[consulting] Costs of forking

John Sechrest sechrest at jas.peak.org
Wed Feb 22 23:21:17 UTC 2006

"Darrel O'Pry" <dopry at thing.net> writes:

 % On Fri, 2006-02-10 at 07:22 -0800, Jason Flatt wrote:
 % > Do you people factor these sorts of things into your charges, and how so?  Is 
 % > it a flat +x%, or a flat +$y, or is there some sort of calculation made based 
 % > on the project, i.e.: "I think I'll spend .5 hr filling out tax paperwork, so 
 % > I'll add $z..."?  I would think just adding a flat, say 5%, to whatever was 
 % > decided was the price to charge would be the best, least thought processing 
 % > way to go.

 % When I did sales for manufacturing I had to figure in an overhead % into
 % the labor costs... 

 % hours * wage * (1+operational overhead)...

 % The operational overhead was something like overhead costs / labor
 % costs, for a given period.

 This is a typical solution for many companies. There are overhead
 rates that vary a good deal between companies. But these include
 book keeping, upkeep, professional societies, conferences, independent 
 research and other things that you need to do as a company, but which
 your clients don't normally pay for explicitly.

 Many people pick a "hourly rate" which they think of as a "wage"
 but which is really "wage * (1 + overhead rate)"

 As a company , it is well worth understanding what your overhead rate is
 and what you need to do to manage it. 

John Sechrest          .         Helping people use
                        .           computers and the Internet
                          .            more effectively
                                 .       Internet: sechrest at peak.org
                                              . http://www.peak.org/~sechrest

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