[Gllug] starting in IT

[James Courtier-Dutton]

2010/1/6 JLMS <jjllmmss at googlemail.com>:
>
>
> On Wed, Jan 6, 2010 at 2:08 PM, Martin <mherda at gmail.com> wrote:
>>
>> Hi,
>>
>> I've got a job unrelated to IT. I'm starting a freelance job helping
>> somebody with IT in his newly opened office in London. I'll set up the
>> computers/network in the office. Configure Ubuntu, etc. and troubleshoot
>> any problems when needed. It means that it's not going to be a very
>> time-consuming. The office is small. There are only 2 computers. We
>> don't run any server - for the time being the website is hosted by a
>> third party. I also administer the website.
>>
>> Now my question is as to what I should do in terms of my legal status.
>> Shall I become self-employed or what's the best option in such a
>> situation?
>>
>> As I have never worked in IT, I don't know how to charge for my services.
>>
>> - how to charge for the website (there won't be many changes per month)
>> - how to charge for my support in the office. Initially I'll probably
>> spend a few days to make sure everything is working, but then I might
>> not be needed for a month.
>>
>> I'd appreciate any words of wisdom
>>
>
> You can start as a sole trader. You only need to inform the Inland Revenue
> and keep basic accounting (if you are employed elsewhere you may still want
> to hire an accountant).
>
> Since nobody is actually employing you, being an employee seems to be out of
> the question, and starting a limited company would clearly be overkill (this
> is what most IT contractors do, but this should be done only once this is
> your main source of income and work since it is not cheap).
>
> As for charging
>
> -  Website: Charge a one off for setting it up (look around for how much
> other people are charging and find more less a fair price).
>
> - You have to find out how much your time is worth. A rough example: junior
> permanent positions in IT fetch anything between £15000 to £25000, lets take
> the happy middle: £20000. Divide that by 52 weeks per year, then by 5 days
> per week and finally by 8 hours per day. That gives you a basic hourly rate
> (in our example: £9.61 hour). Now multiply that by 2. Why? Because people
> working on their own have many overheads that an employed person does not
> have and work is not regular.
>
> So I would say £20/hour for somebody starting on the field would be a fair
> rate.
>
> Other may chip in with different ways to calculate this, it really does not
> matter how you do it, the important thing is to have an objective  reference
> against which you can decide if it is worth your while to be doing this kind
> of work.
>
> I can't recommend highly enough the Business Link website (
> http://www.businesslink.gov.uk ) they have lots of advice pertaining to this
> and free seminars, anybody trying to start a business (which is basically
> what you would be trying to do) should have a look there.
>

You would need "Professional indemnity insurance"
What you will be covered for:
PI insurance protects your business against claims for loss or damage
by a client or a third party if you have made mistakes or are found to
have been negligent in some or all of the services that you provide
for them. PI insurance will also cover legal costs.

For example, you are fixing PC A, and totally unrelated, PC B across
the room crashes and the customer looses important emails, data etc.
They will probably sue you just because you were in the room at the
time. PI insurance will cover the legal costs that would result, even
if it is not your fault.

Regarding the costing. It depends on the location. Find out what cost
it would be for the company if you were not there, and just under cut
them slightly.
I think £20 is rather low, because after taxes, pension etc. that
turns out to only be about £10.

You can either charge by the hour and add call out charges much like a
plumber, or charge on a daily basis, and do not offer half days etc.
As quite a few problems could be fixed remotely now days, you might
wish to charge a "maintenance" support charge. This would be a monthly
charge irrespective of whether something goes wrong or not. Businesses
like predictable costs rather than unexpected big chunks when
something goes wrong.
The "maintenance" method also has many advantages, because you then
get to charge extra when the customer asks you to "change" something.
When you "change" something, this is a new feature and therefore
possibly a increase in the monthly "maintenance" cost.

Another term used is "managed service". Here you manage their systems
and web site and fix problems even before the customer notices.
The way the "managed service" is measured is by SLAs (Service Level
agreements). So, the customer pays for a certain amount of
availabiltiy or uptime and if you meet that, you get paid, if you miss
them, the customer gets "service credits" that result in you being
paid less than normal.

Kind Regards

James
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