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Old 06-15-2009, 12:59 AM
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Default Different Rates for Home and Business Customers?

I've been charging all my clients the same - $64 / hr for on-site service whether home or business, but I'm contemplating changing things up a bit. I feel that this rate is slightly too high for residential customers, and too low for business customers.

I am considering lowering the residential rate to $60 /hr. and increasing the business (including home based businesses - there are a lot here.) to $74 /hr. Most residential clients do not require the advanced skills that businesses do. Businesses often have you looking at more than one computer at a time, dealing with more complex networks, more phone time, and generally require faster service and expect their emails to be responded to fast. I also keep track of important information like passwords and network configuration for my business clients. I feel that this, amongst other things, deserves a rate increase.

Keep in mind that I'll be making many changes over the next little while and there is a lot going on in my mind. I'm just finishing up school (college) and about to go at this full time (which I have been doing pretty much anyways) so I'm working on numerous changes. Let me know if you think I'm out of line on this one, or if you have any better suggestions.
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Old 06-15-2009, 02:25 AM
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I have always had two different rates for domestic and business customers. It's currently at €65 for domestic and €85 for business.
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Old 06-15-2009, 06:30 AM
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I believe that the setting of standard, universal rates (hourly rates, if you will) is a big mistake.

You should have a base rate, yes, and this base rate should be set in such a way that with your current customer base you and your business can survive decently.

I believe that you should then create a rate catalog, and based on your experience, forget about the hourly rates. Clients like to know where they are going before they give you their business. IME, a customer is much more likely to say yes to a $250 proposition for installing hin home network than to an $80 hourly rate (especially if he has tried himself and spent a weekend without avail). A weekend at $80 sounds like a lot of money !

Keep in mind that no IT business can survive nor thrive on residential customers! Often these customers will COST you money when you start out your activity. Business customers pay your bills! You take bigger risks with business customers, you need much higher insurance (especially against data loss, which is often NOT included in standard insurance) and you need tools. Multiply your residential rates by at least 1.5 for businesses, I would advise.

Setting your rates depends on the market (like everything else). A small business in a blue collar residential area is overpriced at $60 because the market will not support such fees. The same business in Malibu, Palo Alto or Redwood City, CA will not do residential business at this price because it it far to LOW (Geek Squad and others set the rates in these areas).

I have found in the past that one can easily set ones first prices by looking at a popular car servicing center or on-site TV repair center in the area and setting ones rates at a factor of 1.25 (after all, you are doing highly technical work, right and you are going on site)
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Old 06-15-2009, 11:02 AM
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I"m sure you know your market there better then most on this site. But I am curious about the "4" thing...64, 74 ?? Why not 65,75? Just kind of wierd but i'm sure there is a reason.

If you can afford to lower the residential for whatever reason then I see no problem with that especially if you say there is more in the line of business work to be done.
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Old 06-15-2009, 11:08 AM
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I am guessing it is supposed to be linked to the phychological effect of people thinking $1.99 is more cheaper than $2.00 than it actually is, but I am not sure how effective it is with a whole number.

My $0.01 for the post, I believe that most people on here already charge different for business than they do for home users. They have completely different needs and desires and to group them I believe would be a mistake.

Last edited by MrUnknown; 06-15-2009 at 11:21 AM.
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Old 06-15-2009, 03:32 PM
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Quote:
Originally Posted by MrUnknown View Post

My $0.01 for the post, I believe that most people on here already charge different for business than they do for home users. They have completely different needs and desires and to group them I believe would be a mistake.
Yeah, I couldn't agree more. Now that I think about it, that was my philosophy about 4 years ago when I started the business, but I knew I wouldn't be able to cope with the demands of business customers properly due to my busy schedule. I then decided to lump everybody in one group and charge everyone the same in an effort to avoid issues. I'll be separating them now.


Those of you that charge separate for your business customers, do you do the same for home based businesses?


@cmonova: As for the "4" thing. There are several other business nearby that charge $65 and $75 /hr. I just knocked $1 off to be ever so slightly more competitive.
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Old 06-15-2009, 06:32 PM
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It would depend on how "advanced" their needs are. If its a home based business with a server and NAS, then it gets the business rate.

I have a client who runs a daycare in her home, but I consider her a home user.
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Old 06-18-2009, 05:31 AM
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I have a 30% markup for businesses. It helps cover all the extra effort businesses require.
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Old 06-19-2009, 06:40 PM
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Thanks for the input. Any other thoughts, comments, or suggestions on the matter before I commit?
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Old 06-19-2009, 06:51 PM
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I think you need to take everyone's comments under advisement and base your decision on your location and market. I charge the same rate for business and residential. In fact I usually charge more for residential because they always want me to come after hours. I have found over the years that residential usually winds up costing me more time and money than my business calls. People always want you to spend time teaching them how to attach emails but want to argue over the bill. My advice is to just use your best judgement.
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