How To Charge My Client

[Ignite]

Hi All

I'm a contractor and working for a landlord in London, and my client has multiple sites and I'm giving the task of designing and implementing a WiFi network at each location, including the cabling.
I currently have a network support SLA in place with the client, and I charge per network equipment, excluding the access points, per month, per site. Callouts are charged on a PAYG basis. After the initial WiFi installation, any extra work is billed separately to the requestor.
My client provides WiFi access to all his tenants as standard and tenants wanting their own internet providers are permitted to do so without any issues.

Moving forward, my client is in the process of acquiring new premises and planning to start charging for some internet access. Example, wired internet connection, public static IP addresses and tenants wanting their own isolated WiFi internet access.

My concern is that this is going to be more demanding and I will spend most of my time working for this one particular client on a full-time basis, as he's not looking to slow down anytime soon and he's expanding rapidly. He's already asked me to give him my rates to implement a network where he can charge his tenants on a monthly basis, and I'm looking for some good pointers on how to charge him. Obviously, I don't want to overcharge him and on the other hand, I don't want to under charge. I want to have a good balance for myself and my client.

I'm thinking of charging him a small fee per month per tenant's setup, as this will be a managed service and I will have to make myself available upon the tenants' request to assist with any network issues. Some of these premises will have up to 50 plus individual businesses.

Thanks in advance

[northernladuk]

The one thing that concerns me in all that is the making yourself available to fix stuff when there are 50 clients. Do you have a forecast of exactly how much time this might actually take? You could screw yourself over if you end up getting called out a lot more than you expect.

[NotAllThere]

Please, if you're not going to make a constructive contribution, then don't bother leaving any comments.

This is a public forum. So long as people don't violate the T&C, they can comment whatever they like. Making that kind of statement increases the chance of non-constructive comments,

Sounds to me like you're in an ideal situation to expand by taking on an employee or two. Or hiring other contractors.As NLUK implies, you musn't spread yourself to thinly. What will you do when you take vacation? Or if you're sick?

Work out how many calls you're likely to get per month, and work out a pricing plan. Look at others businesses similar to yours and see how they charge.

[LondonManc]

NAT makes a good point about downtime - do you have a subbie who you trust? Could be useful long term. Don't let them near the deal, just the work.

In terms of charging, consider what makes sense to you - if you have to be onsite, factor in exclusivity, but don't take the mickey. We could suggest a day rate that's too high or too low because we don't know the going rate in your market. How long do you expect this to last? Just as importantly, how long do you want it to last? Is this what you want to do for the next few years? Is it only worth doing at a certain price point?

[WTFH]

If it's just one of you, with no substitutes/backup, then I'd be concerned about penalty clauses in SLAs

Other than that, if you're only working for one client, you're happy with the job, happy with how much you are getting paid, and not doing anything underhand with regard to tax & NI, then why not stick at it?

[Lance]

I'm not exactly sure what your question is. Using a '?' to end a sentence usually helps clarify...


Anyway. The question in the subject of how to charge is easy. You invoice them, but I reckon that's not what you're asking.

Here's how I'd approach it
Write a business plan. Sounds dull but you need to look forward, maybe 5 years, at what you foresee being your workload, your costs, your profits, etc.
Write a resource plan driven from that business plan so you should know when you need to employ people based of when you can afford to and when you'll need to. If the plan suggests that you can't afford to take people on when you need to then you don't have a business. In that scenario increase the price or give up. HINT: This is not a new idea, and it's incredibly difficult to make money unless you can scale it massively (10s of thousands of subscribers if you don't just want to become a tulipty little cottage industry).

You should be able to model your business growth, based on the client's growth. Factor in best and worst case scenarios. And track it from day 1. If after a year you're well behind the target consider whether it's working.

Also SLAs..... are you crazy? If you can't get an SLA from a provider then you shouldn't pass an SLA on to the client.
If you can get an SLA from a provider, you need to map its capability onto your clients and also ensure that any penalties you might incur are also penalties that your provider incurs so you have cover there. It's NOT easy to do this and why it's really hard to get SLAs on domestic internet feeds.

You're becoming an ISP now. So you have lots of legal obligations that will vary. GDPR being a major one to consider. I've not worked in that space for a few years now so have lost track of the regulations but it's a LOT more complex than it used to be.

I could go on........

Personally I'd not touch it with a bargepole. You'll earn more money doing a job. It might sound tempting, but without the scale it's hard. And unlike the property side of this venture, you have no assets so no value in the company other than the contracts, and they ire individually not much.

I can also tell you that you'll not be able to compete with the big boys. Look at how cheap 4G bandwidth is getting. And it's getting cheaper every year. And faster. Can you provide gigabit services for £20/£30 a month? If not then you have a major problem.]

