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Thread ID: 101106	2009-07-01 22:56:00	Question about Work	Cato (6936)	PC World Chat

Post ID	Timestamp	Content	User
788062	2009-07-01 22:56:00	I have pretty much been offered some work for a certain company. Networking, IT support. Now I got a few questions as I have never done anything like this before. So some questions might seem pretty stupid on my part. (And yes, I will go and see an accountant and maybe a lawyer, but I'd like to have an idea now) Say I were buying equpiment etc, would I source/buy everything myself and recharge the client or get them to buy directly? Saving myself the hassles of it all. Would it even be worth it? I would have to get liability insurance, no? (I can't think of more questions right now, but I will have alot more questions...) It looks to me that there might be good money to be made from this, and probably more work from the same company in the not too distant future. Any advice at all would be greatly appreciated. Cheers.	Cato (6936)
788063	2009-07-01 23:05:00	I have pretty much been offered some work for a certain company. Networking, IT support. Now I got a few questions as I have never done anything like this before. So some questions might seem pretty stupid on my part. (And yes, I will go and see an accountant and maybe a lawyer, but I'd like to have an idea now) Say I were buying equpiment etc, would I source/buy everything myself and recharge the client or get them to buy directly? Saving myself the hassles of it all. Would it even be worth it? I would have to get liability insurance, no? (I can't think of more questions right now, but I will have alot more questions...) It looks to me that there might be good money to be made from this, and probably more work from the same company in the not too distant future. Any advice at all would be greatly appreciated. Cheers. When you say "buying equipment", do you mean gear for your client? For example, network switches, cables etc? The benefit of you buying it, and then charging the client, is that you can put an appropriate markup on the items. If you get them to buy direct, then you don't make any money off that. Re: Insurance, it is useful in case you accidentally burn down their offices (for example), but you may find that the premiums are quite high and may not be worth it.	somebody (208)
788064	2009-07-01 23:05:00	If you can afford to bankroll the company then yes you buy the equipment and add at least 25% when you sell it to them. Otherwise just get them to buy the equipment if you don't want to make a profit on it.	Rob99 (151)
788065	2009-07-01 23:18:00	Re: Insurance, it is useful in case you accidentally burn down their offices (for example), but you may find that the premiums are quite high and may not be worth it. I don't plan on burning anything down, but I am more worried about some sort of failure that may arise after the system is up and running, shutting them down. Lost earnings, etc. They are planning to tear down everything they currently have, and do up something more "modern". Most of what they dates back to the last century. If you can afford to bankroll the company then yes you buy the equipment and add at least 25% when you sell it to them. Otherwise just get them to buy the equipment if you don't want to make a profit on it. That's the problem, I couldn't. I would have to go to the banks and see if they can give me a decent loan, which shouldn't be a problem. But I am not sure if it would be worth the interest payments etc, and the hassle that this would entail. 25% markup? Seems on the steep side. What is the norm? I was thinking closer to 5%. Thanks, guys.	Cato (6936)
788066	2009-07-01 23:25:00	That's the problem, I couldn't. I would have to go to the banks and see if they can give me a decent loan, which shouldn't be a problem. But I am not sure if it would be worth the interest payments etc, and the hassle that this would entail. 25% markup? Seems on the steep side. What is the norm? I was thinking closer to 5%. Thanks, guys. This is why you want 25% minimum. I charge at least 25%.	Rob99 (151)
788067	2009-07-01 23:56:00	A decent line of credit with a supplier or three (provided they would take you on as an acceptable risk) would preclude the need to approach the bank for a loan. But you would need to be sure that your invoices would be paid in full and promptly by your client. 5% mark up would not be worth your time or effort. 25% would be a minimum - many retail outlets have a 100% or more mark-up, but of course that includes associated costs of running a store and holding unsold stock (which may be funded by an overdraft)... And Rob is right - at least a 25% mark-up would cover (potentially) any bank overdraft incurred...	johcar (6283)
788068	2009-07-02 00:18:00	I don't plan on burning anything down No one does plan to burn or do any damage, but it still can happen - a Classic example was when I had out security system upgraded here - the guy putting it in, drilled right through the power cable to the Office - the lights and PC's stayed on, but the UPS's started going nuts - if it wasn't for them we never would have known right away. When we went up to check what he had drilled through - you could smell the start of burning. While you have to charge some markup on hardware - just be careful how much, it's very easy to check what other places are selling the same items for - dont get greedy. With vendors - don't always rely on one - I have several and sometimes one vendor can charge a LOT more than someone else for the exact same item. With Vendors, some may insist you have at first a cash account - you pay up front before they send the goods. Others will say you can have a 20th of the month, or 7 Day, but you have to purchase $$$ / Month. The list goes on ----- Edited: just regarding markups - you will make more $ in labor than hardware generally. Example - Say you purchase a Switch ASUS GX1108N ,for $85 add in the gst, + postage, + 25% ( BTW $85.00 IS the price from one of my vendors) $85.00 + gst =$95.62, + postage lets say $6.00 so far your cost = $101.62 + 25% = $127.02, you make a total of $25.40. BUT places like Ascent (www.ascent.co.nz) - sell the same product for $119.54. They would buy in bulk = Better discounts. Hope this explains what I mean by being careful about how much markup you put on.	wainuitech (129)
788069	2009-07-02 01:13:00	25% markup? Seems on the steep side . What is the norm? I was thinking closer to 5% . There's a very important difference here between markup and margin (or gross profit as it really is) . Markup is the factor you put on your cost price to get your selling price . Margin/Gross profit is the amount you actually get from the sale, from which you pay all your other costs;i . e Widget A: Cost price: $50 Sell price: $100 This is a 100% markup, but a 50% margin Widget B: Cost price: $75 Sell price: $112 . 50 This is a 50% markup, but a 33 . 33% margin . As WT said, you'll make more on labour than the gear you sell, but as a general rule, most business's require a Gross Profit of 33% to run successfully . Any less than that over your whole business, and you'll struggle to make a living out of it .	nofam (9009)
788070	2009-07-02 03:24:00	The other points that may be made regarding supplying hardware will be honouring warranties and making sure you have spares to handle any item(s) that clap out and thus getting the network back up and running in the shortest possible time especially if the network is critical. If you supply the hardware you don't want to RMA it back to your supplier only to be told yes you can have a replacement in ten working days for example.	Sweep (90)
788071	2009-07-02 06:09:00	I don't plan on burning anything down, but I am more worried about some sort of failure that may arise after the system is up and running, shutting them down . Lost earnings, etc . They are planning to tear down everything they currently have, and do up something more "modern" . Most of what they dates back to the last century . That's the problem, I couldn't . I would have to go to the banks and see if they can give me a decent loan, which shouldn't be a problem . But I am not sure if it would be worth the interest payments etc, and the hassle that this would entail . 25% markup? Seems on the steep side . What is the norm? I was thinking closer to 5% . Thanks, guys . I work for an AV install company and we mark up everything by 40% .	pine-o-cleen (2955)
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