Made my first business mistake

[JoyDivision]

I have under quoted for a job to supply a PS/2 laptop sized keyboard and supply and install a WIFI card.

It has taken me an hour to get the parts and I am only making £23 profit on it including installation.

Hopefully next time I will charge more :)

I have taken £70 so far this week though :) I booked in two jobs today as well, but none the rest of the week.

I suppose at this stage every penny helps :_)

I charged £45 for my first job which involved formating a Windows 98 computer and re-installing everything, £25 for last nights job which involved increasing the page file size and installing Firefox.

Do you think these prices are fair or too cheap? So far all customers have been happy when I gave them the price.

All I know is my competitor charges £15 an hour, I work to £20 an hour but I charge a bit less if the job drags out.

[Rob Holmes]

Who are your clients Joydivision?

Where do you get them from?

How likely are you to sort their problem out?

How quickly can you visit them?

These sorts of things make a difference as to how much you can charge :)

Rob

[JoyDivision]

So far they have all been domestic, with the client that phoned today I at her house two afters after she phoned but that was because she was local. Normaly it takes at least a day unless its an emrgency which I will charge a bit more.

If I don't sort the problem out I don't charge :) All business so far has come from leaflets.

[fastfences]

Good going JD. You tend to get a 'feel' for your prices after a while. If you're getting heaps of conversions (job from enquiry) it shows your prices are bang on or maybe even a little cheap. If the conversions are slower or nonexistent, you're too dear. You're on the right track, always best to start cheaper and when you have a few booking just up it by a £1.
Ensure you charge covers travelling time, but try not to tell the client you have a 'call out' fee or anything like that. I think most of us hate 'add-ons'. The old sayin, 'short & simple.'
Cheers, Nigel

[sparklyscotty]

Just FYI, when a virus hit my business PC, I had to pay £65 to have it wiped, and Windows reinstalled. That was dropping it off at the shop and picking it up a day later, which definately cost me too. I think your prices sound very reasonable, but you need to make sure that you are actually making your hourly rate. I have an hourly rate and then round it up.
-Angel-

[DuaneJackson]

JD, how are you currently working out what to charge? Do you have an hourly rate and you estimate how many hours it'll take?

If so, how did you come up with your hourly rate?

Lets say it's £15 an hour - after you deduct the time you spend on other things and also the fact that you are not working all day every day then you can resonably expect to get 15 - 20 hours of paid work a week. Thats - £225 - £300 a week. Would you be happy to earn this including covering marketting costs and all othe rbusiness outgoings? If so, and if you can get those 20 hours work then you're fine.

[Pebble Communications]

I think you are too cheap as well. As the last post said, your hourly fees have to cover a lot of things other than your physical time at the client's home. A few people balk at my daily fee and I can see them adding up how much they think I earn in their heads, but in reality I'm only charging for an average of 3 days per week - the rest of my time is spent on admin, marketing, spending a lot of time talking to prospective clients on the phone, putting together individual proposals for larger contracts (can take me 2 days per proposal without a guarantee of getting the work), going to meetings, training to keep my skills up to date etc etc etc. Then there are all my overheads like advertising, phone bills, internet bills, stationery, petrol and travel, capital expenditure on equipment, professional subscriptions I have to have...

Are you taking everything into account?

Don't compare yourself with a competitor who is an 'amateur' or just doing it for a bit of extra cash. Treat and rate yourself as a professional. Most IT people charge a lot more than that. I had a problem with a really impossible to find and remove spyware and the IT person I booked to come and sort it charged £200 a day. Actually I then grabbed my teenage son and he did it in about 3 hours, so I cancelled the IT guy, but there you go. The offices I am based at use an IT service that charges £55 per hour (but I must admit after his last bill they are reconsidering. It used to be a more reasonable £30 per hour).

[Rob Holmes]

Joydivision,

If you call out a plumber or a washing machine repair guy they'll charge around £70 to knock on your door then £50 an hour to do their stuff - I wouldn't underprice yourself - it's VERY hard to up your prices wuth existing customers once they get used to paying you a certain rate.

Rob

[seabro]

Joy,

As a market research excercise I phoned 20 local computer companies recently and found the average was between 45 and 55 an hour.

I charge 40 and it is very competitive if not cheap.

I did find a guy asking 20 but he did sound like a little kid.

Think of it like this.. if someone is going to call you, and your gonna come out and fix something for them, they cant surely be thinking of parting with less than £50..

I had a call this afternoon who said she is struggling to get her broadband working, I considered it a 20 minute job so I quoted her £47 (I have to charge VAT) and she said she would think about it. She might get cheaper if she phones everyone in the phone book but I know for sure there are alot of cowboys out there.

I think you are too cheap. Good luck.

[pierce.lynch]

But there is also something else I would consider with regard to this JoyDevision.

What exactly is your target market, or that in which you intend to provide. Is it commerical, business clients or your general domestic house calls fixing the family PC?

If your going down the route of domestic family then sometimes it might be hard to gauge a suitable price. For example, lets say you charged 50 GBP per hour and could get in about 10 hours a week at that price. But what happens if you get in 20 hours at 30GBP per hour and easily get more interest. Thing is there, more so with domestic is to try and be a little bit fairer on pricing cos a lot of personal clients won't be able to afford big bucks. And if you can do it for a reasonable price compared to your average 'pc world' clinic then well you should be winning because it saves the client a lot of hassle you coming to them!

