Flaws in Business Plans of Remote IT Department?

Anonymous Tech Support asks: "I work for a small technical support company that is hired by local companies to manage networks, fix computers, and be the IT department in general. Last week I was working on a small network of 25+ computers. After a week of emotion and annoyances (long story), I have to ask the Slashdot community: How many of you are employees of small 'outsourced IT departments?' How much does your company charge per hour and how much do you make per hour? What sort of agreements do you have with your employer (non-compete etc.)?" The company charges $65 per hour to regular clients and I make very little of that. It seems like the business model is faulty, pushing us low-level yet skilled employees to start a company and go-it alone. It also seems like outsourced IT departments cannot have employees that will not leave or be disgruntled unless they are either a) paid enough or b) given a stake in the company. Do any of you have experience in this? What sort of business models exist out there for the remote IT department?"

Comments

I see a pretty obvious flaw.

[supabeast!]

Unless this company is in some Midwestern backwater where the cost of living is many times below the national average, trying to turn a profit doing IT support for $65 an hour is just nuts. I can't imagine how anyone could turn a profit at that rate, unless it involves paying employees peanuts and promising a chunk of the business that might turn into something valuable on the off-chance the company is bought out in some future IT boom.

Do yourself a favor and read some books about running a small business. Then start consulting on your own to clients with more money for at least $120 an hour.

charges

[josepha48]

typically a company bills 2 to 3 times more. So if you are making $50/hour, then the company would bill $150/hour. This is to cover overhead, ( assuming you are an employee ), of paying you benifits, workmans comp, and all the other expenses that go along with running a business and having employees.

Re:charges

[Orestesx]

Don't forget profit! the goal, from the POV of the business, is to maximize the difference between revenue (bills) and expenses (your wages). Duh!