Technology & MSG

I’ve been thinking about my pricing model for side work; specifically I’ve been debating offering monthly plans either in conjunction or instead of a flat hourly rate. Despite not being a fan of monthly service contracts, they make sense for the industry and potentially for me and my clients.

I have a full time job and a relatively small — but geographically disparate — client base. The client base is primarily composed of small businesses that require troubleshooting and preventative maintenance of their workstations. I don’t deal with my clients while I’m at work; it’s unethical and against company policy, however if I get an emergency call there’s rarely a time when I couldn’t clock out and go to my car to speak with a client. I prefer to avoid this altogether and do side work in the evenings; this ensures that there are no interruptions on my part to the client’s operations and as a bonus it doesn’t conflict with my full time job. I do daytime work on a best effort basis; my job takes priority, but there are some slow periods where it isn’t a problem for me to take leave. I currently lack a structured method to decide when to leave my job early to go do side work.

So I asked myself a few questions and came up with some ideas. I’m now trying to piece them together into a coherent plan.

How do I encourage clients to call upon me?

By charging a monthly fee for a preset number of support hours, I’m not just “that guy that we call if we have a dire problem.” I’m now a service provider whose time they are entitled to. I would think that clients would be more likely to call if they knew that my time was prepaid.

How do I not offend existing clients?

Some people don’t like contracts. That’s fine. I don’t require that anyone pre-pay for a monthly plan. If a client wants to pay by the hour every time, that’s fine. I don’t intend to enforce a contract for a set number of months either. I’ll send an invoice to a client on the 15th of the month for the next month’s service period. If payment is received before the 1st of the month, they get the plan rates. Otherwise they’re billed hourly. If they know they’re coming up on a busy time and want to purchase a larger chunk of time that month, they can do so easily.

How do I encourage phone support?

I encourage my clients to learn by example. When I fix problems, I try to teach the client how to fix the problem in the future. If not fix the problem, troubleshoot a bit so they have a good list of symptoms when they do call. Some would argue that it isn’t great for my job security, but it alleviates calls for simple tasks that the client can do themselves. By charging a flat rate for a site visit, I subtlely encourage clients to fix the simple problems themselves. Clients also can rest assured that I’m not trying to gouge them to fix problems that they themselves could be fixing.

How do I prevent being called away from my job during the day? or from home on the weekend?

All client matters are important, however I need to weigh their importance against my time. It takes time to drive from home to a customer site; time away from the office is time not on the clock. For example, I wouldn’t want to leave my job early and drive 40 minutes to find that they need their hard disk defragged. It’s something I could have talked them through over the phone.

Likewise, I can do a lot of administration tasks remotely. If someone needs an email address created, chances are I can do it from home. There’d be little reason for me to come in to do so.

Both can be managed by fee. Would I be willing to take leave if a customer had paid me $25 for the month? Probably not, since the time to get to the client site, fix the problem and return would probably be less than the amount of leave I’d have to take from my job. What about $200-300 for the month? That might be a different story.

How do I prioritize client requests?

In the past I would use the FIFO method for handling client requests, however some clients will insist that you be available to them. By offering different tiers of service, clients can effectively bid for your time. When two clients with the same tier of service require services at the same time, I think that the oldest (that is, how long they’ve been my client and not their actual age) would take precedence.

How do I earn a more regular income?

In short, I don’t. Without long term contracts, there’s no guarantee of regular income. This is the case for all contracting. Even if you do have a contract, checks bounce, businesses goes out of business. The monthly rates give the client a chance to get a price break on prepaid hours and also give me a better idea of what I’ll be earning, but only if they decide to continue the service.

Here’s a chart of what I’m playing with. The numbers aren’t actual. The numbers do represent the type of discounts that monthly rate clients would receive, the relationship of the fees verus the hourly rates, etc.

I offer evening phone support and onsite visits to all clients. The Tier 1 plan offers a discount on the hourly fees, the Tier 2 moreso than the Tier 1, etc. For all but the Tier 3 plan daytime phone support is provided on a “best effort” (BE) basis and a daytime on-site visit results in a charge. Depending on my workload or desire (or lack of desire) to do daytime work I can adjust the rates according. Supposing I make $500/week at my primary job, I can easily justify taking leave for a day if a client is paying $150 for 5 hours of labor.

My proposed structure is far more complicated but it could help provide a regular and recurring income for me, a sense of security fom my clients, a manageable number of financially justified interruptions to my day job, and help me get a better handle on my time.

Any thoughts? How do you bill your clients?

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