How IT services firms make money

The older way is break-fix: the client calls when something breaks, and the IT firm bills the hours the fix takes. Simple, and fair for a client who rarely needs help. But the client can't budget, and the firm earns the most in the months its clients have the worst problems.

The other way is managed services: a fixed fee every month, usually per user or per device, for day-to-day help, updates, backups and watching the network. A firm that sells this is called a managed service provider, or MSP. Midway, a small city in Utah, asked for exactly this in 2025. Eleven firms bid between $2,100/month and $5,031/month, and many also asked a one-time onboarding fee of $2,402–$4,664 for the first weeks of work. The city's committee then recommended a firm at $2,718/month, plus $2,402 to start.

Fenwick Island, a small beach town in Delaware, pays its IT firm $1,423.65/month, Microsoft's office software licenses included, plus $238.32/month for extra security services. Many firms mix both ways: a monthly fee for the day-to-day, and hourly bills for projects and anything outside the agreement.

The agreement is the product. The draft one of Midway's bidders attached ran for 36 months and renewed by itself, with the price going up at least 5% a year. The client paid by bank transfer on the first day of each month, before the month's work. Help in working hours was unlimited for the users and devices on the agreement.

Just as important is what it left out: projects like new Wi-Fi, Windows upgrades, home computers, and cleaning up after a virus or ransomware. Those are billed on top. Where that line sits decides whether a monthly client makes the firm money, because every job inside the fee is free to the client and a cost to the firm.

That's also why the fee changes the firm's incentive. Paid by the hour, a bad month is a good month for the firm. Paid by the month, a bad month is the firm's cost, so a managed firm spends quiet hours on updates, monitoring and replacing old machines before they fail.

A big share goes to people. US computer systems design firms with employees paid 35.1% of their receipts in wages in 2022, by the Census's count. Firms that run clients' computer systems paid 42.3%, and other computer services firms 41.4%.

The people who answer the calls are computer support specialists. Counting user support and network support specialists together, their median pay was $62,890/year, or $30.24/hour, in May 2025, before payroll taxes and benefits; user support specialists alone earned $61,860/year. What can an hour be billed at? On federal contracts, the middle ceiling rate firms may charge for an hour of help desk work is about $80/hour: a cap for government buyers, not a small office's price.

Software is the other big cost. Many IT firms resell licenses inside their fee: Microsoft lists its business plans for office software and email at $7/month, $14/month and $22/month per user, from July 2026. Add the firm's own tools for watching and updating every computer, insurance, and a car for visits.

Many IT businesses are one person. In 2023 the Census counted 343,329 businesses in computer services with no employees, in a group that also counts freelance programmers and designers. They took in $59,971 on average, but most were small: 57.8% took in less than twenty-five thousand dollars, while 15.5% took in a hundred thousand or more.

Firms with staff are a smaller group: in the same Census group, 125,645 firms had paid employees in 2022. They employ many of the country's support specialists: 21% of computer user support specialists' jobs are in computer systems design and related services, the biggest employer.

Starting one takes little equipment and a lot of trust: a client hands you the keys to every computer it has. The first weeks with each new client go to learning and cleaning up its setup, which is what onboarding fees pay for, and the monthly fee only starts once that's done. The free lesson lets you plan your own first year: how much of your income is steady, and when your contracts cover your costs, your own pay included.