Support Contract

[WordIsBond]

I am leaning to the hourly model because as you say, odd phone calls here are there, how do you bill for that on a daily basis?

All my billing is hourly anyway, but it's definitely better for this kind of thing.

But I would say that the minimum unit of work would be 2 hours, nothing less.

Depends on what kind of support you are providing. For me, it's often a phone call which can run between 5-15 minutes. If I billed two hours for that they would be unhappy. I start the clock running, if it is less than 5 minutes I don't bill. More than that I have a minimum 15 minutes.

Not sure about the discount either as I don't need the work as much as they need it doing.

Everyone is different. It's how you want to run your business. For me, it's not a case of needing the work, it is a case of wanting the contract and not wanting them to be looking to cancel because it is expensive.

And just to be completely clear, it rarely works out to a discount. On average over the last year I've made about 115% of daily rate on support contracts, because most months they use less than half of the retainer hours. Using the model I gave above, you only get hurt if they use more than 6.5 hours a month, and less than 12. Anything less than 6 or more than 12 you make a premium.