It’s Joshua Feinberg from ITConsultantCompany.com. And I’m here to talk with you today about how IT consultant companies can determine their IT audit prices.
IT consultant company factors for determining IT audit prices and particularly we’re going to look at five tips, five best practices for pricing out you initial IT audit technology assessments that you offer to your new small business customers because if you’re the owner of an IT consultant company you’re probably not sure what you should be charging for your initial IT or that’s with your new small business customers.
And now the reality is IT audits are pretty important to the sales process and really an important part of building strong relationships with your new customers. However, for a lot of people pricing and deciding what to charge can be pretty intimidating because on the surface it seems to be such an individual decision. However, scouting around to see what your competitors are charging can often be helpful to figuring out your own prices, but you also need to consider your own expertise, your overhead expenses and who you clients are before you can come up with a structure for your pricing that works best for you and your company. So consider these five factors that can help you determine how your IT consultant companies should be pricing out its initial IT audits for its small business customers.
First is geography. Typically, IT consultants that are within large cities or densely populated suburban areas can come in higher billing rates than those that are in sticks out or rural areas out of the middle of nowhere. Many of these geographic issues are due to monthly overhead or just a general cost-of-doing-business that tends to be higher in densely-populated suburban areas. So first and foremost, you need to factor in geography to your overall hourly billing rates and of course what flows through you to the price of your IT audits.
Second is scarcity or lack thereof of skills either your skills are skills or they’re not. If your IT consultant company tends to focus on a specialty now and obviously is something that’s relatively scares. If you do general computer related work then your skills are less scary and in the same way that a medical specialist like a cardio-thoracic surgeon gets more for an office visit than a general practice physician internist, a company that specializes in say firewalls or virtual private networking will be to able command higher hourly billing rates than a generalist that’s just installing basic PCs and networks.
So second, besides geography make sure that you consider your scarcity of skills or whether your skills are skills, so whether everyone can do what you do.
Third, look at local demand factors. You need to know how busy your competition is in your area and when your IT consultant company starts approaching a 75% utilization rate meaning that you’re doing 30 billable hours/week consistently for months at a time because you’re utilization rate is just a ratio of how many billable hours you do each week relative to a 40-hour work week.
When you get to the point that you’re consistently somewhere in the ball park of like a 75% utilization rate, 30 or more billable hours every week for literally months at a time you can start to firm up your prices. When it’s weaker than that obviously you want to promote a little more and for example if you’re doing nothing on Monday morning but twiddling your thumbs and hoping the phones is going to ring, it’s time to get more aggressive about promoting your services and promoting your company and this kind of scenario, perhaps your IT audit prices should be lower for new small business customers or something that the subsidized was leader. Of course you want to make sure that they are qualified so that you’re subsidizing the right kinds of future potential customers.
Fourth, make sure that you’re factoring your overhead. Think about how much it costs for you to get trained annually, the cost of your lab and testing equipment, how much time and money you need to invest in marketing to up keep your calendar full, your insurance, your taxes, professional service fees that you paid your accountants or attorneys, cell phones bills, electricity, what are the related expenses. Basically, think about all the additional costs that keep you and your business up and running.
Fifth, make sure that you consider your client size. A home-based micro small business will almost always have a smaller IT budget if they even have an IT budget at all than a 10-person downtown law office or 25% accounting office or restaurant chain that has 50 points in sales systems in five or six locations and of course, a 10-person law office will have a much lower budget than a 100 person or 100 employee PC manufacturer, whatever it is, but keep in mind that generally tiny little one shot deal customer don’t spend very much on IT as you start moving into what we call switch spot clients. Their companies that have 10 to 50 workstations, ten to 75 workstations they tend to spend considerably more on IT.
And keep in mind how big the clients of your company are, will determine your IT audit prices. There is a size where customers just simply choose small than need an IT whatever. Let’s say to justify subsidize IT if they are not big enough to have that to have that current period appearance. They don’t have a dedicated server with their overall network chances are they can’t afford the kind of professional service as an advice that you bring to the table. And if they can’t afford that long term relationship if they are not candidate for support contract why would you even want or bother getting started with them under the scenario of initial IT wallet. So while you’re supporting more workstations almost always means more work, these larger clients typically demand more highly skilled support and know that they need to pay a premium for the highly skilled support.
So in this short video we talked about five factors that can determine how much you should be charging of your IT audits. To learn more about how you can get the best steady high paying clients in your area onto your client lists, go sign up for proven tips for your IT consultant company now@ITConsultantCompany.com.
Again the URL is ITConsultantCompany.com.
Transcription by:
Scribe4you Transcription Services