$40k salary? What planet are you on? ;-)
It should be twice that at least!
Lee
-Original Message-
From: [EMAIL PROTECTED]
[mailto:[EMAIL PROTECTED] On Behalf Of Brian
Mays
Sent: 05 June 2006 14:43
To: Flashcoders mailing list
Subject: Re: [Flashcoders] Where to politely and appropriately
discusspricing issues
Following up on this a little late, here are some stats that I got from
"The
Savvy Designer's Guide to Success" by Jeff Fisher. The numbers can be
changed out, but I think the formulas and logic all sound good.
- You have about 2,080 work hours in a year (8 hours a day, 5 days a
week,
52 weeks a year)
- Set a target salary (example $40,000)
- Figure in other associated costs like taxes, FICA, insurance, etc. A
safe
figure is 25 to 30 percent ($12,000)
- Figure in holidays, sick days, legal holiday (example: 7 legal
holidays-56
hours; 2 weeks vacation-80 hours; 5 sick days-40 hours; total 176 hours)
- Subtract the 176 hours from the work hours (leaves 1904 hours)
- Figure time in for day to day office things like invoicing, sales
calls,
surfing the net, reading articles (example 25 percent - 476 hours).
Then
subtract that from your billable hours (leaves you with 1428 billable
hours
per year)
This brings the total cash flow needed to $52,000. You have 1,428
billable
hours to make this in. $52,000/1,428 = $36.41 per hour billable rate
I'll deviate a litte bit from the book at this point.
- Figure in cost of overhead - rent, utilities, phone, computers,
software,
etc. ($35,000 for example)
$35,000 + 52,000 = 87,000.
$87,000/1,428 = $60.92 per hour billable rate
- Figure in profit you would like to make, somewhere between 10 & 20
percent.
$60.92 + 10% = $67.01
So this particular example needs to bill hourly at about $67.
Hopefully that helps everyone.
Brian Mays
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