Take the 2-minute tour ×
Server Fault is a question and answer site for professional system and network administrators. It's 100% free, no registration required.

Do any of you out there do contract sys admin work where you are contracted to do network administration for small businesses who do not have a full time IT person? If so - how do you charge for that and what is the going rate?

share|improve this question

closed as too localized by Mark Henderson Jan 13 '12 at 4:45

This question is unlikely to help any future visitors; it is only relevant to a small geographic area, a specific moment in time, or an extraordinarily narrow situation that is not generally applicable to the worldwide audience of the internet. For help making this question more broadly applicable, visit the help center.If this question can be reworded to fit the rules in the help center, please edit the question.

1  
I'm not trying to push away any new answers ... this isn't exactly the same question: serverfault.com/questions/25320/… but it should help you. Good luck! –  Joseph Kern Jun 18 '09 at 13:59

6 Answers 6

up vote 6 down vote accepted

I've done some contract sysadmin work for a few small businesses in the past. There are a couple of ways to go. Charge per job, and charge per hour. I lean towards the charge per hour, typically to avoid scope creep. (eg. the business adding more items to the todo list into the same "job") This can be avoided with a good Statement of Work defined up front.

For the hourly rate: The rate you charge is really a combination of a few things; location, the business itself, scope of work and experience.

Location and Type of Business - Obviously you can get a higher rate in NYC than in the middle of Vermont. Same goes for the type of business. Some smaller businesses just aren't able to pay more.

Scope of Work - I generally charge less for a business that wants me to come in every few weeks/months for routine maintenance. The business that wants a "fix everything one time" solution will get charged a bit more. Higher complexity jobs command a higher hourly rate.

Experience - If you would like to take only the more interesting, higher complexity jobs, I'd recommend setting a fairly high minimum rate. This will eliminate the businesses looking to lowball you, and also the "Can you install my printer?"-type jobs.

My recommendation if you decide to choose the hourly rate path - always charge more than you initially think. If you think $60/hour is a fair rate, charge $100/hour. It's always easy to negotiate down if you need to, much harder to negotiate up.

share|improve this answer
1  
+1 for avoiding "scope creep" by documenting the scope of work up front with a Statement of Work document. If I could give you +2, I would. –  Evan Anderson Jun 18 '09 at 14:38
    
+1 here too Evan –  MathewC Jun 18 '09 at 14:53
1  
"If you think $60/hour is a fair rate, charge $100/hour" -- I think this is realistic but I also think there should be a rationale; i.e., I'm charging $100/hr because I know that realistically only 60% of the hours I work will be billable. Also how do you decide that $X/hr is "fair"? Seems to me that "fair" is "what I need to meet my reasonable personal expenses and my reasonable business expenses -- including savings against the possibility of a drop in business -- and make a reasonable profit" –  Ben Dunlap Jun 18 '09 at 16:00
    
This is excellenet information and while this question does not neccessarily have one correct answer I will award this one as accepted. The case is actually a little different here. I am not looking to start a business. Rather I do SysAdmin for a company and have a second company which develops software. Those roles may flip and the latter could become the real job and we would contract the sysAdmin with my current employer. So if that happens I want to know the numbers we should be bargaining with going in. Thanks for all the great info everybody! –  AudioDan Jun 19 '09 at 20:53

Personally I shy away from this work, or I work in trade.

Going rate in the data centers I've worked in is $80-$150 an hour depending on the kind of work or the contract (buy more hours up front etc.)

I would start at $100 and negotiate if needed for freelance.

share|improve this answer
1  
I'll work in trade ... I'll give you my time, you give me your money. (Or I work for free.) –  Joseph Kern Jun 18 '09 at 14:09
    
I'm a tech, not a salesman. I like to sleep at night ;-) –  MathewC Jun 18 '09 at 14:53
    
Heh heh... There's nothing morally wrong with working for money, so long as you are providing value to the Customer commensurate to what you're charging, to me. (Now, OTOH, inexperienced people "duping" Customers into paying for things they don't need-- that's a whole different story.) –  Evan Anderson Jun 18 '09 at 15:09

There are a few options that I've employed:

  • Straight hourly charge (I often use this for the more infrequent customers)
  • By project. This requires an estimate of work and a quote to the customer
  • Work bundles (5 hrs for $X.XX, 10 hrs for $X.XX, I often use this for more steady, but not all-out regular)
  • Retainer. $X.XX/week/month/whatever paid up front then $X.XX/hour/day of work over the base time paid either as you work or upon a set interval of time

I think your going rate is going to be a bit market dependent. For hourly charges I've seen it anywhere from $60-$250/hour around here (Detroit, MI metro area) based on type of work and experience level of the contractor / consultant.

