Service contract with monthly fee and extra hours
Let's say I provide services for my clients (consulting/programming/training, etc.) but the services are provided on demand at the clients' request.
I want to charge a fixed monthly fee to cover my fixed expenses.
I can't charge a lot because the clients are not sure how many of my hours are going to need every month, so they may feel they are overpaying.
I can't charge only per-event hours, because I need a minimum income to cover the fixed office expenses. Call it the cost of "being available"
What I would like to do is to charge each client a minimum monthly fee, probably including some “free” hours, but if a month I work many hours for a client, I should be able to invoice him or her extra hours in addition to the monthly fee.
- Is this arrangement common?
- How is it called?
- Is there a sample agreement text available online?
Thanks
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No, it's not common. The best way is to do hours times hourly rate. If you want to charge static fee, it's rather for "security" and not "consultancy". – Andrew Smith 12 years ago
1 Answer
This arrangement is common in some industries where continuity is essential. For example, law firms will charge a "retainer" fee and then bill by the hour.
It's unusual in low level consulting. I suspect you're going to have a tough time convincing clients to accept this model, unless they are certain to use their minimum hours per month.
From the perspective of your clients, it's your job to ensure that you have enough work to operate your business and not up to them to subsidise that.
