Dealing with Small Businesses

[+++MadMatt+++]

I am based in the UK, and have been self employed for almost 3 years mainly dealing with home users. But I would really like to be able to offer a service to small businesses, and from what I gather most IT people offer a monthly/yearly based maintenance contract.

I Charge by the hour, so I have no idea what the going rates for maintenance contracts are, and what is offered to the client, as part of deal.

Any hints and tips would be really appreciated.

Thanks!

 

[kats22]

I think to get started you should find out what local competitors are charging for short term/long term contracts AND what is covered within those contracts.

Then go from there.

 

[TopLevelComp]

I love small businesses. 400 dollars for 1 hour work.

It doesn't matter what your competitors charge, charge what you think you're worth. If you act confident, and come as professional but friendly, it'll work out. Small businesses are good as they aren't like big businesses, you're talking to the owner of the company, not just some drone. I have a local small business owner who knows I'm more expensive than local competitors but I'm also more concerned with their downtime than my pay, so he doesn't care. He's a great customer so I don't charge him for small things, he appreciates it because he knows I could.

 

[MobileTechie]

I am based in the UK, and have been self employed for almost 3 years mainly dealing with home users. But I would really like to be able to offer a service to small businesses, and from what I gather most IT people offer a monthly/yearly based maintenance contract.

I Charge by the hour, so I have no idea what the going rates for maintenance contracts are, and what is offered to the client, as part of deal.

Any hints and tips would be really appreciated.

Thanks!

In my experience, plenty of small businesses are not all that interested in maintenance contracts that commit them to x hours work a month. Many more seem to be just fine with paying for ad hoc work at a decent rate.

If you're interested in B2B then it's worth checking out Podnutz Pro podcast. The main guy on that doesn't do contracts at all and seems to be doing OK.

 

[TopLevelComp]

In my experience, plenty of small businesses are not all that interested in maintenance contracts that commit them to x hours work a month. Many more seem to be just fine with paying for ad hoc work at a decent rate.

If you're interested in B2B then it's worth checking out Podnutz Pro podcast. The main guy on that doesn't do contracts at all and seems to be doing OK.

The only time I've had luck with small businesses (3-5 employees) doing contracts is when I tell them "I've billed you this many hours for the past 3-4 months. We offer (insert contracts) that bill you with prepaid blocks, and if you go over that it's a discounted rate. It'll save you money in the end."

On my contracts, I do what I can to use the hours so they feel like they are getting their monies worth. I'll come in do some extra tune ups, backups, ect. so it's not a situation where "I paid for 10 hours of prepaid time, and you only used 4 hours of that."

 

[MobileTechie]

The only time I've had luck with small businesses (3-5 employees) doing contracts is when I tell them "I've billed you this many hours for the past 3-4 months. We offer (insert contracts) that bill you with prepaid blocks, and if you go over that it's a discounted rate. It'll save you money in the end."

On my contracts, I do what I can to use the hours so they feel like they are getting their monies worth. I'll come in do some extra tune ups, backups, ect. so it's not a situation where "I paid for 10 hours of prepaid time, and you only used 4 hours of that."

I'm always thinking about how to arrange these sorts of things and never happy with what I come up with.

I'm thinking at the moment that a low priced monitoring contract might be good coupled with slight discount on hourly rates. So they pay like £20/mth for the server and less for each workstation to have GFI or Kayesa on it so you can monitor they systems. Then if they need you they get a discounted hourly rate. So a low financial commitment from them but the actual buy in is significant because you are the one who knows what is happening and can approach them for work if you see problems arising. I can't see them going elsewhere whilst this is in place but you don't need to discount too heavily or try to judge how much time they will need. What do you think?

Certainly servers need regular intervention. Someone needs to OK the updates for starters because some of them will break something and some are needed to avoid problems. Only a tech with the skills to understand the documentation and listen out for problems other users get can do this.

I'd be very interested to hear of concrete examples. However this question gets asked a lot and examples with actual rates never seem to surface.

 

[Edge Tech NY]

I'm always thinking about how to arrange these sorts of things and never happy with what I come up with.

I'm thinking at the moment that a low priced monitoring contract might be good coupled with slight discount on hourly rates. So they pay like £20/mth for the server and less for each workstation to have GFI or Kayesa on it so you can monitor they systems. Then if they need you they get a discounted hourly rate. So a low financial commitment from them but the actual buy in is significant because you are the one who knows what is happening and can approach them for work if you see problems arising. I can't see them going elsewhere whilst this is in place but you don't need to discount too heavily or try to judge how much time they will need. What do you think?

