As IT Consultants, we tend to focus on the computer problem. A client will contact you saying something is wrong, and our mind goes “ok how do we fix this as quickly as possible”. But then a piece of your mind sneaks in and says - “but wait, we bill by the hour, why fix this quickly?”
So the question is, how do we structure our billing to be fair to, and benefit, both the client and our own bottom lines?
At this point, many of us understand the idea of MRR - Monthly recurring revenue. Even that has its issues, such as AYCE (all you can eat) models that end up, in certain cases, allowing a client to take advantage of time, causing a loss of profits.
So how should consultants structure their offerings?
Easy. You need two plans:
*Note how it’s a “monthly price” and not a “set price” - your price will adjust every month.
For your Pro plan, you can charge $40-60/computer per month and offer a plethora of services, such as monitoring with Watchman Monitoring, system updates & office updates with an RMM, backup to Backblaze, password management with ITGlue, and inventory with YourComputerInventory. These are all services you probably are already paying for, and so giving your clients access to these tools provides them value. On top of the monthly fee for the Pro plan, you still can charge per hour for work provided. This will allow you not to have to stretch to make the client profitable.
For your Maintenance plan - it’s just that. Provide all the items included in the Pro plan, and take care of the computers as well. Many will think this is an AYCE plan but it’s not, as you should be charging for every time a new computer is brought on-site as well, and then increasing the monthly amount. If a computer leaves the site you should be lowering the price. What is not included in here are projects, such as moves, new server spin-ups, and big migrations. Those should always be quoted and billed independently.
So let’s put a real-world example here.
Pretendco has 10 computers on their premises. They use Google drive for their file sharing and G-mail for their email. You think they wouldn’t be that much trouble.
You could put them on a pro-plan and charge $50/computer - which will net you $500/month in recurring revenue, and then charge hourly.
Appleseed Inc has 10 computers on their premises. They have a Synology on-site for their files and use Office365 for their email. You have met their team and can tell they will need more hand-holding and support. They also want to switch to a cloud-based server.
You can offer your maintenance plan at $120/computer per month (don’t forget to charge for the server) making $1320/month. Add in features such as email backup and Dark Web monitoring to increase that contract to almost $1600/month. Then, when a new computer comes on-site, charge $120 once and then increase the contract by $120 bringing it up to $1720/month. On top of all that you can charge for the migration to the cloud server as a project.
While it’s easy to price completely on the number of computers, what brings in the extra money is all the services you should be providing on top of “computer maintenance.”
You should be selling your clients on:
• Dark Web Monitoring with ID Agent.
• VoIP management (you manage their phone changes for them)
• Single Sign-On - provide them a tool to do this
• Internet services and VoIP services (become a master agent)
So even though there are only two major ways to bill your clients, there are many avenues you can take to ensure that each client is profitable. Plus, your clients get some flexibility in choosing how they would like to be billed, which improves your likelihood of closing the business in the first place.
However, you are billing, you need to ensure you have a contract with the client to explain what is, and more importantly, what is not included in your monthly fees. I'll tackle that topic next!