Ask HN: Forming an IT service organization, how much do I charge per month?
4 comments
Is $60/month enough for such a service?
No. Not even close. $60 a month is cheap for best effort support via email 24 business hours later, rather than on-demand phone support 7 days a week.
Consider from the store's perspective. "My database is corrupt." means "We can't process transactions and are losing $15+ per minute", right? That sounds like it's worth closer to "What you pay for insurance every month" rather than "What you pay for toilet paper every month."
I'd be inclined to price this in the hundreds per month for virtual intervention. After you get a few clients under your belt, I suspect that while it might be priced monthly it will be sold yearly. (i.e. It's $500 a month, you want to buy it, OK, I'll invoice you for $6,000 for your first year of service and if you want to continue it 11 months from now I'll invoice you for another $6,000.")
Local hands-on assistance available "at preferential rates."
So if I hire a $35,000 a year help desk employee - I've got approximately $6K a month left in revenue to work with.
I'm not aware of your location, which makes it difficult to calculate this with specificity, but you should know that a $35k a year employee will likely cost you closer to $50k all in. You will be responsible for payroll taxes, contributions on unemployment insurance and worker's compensation, etc etc. I also think you're underestimating your staffing needs by at least 0.5 FTEs. (Consider: your employee gets a standard offering for holidays/sick days/vacation, right? Do databases just agree to not corrupt themselves when she's on vacation or do you need to plan for availability then?)
No. Not even close. $60 a month is cheap for best effort support via email 24 business hours later, rather than on-demand phone support 7 days a week.
Consider from the store's perspective. "My database is corrupt." means "We can't process transactions and are losing $15+ per minute", right? That sounds like it's worth closer to "What you pay for insurance every month" rather than "What you pay for toilet paper every month."
I'd be inclined to price this in the hundreds per month for virtual intervention. After you get a few clients under your belt, I suspect that while it might be priced monthly it will be sold yearly. (i.e. It's $500 a month, you want to buy it, OK, I'll invoice you for $6,000 for your first year of service and if you want to continue it 11 months from now I'll invoice you for another $6,000.")
Local hands-on assistance available "at preferential rates."
So if I hire a $35,000 a year help desk employee - I've got approximately $6K a month left in revenue to work with.
I'm not aware of your location, which makes it difficult to calculate this with specificity, but you should know that a $35k a year employee will likely cost you closer to $50k all in. You will be responsible for payroll taxes, contributions on unemployment insurance and worker's compensation, etc etc. I also think you're underestimating your staffing needs by at least 0.5 FTEs. (Consider: your employee gets a standard offering for holidays/sick days/vacation, right? Do databases just agree to not corrupt themselves when she's on vacation or do you need to plan for availability then?)
To what extent could you eliminate on-site failure points and/or build-up on-site redundancy? The reason I ask is that maybe the question shouldn't be about hiring more people for on-site failures but instead planning for up-front costs to build-up redundancy at each location (ie RAID, virtualizing, better networking equipment, IP-KVM's, etc.).
I know local hardware failure will never be completely eliminated but your pitch could be "look, I'll provide your much better IT than you'll find locally at a much lower cost but to make this work we have to invest in your hardware to build-up redundancy and backup systems."
I know local hardware failure will never be completely eliminated but your pitch could be "look, I'll provide your much better IT than you'll find locally at a much lower cost but to make this work we have to invest in your hardware to build-up redundancy and backup systems."
As much as you can do remote support. Charge incident packages. You should structure the fee/cost structure like insurance. Pay more monthly, get more service, lower out of pocket costs.
definitely higher monthly fee
cap the number of support hours/incidents
assuming only a small percentage of incidents require physical intervention, contract out to part time local tech even if their per incident rate is high
What I have discovered is they have left their franchisees out to dry by not continuing their IT support. I was sure they were going to hire someone else, but they didn't. They are on their own. They have to find IT support locally, which from what I am hearing has proven difficult for them. The software vendor doesn't offer quality after hours support. There is definitely a need I can fill here.
About 50% of the stores are using Quickbooks POS and the other half is using a industy specific point of sale solution which I am an expert in.
What I would like to do is call every one of the store owners and offer my services, introducing my new IT organization. They know me, they all like me, and would be willing to pay a monthly fee I am sure of it. It easily a $100,000 a year business if I only charge $60 a month.
Where I am lost is:
How am I going to handle issues that require physical intervention? (Sourcing local contractors) Should I charge a call out rate for this and pay my contractor a 1/3 or a 1/2 and keep the rest? Better yet, how am I going to find these contractors and present such a job to them. If I go through another company, they are sure to charge me a high market rate for their technician.
Is $60/month enough for such a service? The phone lines would have to be available from 9am to 9pm Monday through Saturday and Sunday 11am to 7pm.
I need to keep my employees local, I cannot outsource. So if I hire a $35,000 a year help desk employee - I've got approximately $6K a month left in revenue to work with.
Common issues would be: My receipts won't print, I can't find report X, my database is corrupt, I have these stupid pop ups, etc. Easy stuff.
Thoughts?