I’ve met a lot of Independent Computer Consultants over the course of my career. While a few continue to thrive in their Independent practice, and a few others have grown their business into larger, successful computer support firms, the vast majority will give it less than a year before they give up and begin actively searching for a job again.
Almost every small business today that relies on computer systems, needs someone qualified to maintain them. The demand for affordable solutions for maintaining and supporting small business computer systems is huge. Today, every small business owner is looking for ways to reduce costs, and the Independent Computer Consultant is perfectly positioned to offer an excellent level of support that costs less than alternate solutions like in-house employees or larger IT Support firms.
So with such a strong potential market and with the Independent Computer Consultant able to provide a much needed solution, why is success for Independent Computer Consultants so rare?
Because they follow a standard, but wrong, hourly support billing model. If you want to join the majority of your colleagues and struggle briefly before you decide that being your own boss is to difficult and unstable and decide to call it quits, do like they do and follow these three simple steps.
STEP 1: BILL BY THE HOUR
Ask 100 Independent Computer Consultants what their hourly rate is and almost every one of them will be able to give you one, probably ranged somewhere between $75-$150 per hour.
How many will tell you, “I don’t charge by the hour. I charge flat, monthly rates.”? I’m betting not many.
Basing your income around how many hours you’re able to accumulate on a regular, monthly basis is a challenging and generally unstable situation. Due to the very nature of hourly rates, a cost-conscious client (and what client isn’t cost-conscious today?) will always be aware of the time you spend on-site. And they’ll be hoping to reduce it whenever and wherever possible.
They’ll hold off on addressing “smaller” issues, judging if an item like connecting a user to a network printer justifies having you in for your hourly rate. Unfortunately, these little problems have a large negative effect on your client’s productivity. When their productivity suffers to the point where it hurts them financially, they’ll notice. And they’ll be quick to blame the systems that you’re responsible for maintaining.
Even if these small issues only amount to a few minutes a day for you to address, because they can get you in the door to work on other issues, these daily occurrences are generally the items that can make up the foundation of the hourly, computer consultant’s salary. But with the client often looking to reduce these hours, this conflict can make it difficult for the consultant to properly maintain the systems and generate a reliable income.
And when a BIG problem occurs, such as a server or major email outage, your client’s stress will be compounded by the fact while they’re productivity is at zero, they’re spending hundreds, if not thousands of dollars to have you fix the problem.
Billing by the hour creates a win-lose environment. The client has computer problems, they’re unhappy, but the consultant makes more money. Fewer problems means a happier client, but a poorer consultant.
STEP 2: PROVIDE REACTIVE SUPPORT
If you’re billing by the hour for on-site support, you’re generally waiting for someone to call you with a need or problem for you to address. Hopefully you’ll be able to strike a balance where you’ll have enough clients with service requests to keep you busy, without too many clients demanding you simultaneously for “critical” requests or unexpected emergencies.
This is a difficult balance to find, and the downfall of many new computer consultants. If you have too few clients, with few problems and a minimal budget for improvement projects, keeping busy enough can be a challenge. When things are working smoothly, you may be tempted to call your client just to “check in”. But this can often be viewed negatively by your client as you possibly “fishing” for a few extra billable hours. Hitting a few slow months in a row can make for a very unreliable income.
Land yourself too many clients though, and you might be busier than you bargained for. Find yourself unable to provide support fast enough and you’ll have dissatisfied customers. Fail to respond to a client during a real emergency because you’re addressing another client’s emergency, and odds are high that you’ll lose more than just a few billable hours.
If you put a good server monitoring system in place, you can potentially eliminate most of these problems. If you monitor the server proactively, you can catch items like failed backups, low disk space, hardware failure alerts, etc. This will reduce unexpected emergencies and allow you to schedule your time much more reliably.
Monitoring will also let you identify issues that might have gone unnoticed until they escalated into a real problem. You don’t need to wait for your client to tell you what work needs to be done. You can review the server logs and let your client know what problems exist and need to be addressed.
The problem with proactive monitoring under the hourly billing model is… what if it works?
What if you’re able to clean up their systems to the point where problems are rare? Will you still be able to maintain a busy enough schedule with only the day-to-day minor user issues to address?