I have 4 contracts setup exactly like that and I charge $50 per computer and $100 per server a month. Normal onsite charge is 100/hr they get 80/hr for having contract.

 

[myPCTechs]

I can tell you from experience that 99% of the small businesses out there do not want and will not sign any type of IT contract. It doesn't really matter how you package it, either. It makes sense from their standpoint, why have a fixed expense when they can pay only for the necessities.

If you do a good job your clients will call you out on a regular basis. There's plenty of opportunity to maintain systems when you're being scheduled for regular monthly visits.

 

[Edge Tech NY]

I can tell you from experience that 99% of the small businesses out there do not want and will not sign any type of IT contract. It doesn't really matter how you package it, either. It makes sense from their standpoint, why have a fixed expense when they can pay only for the necessities.

Not too sure about that one... Every business that turned my sales offer down was because they already had a IT company supporting them.

I'd look back over your sales approach maybe? Every house call I get, I make sure I tell them how we service offices and doctors etc too. A lot of the time they work in a dentist office or eventually give a referral.

 

[TopLevelComp]

I can tell you from experience that 99% of the small businesses out there do not want and will not sign any type of IT contract. It doesn't really matter how you package it, either. It makes sense from their standpoint, why have a fixed expense when they can pay only for the necessities.

Maybe your sales pitch isn't that good. Finding a way to save a company money is always a good idea. If they are a constant customer, give them the pitch, if they call you out once or twice a month for 4-5 hours total, then of course the contract isn't going to be worth the time for them or you. Hell, I've made up contracts to have a fixed income.

If you do a good job your clients will call you out on a regular basis. There's plenty of opportunity to maintain systems when you're being scheduled for regular monthly visits.

Why not use the opportunity to make a better impression, by trying to save them money. If your constantly being called out and billing them 10 or 15 hours a month for the past 4-5 months, throw them a contract.

Not too sure about that one... Every business that turned my sales offer down was because they already had a IT company supporting them.

The fact they already have one could be used to your benefit. Ask them how they like them, what they don't like about them. I would it to make them feel like their current IT people aren't providing what they want, and address their concerns.

 

[TopLevelComp]

I'm always thinking about how to arrange these sorts of things and never happy with what I come up with.

It's a hard balance to come up with, but it just ends on what your comfortable with.

I'm thinking at the moment that a low priced monitoring contract might be good coupled with slight discount on hourly rates. So they pay like £20/mth for the server and less for each workstation to have GFI or Kayesa on it so you can monitor they systems. Then if they need you they get a discounted hourly rate. So a low financial commitment from them but the actual buy in is significant because you are the one who knows what is happening and can approach them for work if you see problems arising. I can't see them going elsewhere whilst this is in place but you don't need to discount too heavily or try to judge how much time they will need. What do you think?

This is actually a great idea. I might look into that. It's a great opportunity to further business with them.

Certainly servers need regular intervention. Someone needs to OK the updates for starters because some of them will break something and some are needed to avoid problems. Only a tech with the skills to understand the documentation and listen out for problems other users get can do this.

Absolutely.

I'd be very interested to hear of concrete examples. However this question gets asked a lot and examples with actual rates never seem to surface.

The problem is, what works for me, might not work for you as we all work with different customers in different areas. I sell prepaid blocks and they only cover computers in a specific office. It doesn't cover their second location if they have one, but I do change contracts depending on what they want.

 

[MobileTechie]

The problem is, what works for me, might not work for you as we all work with different customers in different areas. I sell prepaid blocks and they only cover computers in a specific office. It doesn't cover their second location if they have one, but I do change contracts depending on what they want.

Yeah but seeing examples is handy anyway. So what sort of discount does a prepaid block get? E.g. do you sell say 10 hours/mth for 8 hours ad hoc rate?

Does the block have a time limit before it runs out or carry over or whatever?

 

[4ycr]

I have 1 contract so far but most small businesses are either too small to justify it or they already have a contract and I need to wait until it is up before they will consider me.

It is all about trying and luck, if you get there at the right time.

 

[TopLevelComp]

Yeah but seeing examples is handy anyway. So what sort of discount does a prepaid block get? E.g. do you sell say 10 hours/mth for 8 hours ad hoc rate?

Does the block have a time limit before it runs out or carry over or whatever?

I asked local businesses what type of IT plan they have, how many they'd like an IT Professional to be around at the business. From there I designed the plans.

