy to price, if it’s tricky then it’s time and materials.

For most customers if it’s on budget it’s too expensive, if it’s on time it’s too late and if it’s to quality it’s not good enough !!

Stick to your guns, if you know the value you are able to add to their business charge them accordingly.

If you are looking for pricing models compare with lawyers and dentists.

Thanks @neogrid,

I feel like my current rate is appropriate and am absolutely not in a race to the bottom. I also remind people sometimes that, as you say, you are not paying for the 10 mins it just took to do the job but the years of experience that made me able to do the job in 10 mins.

I think my struggle is more about estimating costs, for example, maintain a PC for a year. My head tells me I should be allowing 15 mins per month to install updates and do the proactive stuff + maybe another 15 for “other work” but the reality of my current situation is that I don’t think I spend anywhere near that amount of time (but I don’t have good enough records to say for sure).

I like your suggestion of comparing rates to other industries. I have also found a few websites aimed at UK businesses looking for support giving some idea of costs, again, they seem to be roughly in line with my thoughts so maybe I’m just massively overthinking the situation!