How much do I charge my friend/small business for my IT services?

[tmetro-blu-5a1Jt6qxUNc at public.gmane.org (Tom Metro)]

Christopher Rutter wrote:
> I am a partner in a small business...and I have a 30% interest in the
> company...ever since the business started I've been handling the IT
> dept...has now grown to a part time/full time gig for me...
> ...
> Now that the business has grown enough it is time for me to
> start charging for my services.

Is that 30% interest something that currently benefits you (i.e. in the 
form of profit sharing) or is likely to benefit you in the future? 
(Practically speaking, an ownership stake in a small business often 
doesn't translate into anything tangible, except in a few circumstances, 
like the business being sold at favorable terms.)

If it is, then the first thing you should consider is whether 1. you 
want this gig as a source of employment, and 2. whether you can hire 
someone else to do the work more cost effectively than yourself, freeing 
yourself up to do something else that you can make more money at. #2 may 
be irrelevant, if the characteristics of this job are something you 
really like. That is, after all, one of the benefits to having an 
ownership stake in a business.


> My business partner agrees that I should be compensated for my time,
> but I don't know what is fair compensation, and it is tough to come
> up with a figure when my friendship with my business partner is
> involved...

Your best remedy is to do some research and share that research with 
your business partner.


> ...so I am looking to this community to get some unbiased feedback on
> what I should be charging?

No one here can answer that question for you, as they can only provide 
single points of data, and what you really need is to arrive at an 
average, that's been adjusted for the type of work and the region. Sites 
like salary.com specialize in providing this kind of data. Other similar 
sites:

http://mcpmag.com/salarysurveys/
http://www.datamasters.com/
http://www.realrates.com/
http://jobstar.org/tools/salary/sal-prof.php

Supplement that with some of your own original research using job sites 
like:
http://www.indeed.com/
http://www.simplyhired.com/

because salary surveys are always reporting old data (typically a year 
or more old).

Once you've established a good baseline price range that you feel is 
well supported by the data, then start adjusting for the specific job 
characteristics, like hours per week, on-call coverage, benefits (or 
lack thereof), etc.

At this point, if the number seems high, you might want to double back 
to that question of whether it makes more sense for the business to hire 
someone local, or to split the position and give the day-to-day 
administration tasks to someone less experienced, and cheaper, while 
hiring you as a contractor to implement the new initiatives you listed.

  -Tom

-- 
Tom Metro
Venture Logic, Newton, MA, USA
"Enterprise solutions through open source."
Professional Profile: http://tmetro.venturelogic.com/