On the other hand, if its business clients your looking for then you can afford to charge that much more as businesses are able to afford services like this better than a home user.

It might be worth just having some kind of structure in your head when it comes to the type of job like that - but this may be complete rubbish.

Just thought I would add my 2p!

[JoyDivision]

The problem is the £45 job was well above my hourly rate, but it took me 35 minutes to decide that it was not worth spending any more time on and it was easier just to format it as that was guarenteed to solve all the many problems.

The first 35 minutes then I could not really charge for because I didn't do anything. The actual PC hardware was worth less than £30 so it would have been hard to expect the poor bloke to spend any more than £45.

The job I did last night I charged £25 for which more than covered my costs. Tomorrow though I am supplying a laptop keyboard, installing wireless card and removing some stuff from startup all for £22 profit, clearly I have way under charged here :(

I need to make £150 a week profit from it as I am also planning to do a part time training course so I can work part time as a lecturer.

As I guide I charge £20 an hour but it really depends on the job. Half the jobs so far have been walking distance form my house.

I personaly think plumbers are a big rip off and go out of the way to all stuff like that myself, we only ever use plumbers for Corgi stuff (e.g gas).

The way I see it at this early stage the more customers I get the more chance I have of developing a reputation and getting commercial contracts.

PS As a guide my local plumbers tend to charge around £30 an hour, unless they have a flashy yellow pages add.

I think in future I will just make sure I get my £20 an hour for jobs. Remember I live in a very densely populated area so traveling costs are not really an issue.

If I had to drive 30 miles for the job then clearly I would not be able to charge £20 an hour.

[c4l]

I always say that the proverbial does happen!!

I remember when i had to pick up a Lotus Elise in Hull and drive it to Portsmouth docks. Had to be at Portsmouth by 6am and because of the road tax on the car - i.e. being run on dealer plates - i couldn't leave it parked up - so had to pick it up in Hull at 11.30pm and take my time down to portsmouth to land by 5.45am. But the dealer wouldn't agree to this - he wouldn't open up for me at this time. I therefore had to collect at 6pm, take my time down to Portsmouth - very hard in a fast Lotus! - and then 'hide' at a service station.

Job was done ok but i mega-underquoted - tricky customer - ended up with £25 extra than my normal fee where i don't have to do any delivery of cars whatsoever!! This used £30-40 of fuel, a train trip to Hull and then from Portsmouth back home, 2 days work because of the time, and a lot of service station coffee and red bull to keep me awake!!

Lesson learned though - never done it again!!

[Pebble Communications]

Perhaps you should think of working a bit further afield. Your local area (no offense) sounds like quite a poor area so you might be better off looking for clients further out in middle class or yuppified/gentrified areas. Your ideal client is cash rich/time poor and you can charge them a lot to take some hassle off their hands.

If your local area isn't as poor as you are making it sound, but a normal working class area, then you are still way undercharging.Anyone working - they should pay a decent rate for you. Don't make assumptions about people's income. How many of these houses have a £40 a month Sky TV, fast broadband, one or more cars, holidays abroad, spend £300 per kid at Christmas, etc etc.

Anyone living solely on benefits can't afford you. Full stop. Someone expecting to get a cost-effective repair of a £40 item just isn't being realistic. If I take an old banger down to a garage (thinking a few months ago) and it is not economic to repair a decent garage will tell me. They won't do tons of work and charge me more than the car is worth, but neither will they bankrupt their own business by feeling sorry for me and doing it at a huge discount. I think you need to decide whether you are running a business or a public service...

[cjd]

I had a serious look at the PC repair business a year or so ago and concluded it doesn't make much commercial sense to do home visits.

There's two dificulties - traveltime and travel cost & then you can only work on one PC at once. As most of the time PC repair is waiting for software to install or running test/repair software you are spending only a fraction of your time actually working.

I suggest you look at models where people bring their PCs to you or you set up a pick up and delivery scheme (charged for of course). That way you can afford to charge sensible fees by working on several PCs simultaneously.

[JoyDivision]

The problem with that is you need to ask client questions all the time.

A lot of people don't want the hassle of disconnecting their PCs and lumping into a car as well.

In situations were I have to install SP2 or do a virus scan I will leave that running after I have gone rather than sit and wait for an hour.

Also my area is anything but poor, it is one of the most expensive places to live outside of London but that means many people are mortaged quite heavily.

Victorian 4 bed semis can easily go for £500k.

55% of people living in the my target areas are educated to degree level (but often nothing to do with computing and they are clueless when it comes to technology), there is also a high amount of managing directors but on the other scale there is a lot of students.

Where I live is a bit like Kensington in London, expensive, but a real mixture of rich and poor and they easy to get around without a car.

I am clearly under charging though, I have worked out one of the jobs I am doing today is costing the customer less than it would at PCWORLD plus they are getting labour as well.

I have little running costs.

[cyberdog]

Hi,
I am a bit off topic with this question so I apologise. I have started up a small computer repair business and would like a bit of advice. If I was to repair a computer and for some reason I lost some of the customers data from the hard drive. What would be the implications for me, ie, can I be sued. Also should I have some “SMALL” print saying that any loss of data is not my responsibility?

This problem has not yet come up, but it must have happened to someone and I would just like some advice on the subject.
Thanks
:?

[MinuWeb]

does your £20 per hour include VAT ?
If you are not yet VAT registered will your clients get a 17.5% price hike when you do ?