View Full Version : Pricing IT business Services??

29th July 2003, 17:38
Hi all
I am thinking about running an IT services company for small businesses to start off with. But the problem is even though I have had loads of project/technical experience, I have never dealt with the financial side of things, I am wondering basically is there any resources e.g websites/books that are available to gain advice about pricing structures for ltd companies in uk? All the books I have seen are mainly for the US industry and I need to know for the UK industry?For example how much would I charge for a standard annual maintenence contract consisting five computers and a server including call outs?
If anyone can help me please let me know. I would be interested in reading or learning any info about this. Much appreaciated all.
Chillinlong 8)

29th July 2003, 18:03
£400 pa seems to be the going rate for your example (maintenance and first xx hours call-out). That's what I was quoted...

Get quotes from other companies in your catchment area.

29th July 2003, 18:11
Thank you for your reply. I am going to now have a look in pricing schedules of other companies.

Mark Snowdon
29th July 2003, 18:11
it all depends on what you cover and what your costs are. The bottom line is how much do you need to make and what does it cost you.

personally I wouldnt touch this market with a bargepole. But I am sure someone can give more detail

consider what exaclty you support ? H/W, O/S, applications / office / backups / extra software ?

What control do you have of the environment ? My only foray into this foundered when the client kept installing every bit of cr@p on every cover disk he found. Then expected me to sort it out under the agreement.

Consider what firewall/antivirus/internet/network is in place and where and when responsibility starts and ends.

What time do you cover 9-5 ? weekends ? bank holidays ? what about when you are on holiday ?

What response time ? Can you dial in ? is 2 hrs OK ?

What happens if you have two customers with probs at the same time ?

All the small companies I spoke to were horrified at the costs I proposed and seemed to expect it to be cheap.
If you can be cheap I am sure you will be OK.

30th July 2003, 08:19
Oh, and get some training/understanding of ITIL (Information Technology Infrastructure Library). This deals with Service Management (what you're hoping to sell).

Project/technical knowledge is going be ****-all use to you if you don't know how to create underpinning contracts/service level agreements, how to set up and run a help desk and how to manage incidents and mitigate against unagreed changes within the client system. There's even Financial Management in there for newbies at this

I'd probably go for those companies with over 10 PC's, Mark is absolutely right about the small chaps... ;)

Matrix IT Ltd
30th July 2003, 08:38
We try to offer support on an adhoc hourly rate basis instead of getting involved in too many contracts.

However we do have a couple of clients who are now interested in setting up a contract.

We are thinking something along the lines of £x per PC per month (depending on how many PC's they have)... With this kind of contract they would get something like:

> Half price callout fee
> Reduced hourly rates
> Half a day (4 hours) onsite a month to troubleshoot any little problems and run health checks etc...
> Agreed SLA's
> 24x7 support if needed
> etc etc etc...

We are currently working on pricing details for this kind of contract. Trying to price things right in this market is very tricky.

30th July 2003, 17:51
Everyone, thank you all again for this reply.
These few replies have given me a massive scope in where and what i should be looking into.
Much appreaciated all.

ps shows how useful these notice boards are.:smokin :D

Board Game Geek
30th July 2003, 18:40
When I was consulting, I only charged for time spent working on the Client's systems, NOT for "insurance policies" or contracts. In fact, I positively refused contracts, as they are a complete waste of money for the Client. You don't need a yearly contract to guarantee a SLA.

Daily Rate (7.5 hrs) : 450.00 for an SME consisting of 1 server and up to 30 pcs.
Half Daily Rate (3.25 hrs) : 270.00
Hourly Rate : 75.00

We had a permanent dial in to the Clients, in which the SLA included weekly monitoring of the Server, Patching, Critical Virus Updates etc. This was charged at £25.00 pw for the 1st Server, and £5.00 pw for each additional server.

For non SLA dial ups, ie, urgent problems and taking control of the PC's for training secretaries on how to use Word or troubleshooting individual PC's, we charged 12.50 for each 15 mins of remote access time.

Our Clients were SME's such as 2 Independent Estate Agents, 1 Small Manufacturer, The 3rd largest estate agency in the UK, 2 medium sized manufacturers, a small reccons.

From experience, each SME had about 2 site visits a month, and with the dial in costs, incurred about 1K a month in support. The large estate agency incurred far more (30 plus servers and over 1000 PC's across 17 sites). When the smaller SME's realised that you couldn't get an IT manager for 12K a year (more like 25-30K), our charges were peanuts and we had no issues justifying our costs. There weren't any issues to justify !

For project work, eg, a 5 day server upgrade and PC's, instead of charging our 5 day rate, we'd drop a % off.
If I was asked to attend site to fix a quickie (1 hours work) that then turned in to a whole day (7.5 hours), I wouldn't charge then 7.5 hrs x the 75.00 rate, i'd upgrade it to the more favourable rate of 450.00. As you can imagine, we never received any complaints about out charges.

We didn't charge for travel costs (all of our Clients were 1 county away or less so it seemed inappropriate).

Best 2 years of my life. I'd do it again if anyone was offering ?

Matrix IT Ltd
31st July 2003, 11:08
Board Game Geek,

Did the SME's really pay £75 per hour for IT Support without any complaints?