Margins II: Profits

person-holding-coin-1602726The second half of the margin question is naturally, where do you make the meat-and-potatoes of your profit?

The answer lies in clients purchasing a monthly subscription of:

  1. hours of support
  2. per-system monitoring/management/maintenance
  3. software/service administration (MS Office, Adobe, LogMeIn, etc)

Hours of Support

You can automate a lot, but every client needs at least a couple additional hours of your time to handle hardware replacement, random problems, and general support.

If they are willing to prepay for hours, you can give them a discount on your rate and/or offer to roll over unused hours quarterly (or more, if you want), but remember that prepaid hours are a mixed blessing. On the one hand, they make your monthly income more stable and your monthly workflow more predictable. On the other hand, clients often want to use those prepaid hours:

  • on the day before they expire
  • on impromptu projects
  • on a bunch of stuff they’ve neglected to mention, but will want fixed “while they have you on the phone”

The bottom line is that you (most likely) need to sell a certain number of hours of your labor per month, so in the first couple months of service really try to understand your client’s needs both in terms of the direct support users need and the technical upkeep their office requires. Then, recommend some monthly package of hours discounted/and or limited as you see necessary.

For example, maybe you’ll let the hours roll over quarterly, but they only apply to support requests. Or maybe you’ll discount the hours, but not let them roll over. Or don’t discount them and stipulate limitations. It’s up to you, but remember you need to sell the hours, take care of your clients, and protect yourself from clients gaming your system and slamming you with work in ridiculous situations. It’s hard to balance all three, and you’ll need to handle different clients differently.

Per-System Monitoring

This is an easy matter to manage each month: every computer occupies a seat in your RMM plan and is cared for by your maintenance and management policies, which you monitor for anomalies, errors, failures, etc. You want to automate this maintenance as much as possible with scripts and an RMM system that has flexible automation features and you want to set up notifications so that you can review alerts for problems that were auto-remediated and get alerted for problems that need your intervention.

The better you get at this process—which has a lot of variables and will be the the subject of a separate article—the more systems you will be able to manage with fewer support requests from users.

Software & Service Administration

Some software and services that either you retail at-cost or that a client purchases themselves might still be in need of your administration or management. A client might want you to add/remove users/licenses for a MS Office 365 subscription or various others, monitor their cloud backup, and so on for various other hardware and software needs.

It’s advisable to consider these needs separate from System Monitoring and Remote Support needs for three reasons.

First, you’ll have a definite relationship with the service: it’s either in your scope of responsibility or it’s not. Don’t consider “System monitoring” to include “whatever happens to be on a client’s computer” and don’t consider “Remote Support” to include “whatever conceivable issue arises.”

If you’re not supporting it, there’s that. If you are, then you’ll be keeping up with its issues and updates month-to-month, so you won’t be surprised by something you’re not familiar with. It also means your client be able to count on your help and in a moment of urgency, you won’t have either to say that the task falls outside your scope of services or fumble around unprepared trying to fix it.

Second, you’ll have access, in terms of both permissions and passwords. You don’t want a call that “Office won’t open” only to find out their credit card on file with Microsoft expired and they forgot their password.

Third, you can profit from the work. Sure, you can say that X, Y, and Z fall outside your scope of services, but it’s better to gain competency, help your client, and make money, all by effectively managing their needs. Sometimes, though, it’s necessary to say “No,” and refuse to support things you aren’t comfortable being responsible for, either because it’s a poor product or it’s not feasible for a third party to administer or manage the service.

Similarly, charging for administering these services can make up for not charging for the licenses themselves.

In Conclusion

A. Try and keep your overhead down. Don’t sign up for services just because they’ll help you a little or even because they’re very good, until you’re sure they’ll help you do work for which someone will pay you.

B. Office space and its associated costs are expensive. At least consider a cloud-oriented model, a PO Box, or a rented space just for meetings.

C. RMM software can be expensive. Demo software and choose something with flexible starter-friendly pricing so you don’t shell out thousands when you only have a few dozen systems to manage at the beginning.



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