IT Support Contract vs. Prepaid Time Blocks: Avoiding Dead-Ends

Many small business computer consultants don't fully understand the difference between an IT support contract and a prepaid time block. But which business model works better for the typical small business IT firm?

At the very least, you need to build your IT business around more than just one-shot deals. This means you need to clearly define your IT support contract package, so it delivers tremendous value and includes all of your sophisticated business solutions.

Consider the following three ways to differentiate between a prepaid time block and an IT support contract, so you can build better relationships with clients and a stronger, healthier, long-term business.

(1) A Prepaid Time Block is Very Different from an IT Support Contract. An IT support contract is specific about the types of proactive, on-going work you will do for your clients: for example on-going maintenance, emergency support, long-term planning, and upgrades. A prepaid time block is just time spent with your firm with no real on-going relationship once the time purchased runs out. For example, let's say that your normal hourly rate is $100 per hour. In return for prepaying 20 hours of time, you may offer a $10 per hour discount (effectively $90 per hour). But what happens when those 20 hours are used up? Once that happens, your client has effectively downgraded back to being an inactive customer... about the exact opposite of what you'd want to happen. A prepaid time block is not a long-term agreement, because there is no real long-term relationship or contract once the hours are used up.

(2) An IT Support Contract is an Agreement In Writing. When you create an air-tight IT support contract agreement, you promise your clients among other things a single point of contact, proper software licensing, and confidentiality that protects both you and the clients you serve. All of these factors will be included in a long-term agreement. In return for clients committing to a year’s worth of services, they get loads of benefits and discounts. As part of your account management plans, be sure to set up a renewal notice, to be sent out before the end of the year, that continues to sell the ongoing benefits of the program. With an IT support contract, you get the promise of cash flow on an ongoing, monthly basis for at least a year. You also get recurring revenue that will help build your IT business and give you more definite, long-term revenue, as compared to a more limiting dead-end transaction from a prepaid time block.

(3) Provide Valuable Service with Your IT Support Contract. Make sure you are always proactive with your IT support contract relationships. Stay in touch on a regular basis to make sure you are taking care of ongoing security and data protection, and continuing to solve clients' business problems. Make sure backup systems are running well and that you are documenting the small things happening within your clients’ offices. This way, you'll be prepared to provide the premium levels of service that your clients expect. An IT support contract works so well because it cannot ever be confused with a one-shot deal or a short-term project. Moreover, it represents a true agreement between you and your clients, and sets the stage for long-term, mutually-beneficial relationships.

In this article, we outlined 3 reasons why an IT support contract builds long-term relationships much better than a prepaid time block. Learn more about how you can attract great, steady, high-paying clients to your IT Support Contract program now at

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This story, "IT Support Contract vs. Prepaid Time Blocks: Avoiding Dead-Ends" was originally published by ITworld.

Copyright © 2009 IDG Communications, Inc.

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