What if the opposite is true and you find problems popping up almost daily? While it’ll be easy enough to bring these problems to your client’s attention and hopefully they’ll appreciate you identifying the problem early, there’s also the probability that they’ll question why all these problems are occurring and why suddenly you need to spend so much billable time on their systems.
And of course there’s the question of how to charge for proactive system monitoring under an hourly-rate support model. Whether you charge an hourly, partial-hour or flat-rate for your monitoring service, unless the client sees regular, clear evidence of the effectiveness of your work, they’re going to question whether this extra expense is a necessary one.
If monitoring helps to identify problems and keeps you busy, your clients will potentially be asking why they’re spending more money now than before you started monitoring their systems. “Wasn’t the monitoring supposed to reduce problems and save me money?”
If it helps to keep their systems operating at peak performance, they’ll be happy, but your income will suffer.
Being proactive is a real challenge when operating under the hourly-rate business model. It can have a negative impact on your immediate income, but it gives you the best chance for satisfied clients.
Yet another conflict that the hourly-rate computer consultant must figure out how to overcome.
Reactive support however, is basically waiting for things to break in order for you to survive. Which for a computer consultant hired to keep things running, is career suicide.
STEP 3: PROVIDE ON-SITE SERVICE EXCLUSIVELY
Naturally, you’ll need to visit your clients on a fairly regular basis. As an hourly-support consultant, if you don’t see your clients, you don’t make money. If your business is built primarily around having to be at your client site to be able to support them and to generate your income, then it’s in your best interest to be there as often as possible. Of course, your client wants to see you there as infrequently as possible.
This conflict alone is enough to prevent someone who’s starting a computer consulting business from ever succeeding.
And there’s always the possibility that two of your clients might need support at the same time. If you’re not monitoring your clients proactively as discussed above, the chance for unexpected problems to arise is high. Two simultaneous emergencies happen often enough when you’re supporting multiple, unmonitored networks.
What if it’s not even an emergency, but a simple request to clean up a workstation that’s been getting pop-ups. But the call comes in while you’re working on a project and you have another service call waiting and you won’t be able to make it down until a day and a half from now. This doesn’t do much for customer satisfaction, let alone the possibility that your client may not want to wait for you and finds another way to resolve their problem, which will lose you some billable time at least (and maybe lose you a client at worst).
A simple solution would seem to be to provide remote computer support. Doing so gives you the ability to essentially be at two places at once. You probably won’t attempt to do an SBS migration remotely, but you certainly can start a malware scan remotely at one client while on-site at another (of course, if you’re billing by the hour, you need to be very careful about who’s clock you’re on when you’re doing remote work from a client site).
Providing remote computer support could definitely improve client satisfaction. In addition to being able to provide nearly instantaneous support, your clients will also be seeing you less often, which we know is what they want when being charged by the hour.
So unless you’re billing properly for remote support, you’ll be losing some income.
But under the hourly rate billing model, how do you charge for remote services? By the hour? In 15 minute increments? What if the support call takes 10 minutes to resolve? Do you charge for it, or do you chalk it up to providing “good customer service”? How many billable hours might you be giving away over the course of the month? How many of those calls could have led to additional billable time had you have gone on-site to provide the service? By not having to go on-site to resolve the day-to-day, minor issues, would you still be able to maintain enough hours of on-site work per week for each of your clients?
Let’s say you charge $125/hr. and you have four clients for who you provide a total of 2 hours of work each, per week remotely. This would be a fantastic gig for you… for the remote work alone, you’d be making $48K annually, while working about 8 hours a week, mostly while wearing your pj’s.
But I guarantee you, if you consistently send your client an invoice for 8 hours a month, and they can’t recall the last time they’ve seen your face for more than a few hours, it won’t be long before questions or suspicions arise as to the need or validity of your service.
Whenever you provide remote support, stellar record keeping and reporting is critical. However, even with detailed reports, if your client is paying for a substantial numbers of hours each month for work they don’t actually see you doing, they’re going to want a very high level of communication or other supporting evidence of your work and the time involved.
Once again, you’re faced with another conflict where you’re trying to do your work, and the very nature of your billing arrangement causes your client to question your work.