| Magnus on Wed, 20 Aug 2003 10:13:07 -0400 |
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I'm in the process of establishing a small tech support / constulting business. I'm sure that I'm not unique among PLUG members in this regard so I'm hoping to draw on the experience of others concerning rate structure (and some other things). That's a rather complex subject, and is largely a matter of what your expenses are and who you are targeting. Small businesses and families are often after the lowest dollar rate. Medium & large businesses may be dismissive of you if your rates are too low! Your rate needs to include all of your overhead, including insurance, taxes (which are considerable when you're freelancing), social security (you're probably only used to paying half), etc. A good 1/3 of your time will be spent drumming up new business for awhile, and you can't bill people for marketing, so your income has to come from the ~2/3 of your time that is billable. I'm currently planning on serving the (very) small business and home user market. The structure that seems best to me is to charge and hourly rate for system / network administration for small business customers while doing custom software based on a not to excede quote. For home users requiring support I thought that a simple ( but detailed ) menu system would be the best approach to avoid the potential uncertainty of hourly charges. I've had some trouble in the past doing things on an hourly rate for small businesses because of scope creep. The client is tempted to ask you to do this or that while you are on-site to do something else, and then they wonder why the original task is taking so long to get finished. Quoting a bottom line price for a project will give them a warm fuzzy about having predictable costs, and give you a very good reason to defer distractions as they are out of scope for the current project, and you'll need to re-negotiate the pricing to include additional work. This way, both sides of the relationship have clear expectations for the cost and outcome of the work to be completed. Also, this gives you an incentive to get the work done more quickly. The client will have no reason to believe that you're playing the clock in your favor to drive the invoices up. Has anyone else gone through this process and if so do you have any reccomendations? I think that the prices that the market will bear are pretty consistent throughout the Delaware Valley so geographic location is of little significance. I would tend to disagree. Overhead is higher working in the city, so my consulting rates for working on-site in the city go up above my suburban rates. Also, as a (rather fanatical) Linux user myself, I'd prefer to run my business entirely on Linux and am therefore researching accounting systems that will allow me to do so. There are a number of good candidates available. The real problem comes when looking for other types of business packages. For example: Is there anyone using Linux exclusively for running a small business including proposals, quotes, invoicing, and billing? What about marketing publications? Ultimately I used the best tool for the job, which wasn't always Linux. I used a Palm V to track my hours, and then had a machine running Windows for no other purpose than to run Quickbooks. Before you use an OSS accounting package, make sure your accountant is going to be cool with that. There are packages out there for Linux or *BSD that look good, but I'm not willing to risk compatibility issues exporting to Quicken/Quickbooks format and end up losing big $$$ over it. My question is this: Do the other small business consultants on the list have any reservations about putting a Linux system in front of a novice user? Please give some detail about factors used when making the o.s. choice. There was a medical practice that I did a lot of consulting work for last year, and one of the partners was very open minded. We put a couple of Linux desktops in front of technophobic users, and they had no problems figuring out KDE. Unfortunately they had some software for interfacing with specific hospital systems that would only run under Windows, and WINE was too klugey to put into production. That client is now running almost all server services on Linux and OpenBSD, and has one Windows server remaining to handle mammography software that only runs on Windows. Much of the remaining clinical software is now running on Linux, and not only saved them a bundle of money on licensing costs but also has cut much of the workflow down from a couple of days turnaround to about 15-20 minutes. Not only that, the tremendous amount of floor space they were leasing for records storage (thousands of square feet) could now fit in a single server rack. Linux scored a big win here. As long as the software in question is fairly mature, stable and well maintained I usually have no reservations about considering it for a proposal. I think that in the open source community there is sometimes an unhealthy level of enthusiasm for unstable software in business. While it's fine to run this software at home and contribute to the ongoing development efforts, more discretion needs to be exercised when your business partners are relying on your judgment to put together a stable solution for them. -- C. Magnus Hedemark http://trilug.org/~chrish PGP Key fingerprint = 984D 9A88 3D60 016F BE01 1506 60FB 85E1 9ABD 96F6 Attachment:
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