Prepaid blocks of time when it comes to IT services are very different from standard support contracts.  IT services as part of support contracts are specific to the types of work you will do whereas the prepaid block of time is just time.  The customer knows your normal rate is $100 per hour and that in return for pre-paying for 20 hours they will get a $10 per hour discount.

Get It in Writing

You need to establish an IT services agreement about having a single point of contact, software licensing and confidentiality clauses.  But you need to explain what you normally charge and in return, the customer will be pre-paying a set number of hours that will give them a discount.  Then you can set up your accounting and generate a renewal notice when time is almost used.

The big advantage is that you get cash up-front that can help with your profits and you will not worry about getting stuck.  The disadvantage is that you don’t get the same level of recurring revenue as you get with support contracts.  This is because you are selling a fixed-price service that has a definite beginning and end.  

Valuable IT Services

You need to be sure you set up fixed-price clients on a proactive plan.  This means you need to be in touch with them regularly and take care of their security needs on an on-going basis.  You have to be sure that your backup is running right and that things are being documented and set up so you can fix them in order of priority.

The pre-paid block of time should not allow you to get into a situation where you are doing one-shot deals.  Make sure you are setting up IT services for long-term relationships.

Blogged By: Computer Consulting Kit