You've missed the boat by about 2 decades IMO

[Ignite]

If it's just one of you, with no substitutes/backup, then I'd be concerned about penalty clauses in SLAs

Other than that, if you're only working for one client, you're happy with the job, happy with how much you are getting paid, and not doing anything underhand with regard to tax & NI, then why not stick at it?

I have multiple clients and want to keep it that way. I'm a one-man company and use subs when I need an extra hand. I'm also a young company and growing my clients base and will be looking into having some more bodies to help out in the future.

I will give an example on how I'm currently charging this client.
Remote Support (Charge is per equipment and on a 12-month retainer)
Router £30 per month
Switch £30 per month

Onsite callouts
£180 per hour (I aim to complete the job within the hour), if going over the hour, I will inform my client.

I want to add £30 per month extra for each new tenant set up my client request.
I will charge separately for the initial setup, but I want to charge a monthly support fee, as this is going to be a managed service which I have to maintain for the tenant(s).
Without knowing how much my client will charge the tenants for the internet, I also don't want to give a price that will out weight what he's going to charge for internet access.

[Ignite]

I'm not exactly sure what your question is. Using a '?' to end a sentence usually helps clarify...


Anyway. The question in the subject of how to charge is easy. You invoice them, but I reckon that's not what you're asking.

Here's how I'd approach it
Write a business plan. Sounds dull but you need to look forward, maybe 5 years, at what you foresee being your workload, your costs, your profits, etc.
Write a resource plan driven from that business plan so you should know when you need to employ people based of when you can afford to and when you'll need to. If the plan suggests that you can't afford to take people on when you need to then you don't have a business. In that scenario increase the price or give up. HINT: This is not a new idea, and it's incredibly difficult to make money unless you can scale it massively (10s of thousands of subscribers if you don't just want to become a tulipty little cottage industry).

You should be able to model your business growth, based on the client's growth. Factor in best and worst case scenarios. And track it from day 1. If after a year you're well behind the target consider whether it's working.

Also SLAs..... are you crazy? If you can't get an SLA from a provider then you shouldn't pass an SLA on to the client.
If you can get an SLA from a provider, you need to map its capability onto your clients and also ensure that any penalties you might incur are also penalties that your provider incurs so you have cover there. It's NOT easy to do this and why it's really hard to get SLAs on domestic internet feeds.

You're becoming an ISP now. So you have lots of legal obligations that will vary. GDPR being a major one to consider. I've not worked in that space for a few years now so have lost track of the regulations but it's a LOT more complex than it used to be.

I could go on........

Personally I'd not touch it with a bargepole. You'll earn more money doing a job. It might sound tempting, but without the scale it's hard. And unlike the property side of this venture, you have no assets so no value in the company other than the contracts, and they ire individually not much.

I can also tell you that you'll not be able to compete with the big boys. Look at how cheap 4G bandwidth is getting. And it's getting cheaper every year. And faster. Can you provide gigabit services for £20/£30 a month? If not then you have a major problem.]

You've missed the boat by about 2 decades IMO

My client is the ISP and I'm the engineer. My SLA agreement is to cover the internal network and not the ISP's network.
My workload will increase and I'm looking for a reasonable way to cover for my time.

Some landlords will not give permission for you to install your own internet or telecoms services on their premises and you would have to use the internet facilities provided by the landlord at a cost, and all this will be stipulated in your tenancy agreement which you have to sign and agreed upon before you can move in. How do these landlords compete with other ISPs?

We don't use domestic internet connections. We used dedicated leased lines from ISP.

[Lance]

My client is the ISP and I'm the engineer. My SLA agreement is to cover the internal network and not the ISP's network.
My workload will increase and I'm looking for a reasonable way to cover for my time.

OK. Still do the business plan though.
I do wonder why the ISP doesn't want to own it all end to end and pay you as an engineer though. Smells fishy but not much detail.

Is this a real ISP or a schonky little outfit pretending to be one?

[northernladuk]

Two out there thoughts for you...

Firstly how much do you make and do you have a plan for growth that will net you x amount of income. Is this more than £400 a day? I see a lot of 10's of pounds here which looks like a lot of effort. Are you making, or can make, more than just going contracting?

If it is viable and you are going to stick with it why not go look at the established bigger players and see how they do it. If you really have to, pose as a customer with exactly the requirements your landlord has and get them to quote you and see how they do it. If it's way over what you do but it's market price then you are kind of screwing yourself over. No point charging a lot less than market price. He's not going to dump you for charging a bit more if the next option is much more expensive. Don't re-invent the wheel, follow the market.