EDIT: I'll go along with MathewC's starting point of $100/hour.

share|improve this answer

You should ask yourself, "What I am worth?" and "What will the (local) market bear?"

Maybe call around to other freelance SA in your area and ask for estimates.

Hi! My computer's broken, how much would you charge per-hour to come and take a look? I don't know anything about computers ...

Also take a look at the price lists for

No matter what you think of these two companies, they have put a lot of work into their marketing and pricing systems.

share|improve this answer
1  
I don't think the question "What am I worth?" makes a lot of sense. How do you reach a meaningful answer to that question. My boss, who has run the gamut -- everything from (a) working on a wage basis for a big 6 accounting firm that was billing him out at a huge multiple of what they were paying him, to (z) C-level management with an equity-stake in a startup -- says "no one makes what they're worth"... –  Ben Dunlap Jun 18 '09 at 15:54
1  
I think the more useful question is "What do I need to earn?" This has to take into account one's personal financial needs, as well as the additional tax burden of self-employment, overhead costs including the non-billable-hours you'll spend running your business, etc. –  Ben Dunlap Jun 18 '09 at 15:55
    
Ben, I now completely concur with your comment. –  Joseph Kern Oct 22 '11 at 20:50

Yep-- this is exactly what my business does, and is how I make my living.

I won't talk about our rates here, but I would advise you to always have a contract in writing before you do any work. Even if the contract just says "to work on the following specific items..." for incidental work, you need a written agreement that explains the arrangements clearly for all parties involved.

I'll throw my support behind the "start at $100.00 / hr" crowd, too. Your rate is dictated by the type of work, your experience and qualifications, and the duration / quantity of time involved. I've dropped my per-hour rate significantly for one Customer, for example, who wanted our people on-site 8 x 5 Monday - Friday with emergency after-hours support for a committed 3 month contract. OTOH, the rate gets significantly higher if you want me to drop everything and respond to an unscheduled emergency.

Here are some "business things" that have worked for us (our business turns 5 y/o on June 30):

  • We have always done hourly billing (and absolutely do NOT resell hardware or other goods). I wouldn't sign-up for a contract that didn't have a specified hourly rate, as a Customer of another industry (lawyer, accountant, etc), so I wouldn't ask my Customers to do the same. We don't bill for work we don't do (i.e. "flat monthly rates"). If we're not working, we're not billing. Perhaps we make less money than other companies, but I go to sleep at night with a clear conscience.

  • We don't "lock in" our Customers in long term contracts. We have enough confidence in our ability and value that we believe our Customers will stay with us because we're better than the alternatives, not because we have them "locked in". I wouldn't sign a "lock in" contract with another professional, so I won't ask my Customers to do the same.

  • We have no employees. Everyone in the company is an owner and a partner, and has "skin in the game". When I worked for another company as an employee I found that other employees often didn't have the commitment that I did. As an owner of a company now, I recognize that using employees or subcontractors could make me more money, but it could also bankrupt me if my employees create enough problem situations for me (and lose my Customers).

  • We decided on "services only" because I've seen too many situations, working for other companies who were "resellers", where Customers go long past-due on invoices, effectively using your company as a lending institution. As a small business, I dare you to try and charge your Customers finance charges. It doesn't work. Instead, your cash flow goes to hell and you end up out of business. We don't have that problem with "services only".

share|improve this answer
    
I'm curious, how do you have your customers buy hardware? For me I setup accounts with the vendors I wanted to deal with and they bill the customer directly once the customer approves. –  SpaceManSpiff Jun 18 '09 at 16:48
1  
@LEAT: Right there with you. We make recommendations on hardware, software, etc, but the Customer ultimately makes the purchase. We have sales contacts at some vendors who we can work with to get decent deals for our Customers, but ultimately that relationship (and payment) is between the Customer and the hardware vendor. –  Evan Anderson Jun 18 '09 at 16:59

First of all: $100/hour is a good starting point.

Second of all: It would benefit all SysAdmins if we all used that $100/hour figure wherever possible.

Within your company, use it as a ballpark that you'd have to pay if you need help with a specific project or a generally high workload. If you hire an experienced SysAdmin on a contract basis, don't try to lowball, pay at least $100/hour. Pay more if you find someone good. 5 years ago we were paying a guy $100 who was experienced and easy to work with, today I'd expect to pay him more. When someone with a business who's looking for help asks me what they should pay, I say "at least $100/hour for someone with good experience, more if you want someone like me." It's not bragging, it's realistic.

share|improve this answer

Not the answer you're looking for? Browse other questions tagged or ask your own question.