5, 10 and 20 hour blocks monthly.
60, 90 and 120 hour blocks quarterly.

Not a lot of businesses get the quarterly because it is a bigger number, the main clients for this are local banks and real estate companies. I work with local independent/one-man-show techs to go to one of my clients if I'm busy, they usually get 50% of what the normal billing would've been for that time (At the discounted rate.)

Yearly plans I introduce after I've been with a client for over a year, I look how often they called me out, and how long I was at the clients business for each call out, and we design a plan around that, we go up in hours or we go down in hours, all depends on how often the client needs me.

My other post.

Fillertext

 

[MakoLogics]

I can tell you from experience that 99% of the small businesses out there do not want and will not sign any type of IT contract. It doesn't really matter how you package it, either. It makes sense from their standpoint, why have a fixed expense when they can pay only for the necessities.

If you do a good job your clients will call you out on a regular basis. There's plenty of opportunity to maintain systems when you're being scheduled for regular monthly visits.

I disagree, 90% of my income is small business contracts. They average from $120 to $1200 a month. Its all in who your selling the contract to. I consider 1 to 12 million a year small to med sized company's. They typically have 5 to 100 employes, out of that we get the servers for sure and then the accountants and CEO pc's the rest are billed at a discount per hour (When needed). For instance, we sell a contract that covers the basics on the server and maybe one or two high profile machines. This covers normal repairs... ie virus removal, updates etc etc, anything out side of this is billed at a discounted rate, even the machines on contract. So if a servers hard drive crashes we bill them for the time but at a much greater discount. This gives our company a nice cushion to float on with monthly contracts and we still make decent money on true failures. Its a win win for us and the customer. The only problem is you need to find your sweet spot between your MO contract and the hourly rate. My hourly rate is $79 discounted to $55 with a contract. Servers $150 a month pc's $50.... I hardly ever get called out to take care of what I call (True Failures) Hardware crash etc. So the contracts are great for us and easy to sell. I will be honest, we don't bill every client the same. Some just don't justify the need for $150 per server contract. What I mean by this is, we will not bill a client $150 for a simple file server running server 2008 but we will bill $150 for one running SBS 2008 with Exchange. That means we have to take care of Exchange issues and those issues are (ALL THE TIME). So be careful how you bill... We honestly try to help our customers, most are friends now after 10+ years in business. These are tough times, don't try to over charge. Take care of your customer and they will take care of you....

 

[+++MadMatt+++]

In my experience, plenty of small businesses are not all that interested in maintenance contracts that commit them to x hours work a month. Many more seem to be just fine with paying for ad hoc work at a decent rate.

If you're interested in B2B then it's worth checking out Podnutz Pro podcast. The main guy on that doesn't do contracts at all and seems to be doing OK.

Well maybe it isn't such a great idea for me to work with businesses, as I don't have a understanding of servers and server software, I'm sure I could learn it though. Thanks very much for telling me about the Podnutz podcast, I have just listened to - Episode 54: It's Ok to make money. That was very interesting!

 

[MobileTechie]

Well maybe it isn't such a great idea for me to work with businesses, as I don't have a understanding of servers and server software, I'm sure I could learn it though. Thanks very much for telling me about the Podnutz podcast, I have just listened to - Episode 54: It's Ok to make money. That was very interesting!

I don't think Podnutz Pro is on episode 54 yet. You must be listening to one of the other podnutz casts.

There are lots of small businesses around without servers these days. But I think you'd probably want/need to learn about servers eventually

 

[MakoLogics]

Well maybe it isn't such a great idea for me to work with businesses, as I don't have a understanding of servers and server software, I'm sure I could learn it though. Thanks very much for telling me about the Podnutz podcast, I have just listened to - Episode 54: It's Ok to make money. That was very interesting!

Sign up for Microsoft Partner network. Get your hands an all flavors of Server and just play with it. Every case is different, all of my clients run Servers of many different flavors. If you are not familiar with it don't mess with it. Exchange is going to be the tough one for you I think. I hate it because you really have to be pro active with it. Most of my exchange calls now a days are from IP's being black listed do to spamming. It's a real pain in the ass. Much bigger money in server work though. Train Signal has great videos on learning servers, I highly recommend it.

 

[Cambridge PC Support]

I have just listened to - Episode 54: It's Ok to make money. That was very interesting!

it's http://www.podnutz.com/podnutz054 which I highly recommend, this guy knows his stuff!

 

[matrixcheck]

Can anyone direct me to a place that I might get a generic Prepaid Contract that I can make into my own?