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Old 12-07-2010, 06:02 AM
archie42 archie42 is offline
 
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Default Why are IT Support Rates so low?

I am thinking of starting my own IT repair buisness.... however.... once I have done some research into competitors pricing.... I AM SCARED!!!

The prices are so low......

I always thought IT was a professional and at least equal to the trades (plumbers, electrician, handyman)......

HOWEVER I have seen many IT people doing services for about $25- an hour....

WHY SO LITTLE????
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Old 12-07-2010, 06:29 AM
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The kind of people who charge that amount of money, imo, will not last. One way of finding out the value of your trade, is to ring round some competitors, and see what they are charging for their services, or /$ pr hour. Then take it from there.
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Old 12-07-2010, 11:59 AM
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I got told I was too dear from a trades person not long ago, I charge 30/hour with no callout fee, I almost dropped with shock as he said he could find a plumber for 22/hour.

I have yet to see any trades with prices that low in scotland
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Old 12-07-2010, 12:08 PM
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I vaule myself. 45/hour offsite, 65 onsite (city), 85 outside the city. Some people find this too high - I tell them you pay for what you get and show them the door if they are not happy.

It works out like this, pay someone half what you pay me but it will take them double the time and probably repeat calls to get the thing fixed 100%.

You'll probably find that a lot of people you speak to will have a low fee but mark up the pirce of hardware or other techniques to make it worth their while.

I do not state my prices as I find that people will be put off by them or find the cheaper providers. I always ask the customer to bring the systems to me as this will save them money on a call out. Once I've have had a look at the problem I'll be better placed to give them a price for repair. This locks the customer in - then if they do turn down the repair I charge them a diagnostics fee for my time. (this has never happened)
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Old 12-07-2010, 12:09 PM
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If your rates are cheap, you'll attract cheap clients. Try find a happy medium.
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Old 12-07-2010, 12:27 PM
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Quote:
Originally Posted by archie42 View Post
I am thinking of starting my own IT repair buisness.... however.... once I have done some research into competitors pricing.... I AM SCARED!!!

The prices are so low......

I always thought IT was a professional and at least equal to the trades (plumbers, electrician, handyman)......

HOWEVER I have seen many IT people doing services for about $25- an hour....

WHY SO LITTLE????
Can you replace your house, your plumbing, or your automobile for $300.00? If you are dealing with residential customers, that is the mentality you will be dealing with, and for them, probably somewhat rightly so.

My clientele is a mixture of both residdential and small business, and I sometimes have to remind myself which I am dealing with at any given time.

Rick
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Old 12-07-2010, 02:35 PM
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I think the reason the money is low (although it's not nearly as low as you stated for decent techs), is the competition and low barriers to entry.

Thing is, there are thousands of people who think they know a bit about computers who have a go at this work. This site alone has a constant stream of new members, although many of them don't stay the course.

The skill level of many techs is at the "power user" end of things. Even techs who've been in business and even own shops can have a shockingly low level of knowledge. They just do the old scatter-gun approach of trying one fix after another until one happens to work. Sometimes the only difference between them and a user is confidence and persistence.

With all that going on, it pushes the market value down. There is always someone who will claim to be able to do the job for less and money talks.

I have to say that I am, as yet, unconvinced that home-based, residential-only repair/support is earning many people much money. When you take into account the low rates, the travel time, the tricky jobs that take many hours, various expenses, car costs and so on - I don't see anyone other than the busiest, best organised and fortuitously located techs bringing in decent money.

Last edited by MobileTechie; 12-07-2010 at 06:04 PM.
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Old 12-07-2010, 05:32 PM
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Quote:
Originally Posted by MobileTechie View Post
The skill level of many techs is at the "power user" end of things. Even techs who've been in business and even own shops can have a shockingly low level of knowledge. They just do the old scatter-gun approach of trying one fix after another until one happens to work. Sometimes the only difference between them and a user is confidence and persistence.
+1. A true technician diagnosis a computer by understanding how it works and why it's not, not just simply what it will takes to fix it.

There was someone in my are charging $20 flat rate for a fix. I no longer see his advertisements. My theory is that there are two types of "techs" who do repair for such low rates: the one described above, and the out-of-work ITs. The latter are good about setting up and configuring the computer, and small little quirks with common software like outlook, but they typically don't do hardware and most software diagnoses for them will just end in a restore/reimage.

You can try explaining to a client the difference between you and the $20 tech, but don't be surprised when most to all of them aren't phased by the argument. The fact of the matter is that those people see our work as unskilled labor, and it's not about who can fix it swiftly and accurately, it's about who can do it for the least amount. Hopefully, they'll learn their lesson soon enough.
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Old 12-07-2010, 05:49 PM
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Quote:
Originally Posted by archie42 View Post
I am thinking of starting my own IT repair buisness.... however.... once I have done some research into competitors pricing.... I AM SCARED!!!

The prices are so low......

I always thought IT was a professional and at least equal to the trades (plumbers, electrician, handyman)......

HOWEVER I have seen many IT people doing services for about $25- an hour....

WHY SO LITTLE????

Archie42, you've kind of demonstrated the answer to your own question in your personal history: http://www.technibble.com/forums/sho...245#post168245

And while much of this has already been mentioned in this thread and a tremendous number of others, I'm going to throw out again . . .

1. A low a barrier to entry. You were a "youngster in high school" when you started a computer business in 1988. More than twenty years later, "youngsters in high school" are still starting businesses. And they aren't charging $90 per hour (you probably didn't either).

2. A low barrier to entry. Unlike plumbers, electricians and other tradesman, there are no standards nor requirements to be met before calling yourself a computer technician. No apprenticeships, no tests, no minimum equipment list, nothing. Not even any association with any teeth or substance.

3. In the land of the blind, the one-eyed man is king. (aka, A low barrier to entry. ) Computers are used mostly by people who know only the basics - if that. So youngsters (or oldsters) with a bit more knowledge impress friends & family. Next, they start a business . . . See numbers 1 & 2.

4. The economy sucks, wages are stagnant, lots of somewhat technically oriented people are unemployed or underemployed. These are people who will do whatever they can to pay the bills. It's been amazing to see how many computer repair "businesses" have popped up in my own area over the last year. And see numbers 1, 2 & 3.

5. In some (perhaps many?) cases, people charging lower rates are only part time. They have incomes, health insurance, etc. already covered. Their rates aren't as high as some Technibblers, because they don't have to be. I fall into this category, although my rates still seem to be around the Technibble median.

6. The typical computer no longer costs a couple thousand dollars. Or even one thousand. Or even five hundred. If a car cost less than five hundred dollars, what hourly rate would you pay a mechanic?

7. At $25/hr, a guy working about 3 hrs a day generates over $25,000 a year. Sure taxes and honest reporting should decrease that amount. But let's face it - someone doing cheap computer repair receives very few 1099's. That's not a lot of money, but a single guy might survive, and a family guy might make ends meet. And if he can tough it out, a low income business might eventually grow into something more worthwhile.

So perhaps the appropriate question isn't "why are rates so LOW?", but instead ask how those of us who charge more are able to do so. And focus on following those examples.
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Old 12-07-2010, 06:48 PM
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because anyone armed with Google and half a brain thinks they can be computer technician.
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