Leave It To The Experts

What To Pay?

The next part of the proposal should lay out the billing arrangement, and whether it's on an hourly or per project basis. The payment methods you specify should depend on the type and size of the job the ITC will be doing, says Chang. "If you're looking at a very small project, like troubleshooting, which should take no more than half an hour to an hour, you should pay at an hourly rate. If the consultant is any good, it should take no more than three hours to solve a problem, assuming you're a small business with less than five or 10 PCs. But if you want them to build an e-commerce site or a Web page, I would suggest asking for an overall proposal with a one-time project cost. That would be much more economical."

Ramon Ray warns entrepreneurs to use hourly rates very cautiously. "An hourly project should really be something you can quantify. If they're helping you enter 100 names into a database, you can kind of quantify that, but if you pay hourly for something like installing printers, watch out! If something happens, and the installation takes longer than it should, you're going to be shelling out a pile of money for something you should have paid a predetermined fee for. As an IT consultant myself, I shy away from charging at an hourly rate because I don't want clients thinking I'm scamming them."

As part of a project proposal, many consultants list the costs of the computer equipment necessary to implement a technology solution. In the past, these prices could be somewhat inflated by consultants in an effort to increase their profit margins. According to Chang, while this tendency hasn't completely disappeared, the pricing information widely available on the Internet has changed the market. Now business owners can compare prices and search for the best bargain on hardware, forcing consultants to focus more on providing value-added services like installation and customization.

"If you're knowledgeable about technology, you should use the Internet to check out the lowest prices for the hardware and software based on the specs given by the ITC," says Chang. "Or you can buy the hardware yourself and ask the ITC to do the value-added work. But if you don't want the hassle, or don't know tech, the best thing to do is get quotes from at least two different consultants and compare them."

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