Profit Margins when Offering IT Support to SME

[macally]

We have been asked to provide a local SME with an IT Support Agreement and we have already agreed on a monthly fee for the actual support but what I'm struggling with is whether or not to add a 'profit' on top of hardware/software prices and if so, how much is a reasonable percentage to add?

We have accounts with the large Computer Distributors but we always find that Overclockers beat these prices hands down.

 

[macally]

Thanks for all the input guys.

I definitely don't think it's a good idea to hide the profit in the cost of the service agreement because as covenantuk states, you will then seem expensive compared to others.

I've done a lot of thinking about this and at the end of the day, we provide a service under the service agreement and the client is happy to pay it, so why shouldn't we be paid for having to source the parts, deliver them to the client, and then have to resolve any issues should they arise?

I think I'm going to settle at a 15% profit margin on our cost price and see how that goes. We always look to find the most competitive prices anyway so even with 15% on top I'd say we'd be hard to beat by someone that doesn't really know what they're after.