Talking about pricing and tooling and other expenses


#1

So I just watched @LTS_Tom’s video (https://www.youtube.com/watch?v=iTUb3no6dTs) and I know that it’s really hard to come up with a solid answer when someone asks “what do you charge?” or “What should I charge” when it comes to starting out, but it’s a question that comes up often - not just in the IT/MSP/Break-Fix space (as a senior dev I got this question a lot too).

Anyway, this got me thinking about how I’ve answered this question before - I gave a math problem as an answer. For the freelance software developer (for me anyway) I always started with variables, factored them into an algebra problem, and then solved for “x”. Things like web hosting, software/service licenses (one time), service fees, insurance, equipment all were put into a formula.

So my question for all here is what variables should be put into the “MSP pricing formula”? I’m not looking to create a one size fits all thing, but a starting point and guidance for those who are looking to build up in the IT services field.

Anyone have any costs that they have now that they didn’t realize they’d have when they started?


#2

Well, rightly or wrongly, we charge all of our customers differently. There is no ‘set price’ that we charge. When we go to onboard we asses what needs to be done and what needs to be managed. Things that need ‘doing’ are projects, and they are charged accordingly every project is different, same as the monthly Managed Service charge - every client is different.
We don’t bill by the hour if a client is part of our managed service agreement. Unmanaged clients are charged for ‘on site visits’ at £85 for the first hour, £65 for every hour there after, this is the same for remote support.
Subscription products such as Office 365/Gsuite etc are all set at a price.
Hardware is purchased separately from any managed service agreement & is paid for upfront. if a client expands and adds say, two or three new Computers / Laptops the MSA price doesnt change, anything 5+ (devices/Users) and we will review the price as its beyond the original scope of the agreement. Plus the cost of AV etc.
Licensing etc, obviously is a set cost, we have to purchase it for x amount, the margin we make on that depends on the client.
if for example we have a client paying us x per month, now they want to go with Unifi Products such as AP’s, we price for the project inc hardware, and also the management of those devices either by our controller, a local controller or a VPS controller over at Digital Ocean, we have to manage those systems, so the price would be adjusted accordingly, but every client is different so that price may not match another of our clients prices.
Hope that gives you an insight into how we do things!


#3

Thanks a ton @Chris_sctech! Like clients, each business is different with different constraints and requirements. I like to see, even if it’s at higher level, how things are done by different people. Maybe it’s just the engineer in me, but I like to figure things out so that I can make them the most efficient for the specific circumstances.

Maybe I’m a bit loony for wanting to come up with a “Drake’s Equation” for pricing, something a bit more universal that can be applied to several different types of businesses.


#4

I came here to ask a similar question, in a similar format. I was wondering what the suggestion would be for remote support. If I charge N for onsite what should I charge for remote support? Like for example I’m going on site this week to configure a physical connection for a client and I’m going to charge $N/hr. Tomorrow, I’m going to configure email for another client, which will be done from my home office. What should I charge for the remote job? $N * .75? or $N * .5?


#5

For us, we charge a bit more for on site and the on site is always min 1 hr vs we do remote support for existing MSP clients billed in 15 minute increments.


#6

Gotcha, I think I’ll do $N*.75 and do as you do with rounding to the nearest 15 mins.